Serabi Gold Share Discussion Threads

[kennyp52] 04/8/2020 19:12

Fingers crossed POG holds

2,005.84 +32.95+1.67%

Even if this doesn’t to be honest at $1500+ for the next few years should see this perform extremely well . Resources are eye catching . Self funding of expansion would be very positive .

Boris you might actually get your rise now POG is going to put the Investor spotlight on gold miners with this one being one of the cheapest in my opinion .

[edit] cheapest is not appropriate ... best value is probably better ?

By the way .. gold still going up into the US close .. now hitting $2009

[loganair] 04/8/2020 18:55

$2,005.19 / 10,621.60 BRLs - Price of Gold at all time high in both currencies.

[tiger60] 04/8/2020 18:48

Gold over $2000

[imastu pidgitaswell] 04/8/2020 16:29

Apart from...

[tiger60] 04/8/2020 16:04

Everyone moved to Serabi Gold thread Sherry

[sherry35] 04/8/2020 15:44

Mr. Mike Hodgson reports

SERABI EXTENDS DRAWDOWN PERIOD FOR CONVERTIBLE LOAN

Serabi Gold PLC has agreed with Greenstone Resources II LP to extend by six months the period during which the company can draw down on the $12-million (U.S.) convertible loan facility that was announced on April 23, 2020, and is being subscribed for by Greenstone.

Mike Hodgson, chief executive officer, commented: "Extending by six months the period in which we can draw down on the convertible will relieve pressure to draw down funds earlier than might otherwise be necessary and avoid incurring additional debt under the convertible that may ultimately not be required. This is excellent news for the company and its shareholders.

"Despite the COVID-19 pandemic, we have continued mining operations at the Palito complex and with the gold prices that we have benefited from during the second quarter of this year, were able to pay down the remaining $3.5-million (U.S.) of the loan with Sprott Resource Lending Partnership whilst maintaining our cash position. Despite lower production levels, the second quarter was one of our best-ever quarters from a cash flow perspective. Greenstone provided Serabi with the convertible as a means to help ensure that the company was able to complete the acquisition of the Coringa gold project. With the gold price looking set to be maintained, the Sprott loan now repaid and projected production levels, we currently anticipate that Serabi can fund the $1-million-(U.S.)-per-month instalments that are due to Equinox Gold Corp. for Coringa, at least in the near term, from the cash flow generated from ongoing operations."

Details of the variation in the terms of the convertible

The original period during which the company could draw down funds under the convertible was due to expire on Dec. 31, 2020, after which time any funds that had not been drawn down under the convertible would no longer be available. The company and Greenstone have now agreed to extend the availability period to June 30, 2021. In all other respects the terms of the convertible are unchanged. There was no consideration payable to Greenstone in respect of this variation to the terms.

As at Aug. 3, 2020, the company had drawn down $2.0-million (U.S.) of the convertible and made payments of $2.5-million (U.S.) to Equinox Gold Corp. in respect of the $12-million (U.S.) payment obligation for the Coringa gold project. After these payments, the balance of the outstanding consideration amounts to $9.5-million (U.S.). Under the arrangements agreed with Equinox, the company will continue to make payments of $1.0-million (U.S.) per month until such time as restrictions imposed as a result of the COVID-19 pandemic on travel to and within Brazil are lifted at which time any remaining balance of the outstanding consideration will become due within six weeks of that date.

Related-party transaction

Alternative Investment Market

As Greenstone is currently interested in more than 10 per cent of the issued ordinary share capital of the company, the amendment to the availability period is a related-party transaction for the purposes of Rule 13 of the AIM rules. As Mark Sawyer, a non-executive director of the company, is a nominated board appointee of Greenstone, he is not independent for the purposes of Rule 13. For the purposes of the AIM rules, the independent directors of the company (being the directors other than Mr. Sawyer) consider, having consulted with the company's nominated adviser, Beaumont Cornish, that the amendment is fair and reasonable insofar as shareholders are concerned.

[borisjohnsonshair] 04/8/2020 12:04

Hey - tight-fisted - you are having a nice day on ALTN. Not sure why rises in SRB are so painful.

