Serabi Gold Share Discussion Threads

[tightfist] 04/1/2016 20:44

Here is new brr Media interview with Clive Line, talking about the new Fratelli Loan facility, and the ongoing short-term Sprott facility too; overall, he does sound quite cautious about the SRB cash situation. The very brief foretaste of the Q4 figures at the end sounds reasonably encouraging for the latter part of the quarter..

hxxp://brrmedia.co.uk/event/141139

There have been no comments here about the conversion premium of 30% from the current 2.75p to 3.6p within the Fratelli loan arrangement.


Cheers, tightfist

[rajaster] 31/12/2015 09:47

Full RNS:

For immediate release
31 December 2015
Serabi Gold Plc
("Serabi" or the "Company")
US$5 million convertible loan facility
Serabi Gold plc (AIM:SRB, TSX:SBI), the Brazilian focused gold mining and development company, announces that Fratelli Investments Limited ("Fratelli Investments"), the Company's major shareholder, has agreed to provide an interim unsecured short term working capital convertible loan facility of US$5 million (equivalent to approximately UK£3.3 million) (the "Loan") to the Company to provide additional working capital facilities.
Mike Hodgson, CEO said:
"Serabi is a high grade gold producer, targeting to achieve lower than average All-in Sustaining Costs per ounce, and this is critical, faced as we are, with the recent weakness in the gold price. As with all gold producers, we are facing strong economic headwinds, all at a time whilst the Company has continuing commitments for increasing throughput through the process plant as well as development expenditure to bring the Sao Chico Mine into full production. This has restricted the Company's ability to build up its cash reserves. To ensure we can remain on track with our expansion and development plans, this convertible loan facility, kindly provided to us by our major shareholder gives the Company the ability to complete its current development programmes by the early part of the second quarter of 2016 and thus achieve optimal gold production rates as quickly as possible. We do not anticipate that it will be necessary to draw down the full extent of the convertible loan facility".
The Loan is for a period expiring on 31 January 2017 and for a maximum of US$5 million. The facility may be drawn-down in up to three separate instalments of an initial US$2 million and two further installments of US$1.5 million each. The Loan is available to be used at any time up to 30 June 2016. Interest is chargeable at the rate of 12% per annum. There is no prepayment penalty or arrangement fee. The Loan is unsecured and subordinated to the Company's existing loan facilities, including the secured loan facility arrangement provided by the Sprott Resource Lending Partnership (the outstanding balance of which amounted to US$4 million as at 22 December 2015).
The first US$2 million of the Loan is convertible at the election of Fratelli Investments into new Serabi Ordinary Shares at an exercise price of 3.6 pence per new Serabi Ordinary Share at any time. The remaining amount of the Loan, if drawdown, may be repaid by the Company at its option at any time on or before 30 June 2016. Thereafter, Fratelli Investments will have the right to convert all or part of the remaining amount of the Loan into new Serabi Ordinary Shares at an exercise price of 3.6 pence per new Serabi Ordinary Share at any time. Based on an exchange rate of £1:US$1.50 up to 92,592,593 new Serabi Ordinary Shares may be issued on conversion of the Loan by Fratelli Investments.
Fratelli Investments is currently interested in 343,613,166 Serabi Ordinary Shares representing 52.35 per cent. of Serabi's current issued share capital and accordingly, Fratelli Investments is able to increase its aggregate shareholding in the Company without incurring any obligation under Rule 9 to make a general offer to the Company's other Shareholders.

[rajaster] 31/12/2015 09:45

There is no prepayment penalty or arrangement fee. The Loan is unsecured and subordinated to the Company's existing loan facilities, including the secured loan facility arrangement provided by the Sprott Resource Lending Partnership (the outstanding balance of which amounted to US$4 million as at 22 December 2015).

[snape] 31/12/2015 09:07

Raj
Where does it say Sprott loan down to 4m?

[rajaster] 31/12/2015 09:02

that was an excellent rns.. interests abit steep but getting funding is very difficult these days.. avoiding the likes of yorkville etc.
sprott loan down to $4 million to which is great.

[sleveen] 31/12/2015 08:20

Nailed it, there's the further funding needed.

