Serabi Gold Share Discussion Threads

[loganair] 18/6/2019 09:32

When the price of gold rises in US$ it is also important for the price of gold to rise in the local currency as well.

As the rise in the price of gold in US$ maybe because the US$ has weakened against the local currency and therefore there has been no real rise in the price of gold.

And currently the price of gold in rising in the local Brazilian currency as well as the US$.

[ppvn] 18/6/2019 07:55

Hi Tightfist,

Apols for the late response!

I agree with your final point re. Anker selling having been a bit of a blessing in disguise. The share price has been a disappointment to LTH's but the progress being made hasn't - something that bomber13 pointed out at the time of the mid-20p's. I also think the jump in the POG was very fortunate.

Seems that more people have cast an eye over Serabi and decided it is undervalued and because of the low liquidity of the stock has helped begin to propel them northwards.

I bought in because I like gold as an investment in this fairly late stage cycle in the overall context of the broader equity markets, and I like the premise of growth to becoming a 100k producer. Of course when they get there it'll be increasingly important that they reduce further the AISC which it does seem they have been really focused on. Keen to see what 2021 can bring, but that's my investment timeframe that I've planned.

[gregpeck7] 18/6/2019 07:20

Gold price now up almost 10 usd. 1350 in sight again.

[borisjohnsonshair] 17/6/2019 08:20

Less is more - ie you'd be better off shutting up for a while.

[gregpeck7] 17/6/2019 08:16

Very light selling. This has 100p all over it. Should grind higher all week based on the latest update. Crazy mkt cap.

[gregpeck7] 17/6/2019 08:05

Nice start. Only 1 mm at 60p left. Has to move into the 60 range today.

[gregpeck7] 16/6/2019 15:03

Getting closer to 8am. 60p tomorrow? My strong suspicion is yes.

[tightfist] 16/6/2019 08:54

Thanks PPVN, I understand the detail has been communicated, I (and I think CL) just wanted to try and ensure that folks were aware when making Q1 vs Q2 comparisons..In a side conversation we remarked upon the recent Anker Holdings selling. Ironically this action has possibly increased both interest and liquidity? Cheers, tightfist

[ppvn] 15/6/2019 20:05

Thanks tightfist,

Appreciate the feedback and for attending. The q1 deferred sale was also covered in the q1 management discussion, can add the precise comparison to q2 below:

"The value of finished goods awaiting sale at 31 March 2019 of US$1.97 million compares with the value at 31
December 2018 of US$3.82 million an overall decrease in value of 48%. The total value of finished goods held in
stock at 31 March 2019 comprises 97 bags of copper/gold concentrate with a value of US$0.77 million (31 December
2018: 236 bags with a value of US$1.45 million) and bullion on hand for smelting which, at 31 March 2019, was
46,740 grammes valued at US1.20 million compared to 86,744 grammes at 31 December 2017 valued at US$2.37
million. Whilst there are small variances between the two periods in the unit costs for each of these items, the
variance in period end values is largely explained by the volume variances."

[gotabsirius] 15/6/2019 19:58

Thanks for that TF. Yes the main reason for a major uplift of fcf and profit in Q1 was deferred gold sales from previous quarter. A few have tried to spin this out as sustainable fcf!

[tightfist] 15/6/2019 18:42

Hi, a pretty comprehensive AGM statement was RNS'd yesterday which says a lots and seems to have been appreciated by the market; it's a shame that only three shareholders attended. At the AGM I sensed both hard work and diligence from MH and CL; they have a methodical but progressive (as opposed to gung-ho) approach, which takes time and patience to deliver and IMHO confirmed there are several potential value-inflection points in prospect over the next 18 months. The single biggest event will be permitting at Coringa..I remain confident the Coringa PEA will be issued within the next couple of months and then enable the negotiation of a "financing package" referred to on page 6 & 13 in the AR; for LTH I recommend close consideration of the AR, it contains a lot of info to augment BB banter..From the floor and BoD there was unmistakable anticipation of what Cinderella and other Sao Chico anomalies may hold, based on the survey on page 31 of the AR. Anticipating directional soil geochemistry results, I got the sense that cash flow/availability will determine follow-up drilling timing, to be determined a lot later in the year..Incidentally there was mention of the deferred Q1 gold sale which may be misleading in short term quarterly financial comparatives/projections?.Cheers, tightfist

