Serabi Gold Share Discussion Threads

[bsg] 27/3/2020 09:49

Probably have a placing @ 20p

[ironstorm] 27/3/2020 09:34

Cotton 4 you might be right - Equinox want their money in this climate they might tske a smaller interim amount or just agree to a delay.

Greenstone deal does need to be killed off. Remember their financing was exorbitsnt cost.

[cotton4] 27/3/2020 09:06

May be I am being too simplistic. Ask Equinox for a 3 month extension at current terms
until the loan notes are in place or tell them they simply can't pay. There is real value in the ground and with the ore sorter now up and running we are probably looking at a 50,000 ounce company once cv goes away.

[borisjohnsonshair] 27/3/2020 09:02

Yes but small price to pay to be rock solid. If they sell down the river to the major backers, over Coringa it's very dodgy.

[cotton4] 27/3/2020 08:55

They seem to have more in and around Palito and Sao Chico to keep them operational for
years. At current pog and currency advantage, build up cash. They may be sued by Equinox but how long would such a process take to go through the courts in this current environment. Empire building leads to over trading. We need to get off this debt cycle unless its cheap funding from the government.

[tiger60] 27/3/2020 08:52

But wasn't the 12m the final payment? That would mean walking away from the deal and the prepayments made

[borisjohnsonshair] 27/3/2020 08:47

Safe bet. Leaves them cash rich and stress free. Wise move in the circumstances. They can shut and be fine for months, then pick up again, run with Palito and exploration.

[cotton4] 27/3/2020 08:44

Or just not pay Equinox. Give Coringa back leaving them with cash for existing operation.

[tightfist] 27/3/2020 08:38

Hi Ironstorm, Sherry,.I tend to agree with the Greenstone conspiracy theory - dressed-up as prudence? in the current deteriorating environment..I suspect they will either quickly (by 31st March) get the Greenstone deal over the line - or need to nullify the GM motions and either (1) arrange some interim (expensive!) loan funding from Sprott and/or Fratelli - or (2) negotiate a further extension with Equinox..A government-induced mine shutdown or shipment/receivables glitch for more than a few weeks must surely be unlikely - but that is what would make a loan expensive! One wonders what other CV curve-balls will emerge!.Cash is King!! All the best, Roger

[borisjohnsonshair] 27/3/2020 08:31

Big conspiracies!!! Why would they announce such fantastic grade in their exploration if they are pulling a fast one.

[ironstorm] 27/3/2020 08:04

I feel Sherry may be right. Greenstone are doing what their type do - taking advantage of the situation. It was a poor deal to start with. They were too cosy and have now shown true colours.

If it is a different deal then they should come back to shareholders.

Equinox is the big unknown. Better to pay the, if can. Extend Sprott if we can. And muddle along for a few months whilst gold price makes hay.

Cosy deal with Greenstone should be dropped.

[trader365] 27/3/2020 07:47

BorisJohnsonsHair27 Mar '20 - 00:26 - 5814 of 5816

It’s not going to shut for three months!!!

Just like its not going to 60p??

Nobody knows how long nines will be closed for, perhaps months!

[sherry35] 27/3/2020 05:38

Remember my posts on the Russian Bear surviving the self-induced reduced oil revenue snow storm. Well .. Putin's economists came up with a brilliant way to lessen the pain. Barrack's Chicago economist buddies didn't see this coming.

[sherry35] 27/3/2020 05:22

tightfist - I think Greenstone wants to leverage a better deal using COV19 as a guise to back away from the deal "for the satisfaction of all the conditions necessary". Not buying it!! I would like to see the contract which I think investors are entitled to see under Ontario Corporate Act. I have my suspicion about this event that I will get to in a moment.

No mention about discontinuing the drill program or a progress update. Announcement of any drill results to the retail traders is now conveniently gated by "a trading blackout" as a result of filing the financials late. All the accounting can be done from home like most white collar professionals are doing these days. Can't blame late accounting on COV-19.