[rajaster] 23/12/2015 11:17

The share price is looking very very weak now. usually when supports broken its not long before you see new lows, perpendicular support trend line. just bs as i've seen this coming for a while.. just inaction as the underlying business fundamentals have been much better than most other AIM miners. As they say trend is your friend. no santa rallys yet.. unless you see the short squeezes or pump and dump as rallys.

[tightfist] 23/12/2015 09:59

Boffster,

I guess the large fall last Friday was Stops getting taken out? Possibly delayed reaction to FY guidance being reduced from 35,000 to 33,000 Oz, which implies Q4 production will be slightly down on Q3.

In the 13th November report Hodgson said "In addition to funding the upgrade programme, operational cash flow is being used to pay down the short term debt facility with Sprott. With the timing of the debt retirement and the increase in production capacity expected early in the second quarter of 2016......" so he appears confident that timing with Sprott is not an issue. If there were short term difficulties I expect he could call on Fratelli, rather than pursue a dilutive placing.

Allowing for a Q4 wobble, operating free cash flow from Palito of maybe ~$4.5pa (shortly to be augmented by Sao Chico commercial production and the 3rd Ball Mill) is IMHO not to be sniffed at from a company with a Mkt Cap of $27m.

Cheers, tightfist

[boffster] 22/12/2015 01:15

Possible I suppose but I doubt it. I don't think repaying the sprott loan will be an issue. This was supposed to be paid back with additional revenue arising from stockpiled ore. I wouldn't foresee a problem with getting an extension if one were necessary. SRB seems to have some quality assets.

[bsg] 21/12/2015 15:45

Or ... a placing on the way?

[boffster] 21/12/2015 15:19

It doesn't make sense. Serabi seems well managed and consistently meets or exceeds expectations. General bad sentiment in the sector?

[rajaster] 21/12/2015 14:46

ffs.. more drip.. more than 50% down now. just another goldie thats down.

[sleveen] 18/12/2015 15:28

Placing leaked ?

[rajaster] 13/11/2015 16:46

kiwi,golds more likely to $900 than the other way as things look

[kiwimonk] 13/11/2015 12:40

with SRB being so adept at paying off the loan, i'm sure SPROTT would listen to an extension on slightly higher terms for re-payment. everyone gets a good deal then.
ideally Gold $2000 then everyones laughing....patience!

[tightfist] 13/11/2015 12:17

Today's Hodgson interview, SC features after 3 mins:

[sleveen] 13/11/2015 08:24

Loganair

The debt is being repaid at $1m per qtr, the $13.6m is required to be repaid in the next 12 months (hence the loan's listed within current liabilities)

Investment in SC development will absorb much of the cash generated. There would need to be a huge rise in production to generate enough cash to repay $13.6m within the next 12 mnths.

Hence my loan restructure or placing comment.

GLA.

[giant steps] 13/11/2015 08:14

It's all too easy to replace debt with equity
so one fears a heavily discounted placing in
the coming months. High grade operations may
be a surviving factor in this depressed sector.

Reminder

13 NOV 2015

[loganair] 13/11/2015 08:10

sleveen - "In addition to funding the upgrade programme, operational cash flow is being used to pay down the short term debt facility with Sprott. With the timing of the debt retirement and the increase in production capacity expected early in the second quarter of 2016, I anticipate that the Group will be generating a strong cash-flow for pursuing its organic growth opportunities thereafter.

[sleveen] 13/11/2015 08:04

Decent operational result.

My one worry is the current liability of $13.6m. How is that loan going to be repaid?

Either a loan restructuring (probably the preferred option) or a placing in my view

[rajaster] 03/11/2015 08:39

unfortunately for us, there doesn't appear to be that much strength in the share price right now., still waiting for the financial figures.

[kinloch] 02/11/2015 11:54

The sooner he gets it installed the better the picture becomes as with most companies not all his plans are visible to us .A lot of increased interest in the stock augers well for the patient

[tightfist] 02/11/2015 08:54

Hi Kinloch,

For sure Hodgson comes over as very credible and hands-on. I bet he isn't paying much for our third ball mill, presumably uplifted from a cash-strapped venture.

Cheers, tightfist