[ppvn] 04/8/2020 11:54

They did a lot of low grade ore when they were extending their mining access hence higher aisc. Also believe in one of the interviews Mike mentioned they'd been stockpiling supplies to get them through the covid disruption.

Their aim is to get to around $850-$900 aisc I believe - although the lowest I've seen in the past few years is around $1k.

[cyberbub] 04/8/2020 11:06

Yes fair enough about point 1 Boris, but even $1000 AISC sounds high with over 6g/ton. Is the mine area hard to access or has high disposal costs etc?I bought some hear while DMOR but am considering whether to buy some more.

[borisjohnsonshair] 04/8/2020 11:02

Hope you are less niggled. Much better BB now!!!

[borisjohnsonshair] 04/8/2020 10:58

1 - I believe the AISC cost increased temporarily due to mechanical failure costs. It may remain high due to additional Covid planning costs and reduced staff but I assume they still pay the ones in quarantine. I believe if all was normal and 48,000 output achieved, it would be US$1,050. When Coringa producing they estimate low US$900s due to shared admin and facilities. 2 - the license is delayed due to social distancing. The group that approves haven't been meeting. MH suggested a zoom meeting might go ahead - a first!

[cyberbub] 04/8/2020 10:45

I just have a couple of little niggles here, 1. With grades so high (over 6g/t), how can cash costs be so high as well? Over $1000 in the last quarter, and $1250 AISC. Makes it a more risky investment...2. Is there any risk that the Corona expansion might not get its licence?Thanks.

[borisjohnsonshair] 04/8/2020 10:21

Spot on. FCF when Coringa in production will make mince meat of our current MCAP level. As you say - Coringa license is a massive milestone which might be putting off investors - not us but that's why under 100p investors will be sitting very happy as it dances around 4-5 quid. Then it will go to a tenner as the major exploration updates flow.

[bomber13] 04/8/2020 10:12

I wish I could time my investments the way I timed last night's lucky post !

We will obviously know a lot more with Q2 and interim results in the next 2 weeks , and if we were also to receive the Coringa permit as expected in the next few weeks , we should be well and truly off to the races .

Today's announcement gives Serabi enormous flexibility on future funding , but it also shows the board's awareness about the dilutive effect of the Greenstone convertible at a time of rising cash flow . This is significant , and , following the 2020 option award in May , key directors and staff have very much more skin in the share price game than before , which is great to see . The more that the market feels confident this convertible dilution will be minimal , the more the upside in the share price .

In the last 12 months the share price has struggled to get over 90p , whilst the gold price in local currency terms has risen from R6000 to today's all time record of R10500 . Today's gold price is already nearly 10% higher than the average price Serabi received in Q2 . Serabi's enterprise value is currently around US$60m at 90p , our free cash flow in 2020 should be around US$17m , and 2 years down the track at 100/- oz pa Serabi could be making at least US$100m of net profit at today's gold prices .

[borisjohnsonshair] 04/8/2020 09:22

Lowest daily cases of Covid in Brazil for 2 months.

[blueeyes13] 04/8/2020 08:42

Thanks for all the useful info everyone. I joined with small initial holding a few weeks back and happy to increase that today. Will add more as positive news hopefully progresses. GLA

[borisjohnsonshair] 04/8/2020 08:29

I don't get it. What's it gunna take - license, Coringa start production, output started, output 100,000, AISC US$1,000, FCF of US$60M yearly - cash in the bank exceeding the MCAP!!!! Exploration resource estimate of 6 figure sum!!! What's it gunna take

[ppvn] 04/8/2020 08:27

Hey bojo, I'll total up the OILQs tonight, somewhat indisposed at the moment!

Could make sense if they have been selling more. And Tiger, saw yesterday you'd said that the buys were the agreed transactions - I personally think its the sell that has been agreed which is why the oilqs are trading slightly inside the advertised offer...

[tiger60] 04/8/2020 08:24

No reaction to RNS

[borisjohnsonshair] 04/8/2020 08:19

PPVN - how many of the odd trades have you tallied? Still a batch selling at 89.25. Once gone this will rocket