[gregpeck7] 15/6/2019 09:22

So a few things,

I have read, and re read the RNS multiple times, there is so much information in there, its quite an intense read... Everytime you read it though you cannot help but feel excited.. So much going on at the moment...

A few takeaways from myself - and I will keep them high level. Nice to be at a PC and not on phone app.. So will be more expansive.

Share Trading..

1. Looks like that delayed 40,000 buy that is showing cleared out the MM's, you could only get 5,000 online at close... If you want shares Monday, I suggest going early, I very much think this will be trading in the 60 - 80p range now.

2. "Cinderella Zone"

Apologies for not knowing "who" here is particularity interested in this target, but I know it is one of our regular contributors. This latest news release does seem to have let the cat out of the bag to a large degree, it looks very likely that we are sitting on a very large deposit within our existing license area. This is fantastic news, the board I think are quite conservative and they are on record now as saying how exciting this is. Also reading other parts of the news release it makes it very clear the exploration budget has been unlocked and targets could well be drilled this year. If this ends up being a significant discovery then SRB is suddenly in another place entirely. Very, very good news.

3. Production and operational efficiency

So guidance held / slightly raised towards 44,000 ounces this calendar year. Excellent news, looks like they are wringing out every last bit of gold they can with the equipment available. Good management delivering a strong operational performance leading into ramp up is highly encouraging - they know what they are doing.

4. Gold price rising

Very much looks like the gold price is breaking out. I suspect we will see it over 1400 USD which will be tranformational for many gold miners not just SRB and will see fresh capital flow into the sector. I see this as a highly conservative target.

5. Working with local authorities

Good to see SRB working with the relevant agencies, adapting plans, learning about what is working and what is not, and being part of a team, not trying to ram plans through that they want just because "its their plan". Learning from experience and continually improving is a vital skill.

6. Coringa PEA - likely to be outstanding

Coringa is looking like it will be an outstanding investment with a strong PEA forthcoming early Q3, likely to drive the share price on and at this point we will have paid for it, we just need to develop it. You cannot help but read the latest news release and reading between the lines, they know they have a quality asset there, we just need to know "how good" it is. I would not rule out further increases in potential resources.

7. General exploration success

They have been busy with the drill bit and my less than professional mining knowledge tells me they seem to be finding extensions to their gold areas in both possible directions, one greater than the other... Clearly I am happy about this...



And all of the above for 30M quid?!

Come on

Added a few Friday and if I can squeeze a few more in will top up Monday..... Anything under 100p here chaps, we should be arrested for theft.

Hope you all have a good weekend, I am still buzzing from this update... Lets see what happens Monday.

Be very interested to see what our friends who attended the AGM's takeaways were, any comments on tone / persona? Hopefully they were very upbeat. Also interested in our more "mining specialist" type posters views on what we might be sitting on just within our own license areas, as I am now thinking it could be a hell of a lot more that I was thinking a few days ago!

And finally guys, promote this stock, tell people about it, bring it up in discussion.. All this now needs is eyeballs, it speaks for itself once you are here.

GP

[gregpeck7] 14/6/2019 16:37

It's your call mate. If that's small fry then maybe you should learn to read the accounts at least?

[ppvn] 14/6/2019 16:32

There has been quite a bit of discussion about the final payment for Coringa on this board previously if you're interested.

