Serabi Gold Share Discussion Threads

[tightfist] 04/3/2021 12:32

Hi tiger, the same query crossed my mind. I can only suggest that with the increased available cash at their disposal they will soon view it as prudent to pay-down Equinox immediately and save on remaining interest charges? Otherwise it makes no sense IMHO..Regards the actual amounts - I am thinking the Jan figures are the capital sums, whilst the $6.6m possibly includes a lot of accrued interest - which may explain why Equinox were so flexible to extend........ I havnt gone back to the original agreement to investigate the precise terms..Solid floor under the share price today! Cheers, tightfist

[tiger60] 04/3/2021 09:06

SRB RNS (January):

'$3.0 million paid in the quarter to Equinox Gold Corp (“Equinox̶1;) under the staged payment plan for the Coringa gold project. Further US$1.0 million paid on 1 January 2021 following which US$4.5 million remains outstanding. Which is planned to have been settled in full during the second quarter of 2021.'

Can someone explain why 6.6m is scheduled to be paid to Equinox out of the funds raised when as at 1 Jan we owned them 4.5m? If we paid a further 1m in Feb I would of thought we owed 3.5m. Appreciated.

Per equity raising RNS:

Use of the Placing proceeds
Repayment of remaining Equinox debt (including interest) US$6.6m
Regional exploration programme US$5.0m
Initial Coringa Project development capex US$3.4m
Redemption of the outstanding Convertible Loan Notes together with Interest and Fees US$2.5m
Gross proceeds US$17.5m

[borisjohnsonshair] 04/3/2021 08:48

I believe it will gain momentum when the stock is issued - 9th March. Until then the liquidity issue remains

[tiger60] 04/3/2021 08:31

I think this will only gain any momentum once 2020 financials are published and the full extent of the quarter 4 costs are revealed: (the balance sheet as at 31 Dec 2020 should show cash at 6.6m from previous 10.8m 30th Sept 2020 - TBC. A reduction of $4.2m!):

As also reported in the Company's news release of 15 January 2021, the final gold sale of 2020 was recorded on 29 December 2020 when a shipment of copper/gold in concentrate left Brazil. The initial proceeds from this sale of US$1.5 million were received in the first days of January 2021. In the preceding quarters of 2020, both the recognition of revenue and the receipt of the initial payments have occurred within the same quarter for all gold sales. Including this delayed receipt, the cash position at the end of December on a like for like basis was US$8.1 million.

During the second and third quarters of 2020, the Company took actions that allowed mining operations to continue whilst at the same time seeking to minimise the health risk to its personnel presented by COVID-19. As part of its actions the numbers of personnel at site were significantly reduced and all work undertaken by third party contractors, including surface and underground drilling crews, was suspended. During the fourth quarter, staffing levels at site progressively returned to normal levels and contractors to undertake surface and underground drilling returned to site. During Q4, costs increased therefore, compared the Q2 and Q3, reflecting the restart of underground drilling. In addition, the maintenance department was very active catching up on the servicing and repair of machinery and other equipment that had been operating with limited maintenance capacity during the preceding two quarters.

At the end of 2019, the Company was owed approximately BrR$14 million (approximately US$2.6 million) in sales related taxes incurred on purchases of fixed assets, consumable goods and services by the State of Para. This debt has been reviewed and confirmed as being due to the Company and the Company has received legal advice confirming that it is entitled to recover this amount. The Company as an exporter does not charge sales tax on its revenues and therefore is unable to recover this debt by way of set-off and is currently reliant upon a cash settlement from the revenue authorities for the State of Para to recover this debt. In light of the financial position of the State of Para, it has been unwilling to make any cash settlement to date. From time to time it has been possible to sell, with the permission of the revenue authorities of the State of Para, these debts to third parties. The Company held at the end of 2019 a provision of 20% of the amount owed (BrR$2.8 million) representing its estimate of the market discount applicable to such a transaction. During 2020, the Company has been unable to progress a potential transaction with a third party and as of 31 December 2020 the value of the debt owed had increased to BrR$17.7 million (US$3.3 million). While the Company continues to seek a means of recovering this debt, it might be required to further provide against it. This would impact the Q4 2020 results. In its working capital forecasts, the Company has not anticipated the receipt of any settlement or payment in respect of this debt.

[tightfist] 04/3/2021 08:01

Hi Sherry,.The company said "Application will be made to the London Stock Exchange for the Placing Shares and the PrimaryBid Offer Shares to be admitted to trading on AIM ("Admission") and listed for trading on the Toronto Stock Exchange on or around 9 March 2021", however the associated Warrants timing is some months away after the AGM..So I would hope to see any Holdings announcements this month, where the U.K. AIM reporting % thresholds are triggered. Not so sure about SHARE holdings increases which don't generate a % change within the placing..I saw your query to me the other day regarding the gold outlook. I don't follow anything specific, just read relevant articles as-and-when. FYI, all my gold miner holdings (except one pure explorer) are in minnow companies with ultra-low PE's, generating quantities of organic cash, combined with expansion programmes..I have not yet found any contenders with those same characteristics in the silver miner space - any good ideas welcome!.Cheers, tightfist

[sherry35] 03/3/2021 20:53

SBI.TSX share price is down on low volume. I guess Greenstone won't have to worry about taking a loss on the CLN.

So, when do we get to see the new names on the registry? Or is it just another carrot on a string from HM

[sherry35] 03/3/2021 20:51

KP2 - I'm 100% support your statement "production , production , production instead of working from home in the U.K.". Arm chair CEOs need to take a page from General Rommel or General Schwarzkopf book on front line mgmt. Still reminds of the CRUX video when MH made the startling revelation that things get done when your face to face.

