Shanta Gold Share Discussion Threads

[goodgrief] 28/2/2019 12:57

Didn't think you'd come up with anything useful. Just a lazy moaner....

[juju44] 28/2/2019 12:47

They are so far off the current gold price with this stupid hedge its ridiculous

[338] 28/2/2019 12:43

Redtrend, don't forget to mention CMCL...

[338] 28/2/2019 12:42

What is the “Loss on non-hedge derivatives and other commodity contracts” for $1,259,00 (2018) comparing to $1,623,000 (2017)?

Revenue in 2018 was $103.8m


So, assuming this year revenue is up to $115.8m and loss on hedging is $2.8m
The net income will still increase by $10.5m, which double the profit after tax

[jc2706] 28/2/2019 12:34

They haven't got the hedge wrong. The hedge was an insurance to make sure that they could pay back the loans that are due in the next few months. Personally I like a business that plans rather than gambles on the long term future of the company.

[redtrend] 28/2/2019 12:25

Plenty doing worse over the past 3 months too (CEY, AAZ, GAL, GUY (if you follow TSX))

[goodgrief] 28/2/2019 12:25

I'll be happy for you to list them...

[juju44] 28/2/2019 12:22

Plenty doing better than this over past 3 months as gold has climbed

[redhill] 28/2/2019 12:21

JC2706

Its a commission they pay to rollover it over.

[goodgrief] 28/2/2019 12:12

There aren't (m)any gold shares doing particularly well, hedged or unhedged!

[juju44] 28/2/2019 12:06

They got the hedge wrong and it is hurting the share price

[338] 28/2/2019 11:25

No point to rollover when PoG keeps going up

[jc2706] 28/2/2019 10:55

I would be interested in knowing how much "minimal cost" is. Clearly it is less than $100/oz.

[redtrend] 28/2/2019 10:35

At present the gold spot is $100 more than the hedge. By rolling it over there is minimal cost, but if they have production of 7,000 Oz in Jan for example, they get an additional $700,000 revenue for month of Jan.

At some point of course they have to close out the hedge and accept that the 45,000 Oz of gold will be "sold" at $1,230.

If gold later goes up to $1,400, then it was "bad" to rollover the hedge to secure the current spot. If gold goes down to $1,280 (for example), it was a good thing roll-over the hedge and get the benefit of today's spot price. For now we obviously don't have the benefit of hindsight and I personally think they should get the spot price now, as I'm not convinced gold can push materially higher for now. But I would love to be proved wrong and in long-term gold going up is good for SHG.

[redhill] 28/2/2019 10:07

That's rubbish ag.

They pay an admin fee to roll it over but its rolled over at the original price.

[jc2706] 28/2/2019 09:18

Well, if it did there would be no point in deferring the hedge. I suspect that it is nowhere near that but you would also suspect that the cost increased the longer it was deferred. It would be interesting to understand the cost of this.

[qs99] 28/2/2019 09:13

Agreed JC as My post above mentioned at a headline level they do say that this can be rolled forward. I hope they have done so! the cost surely can't outweigh a near $100 per oz increase in gold price? DYOR etc.

[jc2706] 28/2/2019 09:00

Some interesting stuff in there based on a cursory read. One thing I was looking out for was some indication that their hedge really can be deferred to take advantage of higher gold prices. This extract seems to indicate that this is the case:

"....as at the end of December 2018, the Company had sold forward 45,000 oz of gold at an average price US$1,230/oz.... the total forward sales commitments at the end of January 2019 (2017: March 2018) remained at 45,000 oz (2017: 17,600 oz) at an average price of US$1,230/oz (2017: US$1,287/oz)."

So the position remained the same at the end of January. Whilst I have no idea how much deferring would cost, and I suspect that there is some form cost, clearly this is outweighed by the benefits of doing so, so we should be able to take advantage of at least a portion of the increase in gold price. The Q1 update should confirm to what extent.

[redhill] 28/2/2019 08:55

Actually the final results last year came out on 16th April.

[tsmith2] 28/2/2019 08:37

What's wrong with that??

[338] 28/2/2019 08:34

AISC calculation is also clear... AG mixed it up with underground costs. .. lol



(1) All In Sustaining Costs ("AISC") do not include development costs from the Bauhinia Creek, Luika and Ilunga underground operations.

[338] 28/2/2019 08:33

No more ambiguity on Exim loan... AG can't talk sh*t anymore about this loan




-- Exim loan refinanced, new US$10 m facility includes a grace period on principal repayments until September 2019; and,

-- No further amounts have been drawn down the new facility, aside from the principal balance that was otherwise outstanding at the time of refinancing.

[qs99] 28/2/2019 08:22

yes I think you are right RH. If they get the c.hundreds of millions from Barrick, maybe they are linking that to repaying VAT from foreign companies? DYOR