I wonder if the drill results are being discussed on hole 19 at the golf course. I suspect the drill results are extremely good and one of the other invested institutions, or "johnny-come-lately" investor, wants a piece of the action.

Greenstone can back away from the contractual deal anytime. SRB doesn't have enough cash to fund a legal team and keep the lights on. Nobody will invest in firm that has a legal action.

[borisjohnsonshair] 27/3/2020 00:26

It's not going to shut for three months!!! Nothing is in the world. It'll be 2-4 week, if at all. Tiny loses. Not a good year but does change the outlook. Lose a few million in refinancing and shut down. No biggy.

[tightfist] 26/3/2020 22:02

Hi Sherry,I haven't gone back to check my memory, but my recollection is that the CLN volume was carefully arranged such that Greenstone were JUST below the mandatory offer level (if the GBP weakened considerably). If they simply were to reduce the conversion price then my thought is that it would trigger an offer obligation (unless it's waived?).But surely Fratelli (and its Concert Party members) would blow the whistle? Hence my thoughts about Fratelli dibbing-up; at least it may be a tool to keep Greenstone on-task?But I don't know how the GM In London on 26th February ties their hands? Presumably it would have to be nullified and start over? In this situation, not sure what latitude is vested with executive management. Expansion and extension of the Sprott loan arrangement is one potential avenue, possibly combined with some deferral deal with Equinox? But not sure how the Greenstone deal ties their hands, unless it is cancelled?The ultimate Silver Lining for the ultra-patient could be the cancellation of the Greenstone CLN deal, a temporary loan, stratosheric PoG, paying-off Equinox this year with organic cash, etc etc. Dreaming again tightfist

[sherry35] 26/3/2020 21:24

What are the indirect operating costs? In other words, what is the total quarterly operating costs if the mill shuts down? Does SRB pay unemployment wages or severance? Will the executives take a pay cut because the operations are on C&M?

[trader365] 26/3/2020 20:26

Fratelli's investment is a small percentage of their overall net worth, they can afford to write it off.

The biggest risk is; if production is suspended nobody knows how long before its restarted. Perhaps weeks, perhaps months.

Although not in Brazil, HOC (Peru and Argentina) halted production on 16th March and plan to restart on 31st March, (Tuesday) but it's 'subject to government approval'.

Keeping my eye on them to see whether they restart as planned, or stay on care and maintenance until further notice.

[sherry35] 26/3/2020 20:12

tightfist - The March 26th 2020 press release doesn't mention the terms of the "Convertible Loan Notes" (CLN) with Greenstone. Here is the brief summary of the CLN from the January 22nd 2020 press release:



Given SRBs reputation for never delivering on time over the past 5 to 7 years, and now COV19 guarantees SRB's inability to meet the delivery terms of the Jan 22 CLN, do you think this is a good opportunity to renegotiate the CLN BUT at a lower share price? Say convertible rate of 50p. Think about this over a pint and get back to me.

[ironstorm] 26/3/2020 20:05

I never trusted Greenstone. They have a board seat and may look to buy company on the cheap.

[tightfist] 26/3/2020 19:58

On reflection I guess Gold sales are running at $5m per month - may be a receivables issue? How inconvenient..... does their gold get shipped to Ticino by any chance......

[tightfist] 26/3/2020 19:54

A b - - - - y good question!

[tightfist] 26/3/2020 19:52

Can't disagree, except that I hadn't read this as Greenstone backing-out - May be semantics, may be the sign of things to come ? Elsewhere they give reassurance that Greenstone remain supportive - would like to know the voracity of those "conditions"!.I don't anticipate Fratelli sitting back and watching their investment go up in smoke. They are in for the long haul and have recently been diluted, maybe they will enter the fray to re-increase their % holding?.Regarding your Q4 further funding comment, if PoG stays around this level I would have guessed that operational cash generation would render further funding unnecessary - especially after freezing drilling activity?