Serabi Gold Share Discussion Threads

[borisjohnsonshair] 12/10/2021 11:29

HUM looks good but a it'll take a long time to clear the debt. In two years we will be similar producers but they'll have GBP120M debt, we will have zero. Maybe we will have made a massive discovery as well. I thought we were getting monthly updates.

[ppvn] 12/10/2021 11:10

The lunacy of the markets continues. Slight o/t but must say that my investment rationale here has been reaffirmed this morning with the recent funding news from HUM - and this is the reason I'd like to hear the medium term strategy here re. dividend policy. Like other holders here (I suspect) it is not so much for the div itself- rather the policy that I'd be more interested in.

So HUM have secured a $100mm finance package at 8.5% interest to build out a mine with first gold due q2 2023. The point I try to make is that Serabi should have Coringa online a year or so before HUM, they will be producing a similar amount of gold but with no financing to repay - so the BOD should be imo making this differentiator that the market should be clamouring for. Whilst good news for HUM it's a lot of debt to repay for an increase of 100k oz yet the shares jump significantly.

Anyway enjoyed your rant yesterday Kenny - with the facts of the matter infront of me like this it's hard to disagree!!

[kennyp52] 11/10/2021 08:30

Cheers Tightfist .. my rants are better than my investment strategy atm 🤣

Production surely has to be the priority ? High POG , the cashflow will help enormously with exploration and mine advancement . It drags down AISC . It really isn’t rocket science and they have been touting that ore sorting since early 2020 .

[tightfist] 11/10/2021 08:25

Hi Kenny, a quality Rant! The Ore Sorter should come into its own when RoM ore flow exceeds mill capacity - hopefully we will get that insight into Q3 Palito performance within the next fortnight..2021 has been nicely trending so far: Q1: 8,087Oz, Q2: 9,274Oz let's have more of the same progression - agreed, it would be reassuring to see a 10,000 0z quarter this year..Cheers, tightfist

[cotton4] 09/10/2021 12:48

Hi Tighfist

Earnings per share for the 1st months was ~6.5p, equating to 13p for the year or a PE of 5. This is extremely low for a company with SRB's potential. If they are to reach 45k ozs next year we should be hitting the 10oz+ over the next 2 qtrs.

[imastu pidgitaswell] 08/10/2021 12:30

They're not going to pay a special dividend having raised money by issuing shares (at 75p) earlier this year. One of the few certainties with this share...

[tightfist] 08/10/2021 12:27

Personally I don't want/need dividends either. However, I am very aware that some PI's won't consider a share with zero yield - and for others it's a basic qualifier. To accelerate share price growth SRB needs to widen its appeal - I still foresee 90% of Total Return being derived from capital appreciation..Given the cash being generated, it's actually not a Big-Ask - maybe a Special Divdend if volatile PoG is a concern?

[kennyp52] 08/10/2021 09:29

I don’t want dividends .. I want production ; tighter financial systems and hard work from the board . If Carlsberg did mines …

[tightfist] 06/10/2021 16:27

It all depends on what margin-of-safety (cash) they deem appropriate - IMO if they run it too close and then suffer a glitch (PoG, production, cash cost) then the share price may tank and the vultures circle overhead. It also depends on their concurrent ongoing exploration budget.....

[borisjohnsonshair] 06/10/2021 16:12

I totally agree which is why I have expected this suggested. The costs will occur for 18 months, so why is debt needed

[ppvn] 06/10/2021 15:21

Hi tightfist,

You raise very valid points and yes, because of the small amount of shares o/s a token dividend would imv be very good for attracting new investors. Many are precluded from holding non paying names but with that in mind I also would like them to put more effort into their ESG credentials - no point making themselves more investable if the rising importance of ESG is overlooked.

I don't personally think any sort of dividend in the near term is likely - but with Coringa slated to cost c.$20mm in terms of development and the gold price remaining robust it is possible that they could either build at little or no debt if they continue throwing money off as they currently are.

I personally am not really a fan of buybacks since that generally means they haven't got any other ideas for their capital. But a div serves a purpose namely providing a return for investors as well as attracting new ones.

Bojo - it's all gone a bit quiet on the funding of Coringa side. I'm not sure where we currently stand on that since they have said recently that cash balances are much higher than they'd anticipated and you can see we have little shortfall between the cash balance and development costs to be incurred. They had mentioned debt for Coringa but that was quite some time ago. We should also be making c. $1mm / month from existing production so it's not beyond the realm of possibility imo.

[tightfist] 06/10/2021 14:11

Hi PPVN,Agreed. Roughly speaking, and even before Coringa commissioning, a dividend policy of a modest 10% FCF distribution this year would deliver approx 2.5% yield (at current sp) and deliver a strong message to the market. The corresponding increase in Coringa development debt would be negligible. .Unfortunately I don't foresee a share buy-back scenario. There has already been enough angst about illiquidity, so I don't foresee any action with PI's that would exacerbate it; the ii's are likely in for the long haul?.Cheers, tightfist

[borisjohnsonshair] 06/10/2021 13:14

Soon time for today's 30,000 buy. Someone with plenty of coin can see the bright & clear future, bright & clear

[ppvn] 06/10/2021 10:04

Agree tightfist. And that's exactly why it would be great to hear the more medium term aims of the company - I.e. are they planning to return excess cash generated by Coringa to shareholders via dividends etc.

[tightfist] 06/10/2021 10:01

Hi Kenny, it would be a steal! However, a couple of thoughts. Control is effectively in the hands of (A)Fratelli and (B)Greenstone; if an elevated bid was to meet their requirements the other recent ii's would be in clover. In my view it's Fratelli who would be toughest to get on-board; their average cost must be a lot lot higher than today's sp, plus a notional RoI. They seem to be ultra-long term family players who are in no hurry..The acquisitor? Is there a liquid market for specialist (remember pre-SRB history) narrow-vein mining companies - I doubt it, but would be delighted to be proven wrong. If we had an Open Pit operation it would be a different situation, especially as a carve-out - which is why as an LTH I am keen to see Sao Domingos, etc pursued..Cheers, tightfist

[kennyp52] 06/10/2021 09:31

Tightfist .. here is a thought . Why would you use £50m on exploration , plant and years of share placings before you start to bring a gold mine into profitable production .. when you can just buy SRB ? MCAP only £50m is a steal with it being debt free .

[ppvn] 06/10/2021 08:59

I agree tightfist. We've discussed this many times before but particuarly after this most recent accounting issue it seems more important than ever to put their money where their mouths are.

There is obviously a lack of trust in this company for the moment which is very unfortunate imo. Buying shares on market would be a good first step to restoring some confidence - whilst I don't expect that it would erase all the missteps immediately it would be a good start.

[tightfist] 06/10/2021 08:31

Yes, that clock stops ticking later this month. After what we have been taken through, it certainly would demonstrate commitment to put some of their own money/skin to work.

[imastu pidgitaswell] 06/10/2021 08:03

Possibly, fair point - I always thought it was financial numbers though.

I'll be kind and assume it is a closed period...

[tightfist] 06/10/2021 07:57

Do the pending Q3 production figures constitute a "Closed Period"?

[imastu pidgitaswell] 06/10/2021 07:24

Not exactly wading in with both feet in terms of buying shares and showing a commitment to the business they have 'directed' - and taken a lot of money out of - for many years, are they?