For what it's worth, my take is that Serabi (and its shareholders) have been really fortunate that the gold price, particularly in BRL has been so strong. It's basically got them to a position where they are making operational cashflow of around $6.5+mm (I say "+" because q1 the average price was around the $1290 mark, and aisc was around $1020, both which should improve for q2) per quarter.

Their cash position will be in excess of $12mm by the time the Coringa payment is due, but by how much depends largely on the POG as well as their AISC continuing to fall, which it should (costs in BRL so should be relatively lower, as well as scrubber continuing to lower cost). The question then becomes will they be generating enough FCF to pay for the ongoing development of Coringa, buying processing plant, machinery, etc etc. They obviously need some cash in hand to make sure they don't overextend themselves.

By the time December rolls around, the Sprott loan (was $8mm, repayable in equal installments to June 2020) will have $2.2mm left to repay, they have derivative exposure to 6.5k oz @ $1,320 to Sprott until December this year, so it'll be close I'd imagine, as to whether they can fully fund both the final Coringa payment as well as building out the mine in 2020. They should be much more profitable next year thanks to the ore sorter, but it won't give us any real idea as to what cost benefit it can provide until that time.

So maybe they can, but maybe they will need either a small loan or small equity placing? But then that isn't until next year and if gold keeps rising they may get away with it and make a pot of cash too! It's not something I'm personally considering selling over, but that's my decision so make your own mind up!

Edit: sorry forgot to mention, the last equity placing they did was for a large %age of the company and they actually secured a premium over the market price at the time. It's such an illiquid stock I doubt they would be able to place shares at a discount.

[ahmedbin69] 14/6/2019 16:31

Don't worry GregI am invested. Only a few thousand pounds worth. Nothing big.

[gregpeck7] 14/6/2019 16:23

Strange that a holder would keep finding or trying to find negative angles...

[ahmedbin69] 14/6/2019 16:19

I have a small holding here if you scroll back you'll see I bought in at 50p

[ahmedbin69] 14/6/2019 16:18

Greg I'm not as clever mate. So just asking .

[gregpeck7] 14/6/2019 16:17

Pa Ahmed considering you hold allegedly you do love trying to find a negative. Sold out and missed out by chance?

[gregpeck7] 14/6/2019 16:16

They have a liability of 12.1 million usd to purchase Coringa that needs paying. They may well have that in the bank it might be tight , but the balance is small change. They have to call out the risk though. You will find statements of that nature in all plc's where they have a liability it's standard practice.

[gregpeck7] 14/6/2019 16:14

That's a standard accounting risk statement. Surprised you need to ask.

[ahmedbin69] 14/6/2019 16:14

What will be their contingency or with hold price up and quarterly gold increases do you think they will have the money to repay

[ahmedbin69] 14/6/2019 16:13

Greg what do you think about the statement made as per below As at 31 March 2019 the Group had cash in hand of US$12.1 million and net assets of US$70.2 million. The Directors have reviewed the forecast cash flow of the Group for the next 12 months. Based on this forecast, which includes planned capital and exploration programmes, the Group may not be able to generate sufficient cash flows to settle, in full, the deferred consideration of US$12 million payable for the acquisition of Coringa which falls due in December 2019.

[gregpeck7] 14/6/2019 16:05

Hopefully the guys at the agm can clarify exactly what they seem to have here.. they are clearly very excited as were some of our posters and with good reason it seems.. "The most stand out feature is an extremely pronounced magnetic high that runs east west across the tenements. This is a regional feature and we see many of the electromagnetic anomalies lying on the flanks of this magnetic high. In addition, the survey identified the smaller but nonetheless very exciting anomaly named the 'Cinderella shear' which is located traversing the Sao Chico mining license area in a south west to north east trend. In the airborne survey this was highlighted as an eight kilometre long magnetic and electromagnetic high.

[gregpeck7] 14/6/2019 15:51

Nice one. A few 6 figure investors rock up now and things will get very interesting very quickly. Would love to be at agm.