Serabi Gold Share Discussion Threads

[kennyp52] 03/6/2024 22:22

Comment .. it’s undervalued if they hit guidance

[someuwin] 03/6/2024 22:21

From Tamesis note: 30 May 2024

Outlook. The company re-iterated guidance in their last quarterly update. The Brazilian Real has weakened to the US dollar since March to 5.10 vs Q1’s average of 4.95. The effect of this will come through in the reported figures for Q2, which will lower the cost, and improve their earnings. Q2 will also see the benefit from the strong gold price as well, at an average price $2,339/oz from 1 April – 29 May, with spot at $2,340/oz. The capital light expansion via the crusher and ore-sorter remains on track for Q4. The ore sorter cleared customs in April and has been delivered to site, and ground works required for installing the crushing plant and the related infrastructure are underway. The costs from the mine development and the expansion at Coringa are upfront costs, and the benefits will be realised in Q4 and onwards, through improved grades from ore-sorting and the flow through to reduced trucking and processing costs per ounce. Furthermore, we expect mining rates and processing to continue to be strong.

Investment Case
Tailwinds from the weaker Brazilian Real and strong gold price are expected to deliver a strong Q2. We estimate group production of 39koz in FY24, and rising to 45koz in FY25. At spot pricing, the growing production profile delivers an EBITDA of $39.6m and $52.9m for FY24 and FY25 respectively. This translates to an EV/EBITDA of 1.5x and 1.1x, and PE of 2.1x and 1.5x. We maintain our target price of 110pps.

[millwallfan] 03/6/2024 21:32

5% rise and no news or comments ????

[stevea171] 01/6/2024 09:45

Millwallfan. Yes, a lot of risks at the macro level with movement towards more war but imo if the world survives gold is hardly likely to be crushed! Fwiw $3k seems more likely than sub $2k and we should see SRB AISC come down from the elevated Q1 result which the company gave an explanation for.

We need to see Q2/H1 results to get a better handle on gold pricing, profit, AISC, EPS etc but as of today there is only 1 month left in the HY so I expect we are on track for decent improvement on recent metrics.

I understand the frustration of LT holders who want to see delivery of actual progress rather than more pie in the sky blather ....!!

[millwallfan] 01/6/2024 07:14

Steve. I do really hope your projections come to fruition. However I think there are too many uncontrollable world and local risks for me to make predictions at this stage. POG could go either way dependent on world events ( e.g. the two wars) and general market sentiment, so let’s hope the $3k analysts prove to be correct rather than a retrace to sub $2k. I am concerned about their ability to achieve a substantial reduction in the AISC and the risk it could go higher. The delays in the licence are both annoying and the market sees it as a big negative. There have been promises after promises on total production ( I bought in many years ago when 100k was supposed to be within the year !). However, I still remain fairly bullish for a 2-3 year decent return and am now fortunately close to break even after years of being underwater !! Good luck to all LTHs !

[stevea171] 31/5/2024 11:57

Millwallfan. Q1 profit of 3.8p was from 9k oz gold sales at av $2081 and AISC $1859 from the financial data released this week. So the margin was $222. The next 3 quarters should do better than this but see what you think ....

[millwallfan] 31/5/2024 11:25

Steve. Does your estimate of 18p per share earnings for the current year take account of the significant increase in the AISC ? It seems very optimistic even with a gold average $2,300. 18p represents almost a 30% return on current share price. Can you please explain in more detail your calculations. Thank you.

[stevea171] 31/5/2024 08:11

SRB Profit per share of 4.80 cents (Q1-2023: 1.94 cents) based on $2081 gold price.

Q1 profit 4.8c = 3.8p

FY24 EPS approx 18p.

PE ratio: 3.6

The $2300 gold price has really only applied from 5th April ie Q2 so far, so higher earnings should be possible Q2 to Q4 if gold $2300 holds or moves higher.

Cheap as chips!

[stevea171] 31/5/2024 07:50

TF. It seems they are expecting the crusher and ore sorter at Coringa to be operational by about the beginning of Q4 so they get the full Q benefit of higher production and lower costs.

So they may be only a few months away from tuning and commissioning the new ore sorter which should bring FY24 production to 38-40k oz and FY25 approx 60k oz if all goes well!