Lets hope the 3 major investors have lit a fire under the executive team.

[ironstorm] 03/3/2021 20:37

Good post.

The onLy issue is the exec leadership. MH has been in charge forever, production has so far gone nowhere (or reversed even). He left the fund raise too long and raised at a low point.

Bomber you make a bull case. Execution is key and I fear not MH’s strength.

I hope you are right. But I fear more of the same.

[borisjohnsonshair] 03/3/2021 17:47

Wow - inspirational post.

[bomber13] 03/3/2021 17:06

With the gold price in Brazilian Reals having more than doubled in the last 3 years , and Serabi's shareprice having stood still over the same period , it is easy to view yesterday's US$17.5m placing at 75p with a degree of frustration and cynicism .

The simple truth is that Serabi is at a major turning point in its history , and , in order to deliver on its commitment to a future total gold resource of 3m oz ( currently circa 1m oz ) , and being a 100/- oz pa gold producer , this funding will give it the wherewithal to eliminate debt , kick start Coringa , and pay for an aggressive 32000 metre exploration drilling programme on Serabi's highly prospective acreage . Project finance of up to around US$20m will also be sought for Coringa once initial underground mine development has derisked the project for lenders . On its own , the exploration programme holds great excitement particularly at Serabi's Sao Domingos , Calico , and Cinderella prospects .

Significantly , it should be noted that Greenstone Resources has taken stock in the placing so that it remains a 25.2% shareholder . Greenstone bought into Serabi in April , 2018 at 72p per share , so in nearly 3 years it has yet to make a proper return . Given its private equity mandate , the fact that it was not prepared to be diluted yesterday speaks volumes for its confidence in Serabi's future production and exploration . Serabi's largest shareholder , the Fratelli family , held 32.7% pre-placing , and presumably goes to around 25.5% post placing , which means that the so called free float is much healthier than before , and , according to our CEO , yesterday's new shares brought in " some very strong names " to the register .

Although director participation yesterday was non-existent , this may have been because of close season constraints with the Q4 and 2020 figures due so shortly ? Notwithstanding that , it is interesting to note that both our CEO and FD have large option positions outstanding , 900/- and 650/- respectively , some exercisable at 75p and some at 85p , therefore barely in the money . Indeed , the 75p options expire on 1st July , 2021 , which is a major short term carrot for the 2 principal executives .

Serabi's January presentation highlighted the relative undervaluation of Serabi's share price versus its peers , on which basis it was surmised that the shareprice should be nearer 400p once Serabi is doing nearly 100/- oz pa of gold production . With yesterday's funding in the bag , the odds of getting there have certainly shortened .

[tightfist] 03/3/2021 11:10

Hi Loganair, SRB generated a pile of organic cash last year, so they did get it profitably out of the ground, despite COVID restrictions. .Suggest you take a look back to #1931; the Value Creation diagram goes a long way to represent how SRB have a good footing in all three phases, IMHO.

[tightfist] 03/3/2021 11:03

Hi Cotton, any investment based on a rising revenue, margin, eps, FCF, NAV, etc forecast is by definition in a "Jam Tomorrow" company?! .If so, certainly all my holdings ARE Jam Tomorrow contenders.... Cheers, tightfist

[cotton4] 03/3/2021 09:53

Out of interest, the expression jam tomorrow has recently been attributed to SRB an expression which has negative connotations. Could someone give be an example of a company they have invested in which was NOT a jam tomorrow company.

[borisjohnsonshair] 03/3/2021 08:56

What to see what happens to the NAV after the shares are issued and Coringa on the books. Currently 88p per share. No dilution at this price from fund raising but Coringa to be added. NAV will rise to over 150p. 9th March I believe the 16m shares issued.

[borisjohnsonshair] 03/3/2021 08:48

True but Palito is producing and Coringa a "carbon copy".

[loganair] 03/3/2021 08:47

I've noticed ohen it comes to Junior miners and exploration companies how many posters continually bang on about the size of any resource rather then how economic it is to get the commodity out of the ground and to market which is by far more important.

[borisjohnsonshair] 03/3/2021 08:41

I'm sure you are correct - why else are major investors tied in for years and new big names adding. They want to prove up and sell within 12-24 months for US$500M to US$1B. Why else not??

[tiger60] 03/3/2021 08:36

So instead of promising to be a 100,00oz producer every year they are now looking at 3m resource within a couple of years. A shift yes.

[cotton4] 03/3/2021 08:29

Ok I know I am in conspiracy theory but there seems to be a change in the language.

[cotton4] 03/3/2021 08:27

I think that at this time the AISC is less relevent than the 3moz resource they believe they can find. Thats 30 years at 100,000 oz per year. And why allocating substantially more to exploration when that could be used to fund Coringa and improve cash flow. I think they are looking to be taken over by a major. All IMO.

[tightfist] 03/3/2021 08:22

I too am sceptical about SRB AISC projections - but in addition its also worth noting the tailwind of the BRL/USD rate weakening ~30% over the 30 months.......

[cotton4] 03/3/2021 08:18

I am still of the opinion, that they are extremely confident of the resource in the ground. IMO the they knew the placing was fully subscribed before it happened.
They have added some ''strong names'' to the shareholder register which will be of interest. Previously they shied away from a placing due to lack of interest and ended up going down the ''Wonga'' loan road.