Serabi Gold Share Discussion Threads

[tightfist] 14/4/2020 10:53

I have a hunch to agree, and I have just started a spreadsheet looking at cashflow forecasts to check it out..Having listened to the Crux interview I don't think we are going to be so lucky - perspective from MH is that (rightly or wrongly) its now just a matter of time to complete - as well they might as the share price rapidly claws its way back to 76p plus, IMO..But maybe the Q4 new debt raising will now be put on hold?.Happy events amongst the all the sorrow, tightfist

[ironstorm] 14/4/2020 10:37

The more I think on it the more I think we don't need Greenstone. We have the cash to make the final payment - we are throwing of sufficient cash to repay Sprott - we have cut back expenditure and Coringa development is now going to be later. Funding of a different structure could be achieved in due course. And with someone who is not as cosy.

All of this without gold price tailwinds.

[ppvn] 14/4/2020 09:12

Interesting explanation from Mike with regard to the Greenstone financing agreed back in Feb in the video.

Personally very reassured that we'll be back at the highs soon enough.

[morethanme] 14/4/2020 07:59

Good RNS this morning, interview released with the RNS this morning can be found here:

[tightfist] 14/4/2020 07:56

Yes, an absolute cracker of RNS. If we can keep going like this one wonders about the need for renewed indebtedness later this year - and is there now more pressure on Greenstone to speedily honour the 22nd Jan CLN deal?.Cheers, tightfist

[tightfist] 14/4/2020 07:53

Hi Sherry,There are some more representative OS figures within the Q1 release this morning. (MH is on record as saying the first trial statistics were sifting a pile of rubbish). The OS figures operating on Palito ore continue to impress - IMO even more so. Bodes well for Coringa too, in due course.In last week's news at the bottom of the 3rd paragraph MH says that SC ore will put to the OS later this year. We already know that it would require a different sort process.Cheers, tightfist

[ironstorm] 14/4/2020 07:30

Wonderful RNS. And look at the Pog. Next quarter could be very interesting.

[tidy 2] 14/4/2020 07:15

Happy with that news.

[sherry35] 14/4/2020 03:25

I was looking at 10 February 2020 and marveling at the efficiency of the ore sorter processing 1.20 g/ton.



It reduced the mill feed stock by 85% and increased the grade by a factor of 4 (rounded down). The current mill is receiving 85% less Palito ore. This has to open excess capacity on the Palito ore processing side of the mill. With Coringa ore being identical to Palito ore, SRB team may be re-evaluating the short and long term mine plan.

I'm wondering if SRB and the engineers figured out the ore sorter operational settings for SC ore.

[sherry35] 12/4/2020 03:08

HCl production to increase in Brazil as I suspected given their high malaria populace. My country is following the WHO.

[sherry35] 11/4/2020 19:00

bomber13 - It think it maybe prudent to what 2Q 2020 production numbers on Palito mill. The ore sorter will hopefully be in production for one full quarter. We'll find out the cost and capacity of Palito mill with the ore sorter engaged. And with any luck, SRB may have head grage numbers on sorting SC ore. They were experimenting with sorting SC ore but I'm not sure of the outcome.

All - enjoy your Easter Weekend.

[millwallfan] 11/4/2020 17:38

Brazil president thinks this is just a 'little flu' and will not even introduce social distancing controls. Let's hope the population and Serabi workforce are taking it much more seriously

[bomber13] 10/4/2020 23:18

Sherry , I am not sure they have got as far as drilling Cinderella yet , and , as you know , they have slowed exploration to a standstill right now , so we may not know for a while yet .

Post repaying the US$3.5m Sprott debt by end June , and assuming Palito and Sao Chico are still operating as normal , which is possibly a big ask (?) , and the ore sorter has got AISC down to around US$1000 , then I don't see why free cash flow shouldn't be what you say it could be , but it is not a given .

The Palito plant is at capacity or near as dammit , and it is the Coringa plant that will have spare capacity at current assumed rates of production , but it will not be operating for a while yet even with the environmental permit being granted any moment now . If I remember rightly , ore sorters come at a cost US$1m or US$2m .

[sherry35] 10/4/2020 19:01

bomber13 - All good points on your part. I want to see the "final results from the step-out drilling at Sao Chico". Do you think it includes drilling of the Cinderella lode? Who else has seen the unpublished results?


Post "30 June 2020", SRB's debt obligations is to Equinox. How much will SRB be clearing after costs and Equinox payment post "30 June 2020"? I'm wondering if the cash flow will be approx. $10M US for 2H 2020.

I'm still wondering about the long term mine plan for Coringa when the PC ore sorter is creating excess capacity in the mill. Would it be cheaper to crush/sort/truck the "concentrated" Coringa ore to PC mill versus fully implemented Coringa mill. The ore sorter is "game changer" for SRB in reducing costs and increasing revenue potential.