"The ground works required for installing the crushing plant and the related infrastructure for the ore sorter are progressing well with the intention that the plant can be operational for the fourth quarter of this year, processing some of the lower grade material that has been stockpiled at Coringa and boosting gold production in that last three-month period."

[tightfist] 30/5/2024 22:44

Thanks Steve, a nice reality check for a miner now looking to self-fund a considerable production expansion. There will be some interim AISC pain..... . The company is upfront about it, and now the intention to initially sort the lower grade ore stockpile.

[stevea171] 30/5/2024 09:46

Loganair. How many gold miners are reporting AISC's today that are not miles higher than 4 years ago? No projection of costs is to be taken for other than the st which may happen or may not due to many factors. Inflation has been elevated for the past few years causing AISC's to shoot up for all miners without variable development costs, in this case for Coringa to be added into the calculation .....

Mine development costs of $1.6 million represent an additional $1.2 million cost compared to the first quarter of 2023, adding approximately $130 per ounce to the AISC for the quarter but this up-front investment is necessary to deliver the longer term production growth and in turn, reduce the long-term AISC. We need to incur the costs associated with the build of the Coringa crushing and ore sorting plant for the first 9 months of 2024, without seeing the benefit of materially improved grades from ore-sorting and significantly reduced trucking and process costs until Q4 2024 and throughout 2025.

[kennyp52] 30/5/2024 08:57

The most critical comment ..

“ The ore sorter for Coringa, having cleared Brazilian customs on 10 April 2024, has now been delivered to site. The ground works required for installing the crushing plant and the related infrastructure for the ore sorter are progressing well with the intention that the plant can be operational for the fourth quarter of this year, processing some of the lower grade material that has been stockpiled at Coringa and boosting gold production in that last three-month period.”

Annual EPS over 20C ? Hugely undervalued but they still suffer from market confidence given their past performance. Time to deliver Mr Hodgson . This should be at 90p+ now

[loganair] 30/5/2024 08:52

All-In Sustaining Cost for the three- month period to March 2024 of $1,859 per ounce (Q1-2023: $1,516 per ounce).

Just think, 4 years ago Serabi said that their AISC would fall below $1,000 and yet quarter on quarter on quarter it continues to rise to what is now a ridiculously high level.

[kennyp52] 30/5/2024 08:50

You get AISC down with higher production. Are they purposely holding down production to extend their life with the company ? I have my doubts the deadly duo are capable of delivering for shareholders .. meanwhile they continue to deliver for themselves and no doubt if they ever do start to produce decent results they have voted themselves some free shares !

[bsg] 30/5/2024 08:01

They're blowing it with much higher AISC. Not keeping costs under control.

[nickwild] 30/5/2024 07:53

Update looks OK with better to come on gold price now and ore sorter in q4

[borisjohnsonshair] 21/5/2024 10:50

If it's me and I'm in danger, my stock picking advice service will end!

[borisjohnsonshair] 21/5/2024 09:47

Who is this about?

[borisjohnsonshair] 21/5/2024 09:45

I hope no one is threatening me! I want to go to the AGM but I'm frightened.Need to know what plan B is with the license progress stopped, national strikes and long term power outage, hence sky high AISC. No surprise the special items in the AGM allow them to dilute. Big rise was due to trial license extension and full license ETA Q2. Now this is off the table they may need to raise funds before the big drop. Who knows? Pivotal moment. Let's hope it pivots up, not back to 18p

[stevea171] 20/5/2024 22:01

When someone resorts to making physical threats it usually means they have lost the argument.

[borisjohnsonshair] 20/5/2024 20:30

Very true, no criticism

[borisjohnsonshair] 20/5/2024 20:11

FFS - ignore me and I'll go. TraderMoron keeps coming and going but I'm not like that. Honourable

[highley1] 20/5/2024 19:36

Boris,

I don't understand your criticism of G Mining, they are in a different league, and that team have succeeded before, several times.

I don't like their new deal as it's in Guyana's Esequibo region, but so far Venezuela is only sabre rattling.

[borisjohnsonshair] 20/5/2024 19:06

I think SRB can survive, after Coringa is shut down, IF, gold goes to USD3000. Hopefully you'll be ok.