It should be noted that Palito and Coringa have similar geology. This would expedite the purchasing and commissioning of ore sorter for Corringa. A secondary benefit is a reduced tailings requirement. $10M US cash flow could easily pay for a second ore sorter.

What are your thoughts on smaller scale operation at Coringa i.e. crush/sort/truck concentrated ore to the Palito mill?

[bomber13] 10/4/2020 17:43

Great news yesterday that Equinox has been amenable to allowing stage payments of the final US$12m due on Coringa . However , I suspect the share price would have moved a lot higher than it did had we also received Greenstone's similar acquiescence to stage payments of the Convertible , and confirmation that the conversion terms remain at 76p per share .

The original Convertible deal with Greenstone was made public on 22nd January this year when gold was US$1555 , or R6500 in local Brazilian currency . The two respective levels as of today are US$1690 and R8636 , a massive 33% improvement in local currency terms . Day to day operations at Serabi have yet to be affected by Coronavirus restrictions , and , because of their remoteness and measures already put in place by the management , they may still escape needing a temporary shutdown .

Given the above factors , Equinox's amenability , and recent confirmation that the ore sorter is working excellently , it would seem highly unlikely that Greenstone would turn round , and ask for a reduction in the conversion price . After all , they already own 25% of Serabi at 72p per share , and the phrase " cutting one's nose to spite one's face " springs to mind .

We are due final Q1 production stats next week , and despite the ball mill issue in February , we have been told to expect a production level of just over 9000 oz , comparing with 10223 oz in Q4 2019 . However , because the average gold price in Q1 was around US$1580 versus US$1475 in Q4 2019 , and the Brazilian currency fell 30% from 1st January to 31st March from R4.01 to R5.21 , Serabi's financial results should have been well and truly insulated .

We are still due the Coringa environmental permit any day now , providing no central government delays , we are still due final results from the step-out drilling at Sao Chico , and we are still due initial exploration results 2km to the West of Sao Chico , so there is still much to look forward to .

Over to you Greenstone - don't mess us around , agree to stage payments and no change to the conversion price on the Convertible , and the share price hopefully goes back towards 100p .

[morethanme] 10/4/2020 14:16

Very interesting video W1sdefool, the detachment of futures gold contracts to spot prices has been very interesting to watch and highlights the current demand for physical gold over paper.

[w1sefool] 10/4/2020 11:49

I suggest investors check the June Gold Futures price and listen the Andrew Maguire a real expert. Interview start from the 17mins mark.

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[borisjohnsonshair] 10/4/2020 09:36

Look at gold!! If we stop exploring and aren't developing Coringa, we'll have a AISC of say US$1,000 (with ore sorter working), so could clear 40,000 / 12 x US$700 a month = US$2.33M a month. Maybe we should do that for 9 months and settle debt & Coringa US$12M, without a CL. Still need US$20M to develop it though.

[sherry35] 09/4/2020 17:09

tightfist - To further add to observation #1. $3.5M US equates to 7 $500K Coringa payments. So long as the Palito Complex operation continue to operate, I don't see the need to draw down on CNL post "30 June 2020". Starting in 3Q 2020, SRB's obligation is the $500K US monthly payment (or bit more) to Equniox. This is quarterly payment of $1.5M US or bit more given the purchase terms.

[sherry35] 09/4/2020 17:01

tightfist - In addition to the things discussed, I was wondering about the following two items:

1) "principal due to Sprott is US$3.5 million which is to be paid in monthly instalments with the final payment to be made on 30 June 2020"

Once the Sprott loan is paid off, I'm wondering if SRB will continue to pull from the Greenstone CNL? With CV lock down in Brazil provinces (hindering Coringa construction), POG rising (increased revenue) and ore sorter reducing costs and increasing head grade (increased revenue, decreased costs), does SRB need to the CNL after June 30 2020?


2) "agreed to extend their rosters in order to eliminate crew changeovers in the immediate term"

The workers will need downtime to reduce fatigue and mistakes. I expect the work schedules to be tailored to minimize equip. failures and mining accidents. I'm wondering if the Q2 2020 production will match Q2 2019 production with ore sorter picking up the slack.

+++++

Once Sprott loan obligations end in Q2 2020, SRB's cash flow will increase.

[cotton4] 09/4/2020 15:28

The gross margin for 2019 was 37% but 40% in the last qtr.
I would expect the 1st qtr of 2020 to be about 50% and thats before the ore sorter.
I expect they will need a few weeks to get a true indication of how ''terrific'' the ore sorter is.

[borisjohnsonshair] 09/4/2020 15:21

Look at gold go!!! US$2000 coming

[tiger60] 09/4/2020 11:57

They have stated Qtr1 prod is 9,000.

[tightfist] 09/4/2020 11:55

Q1 production could be expected during next week, but not sure what could be added to this morning?.There is a long list of potential good news flow - see Bomber's posting of a few weeks ago. It would be good to re-review realistic expectations in the context of the situation described this morning.