Shanta Gold Share Discussion Threads

[redtrend] 28/2/2019 19:28

QS99 - thanks for your additional comments and I should add I agree with many of your points:

1. SHG should be able to refinance particularly the 10m loan notes in April 2020, if they still at this point had not received VAT rebates. I guess my over arching point is that for 2019 SHG should not need to, if gold spot holds up (although is tight at lower end of guidance & if gold spot falls).

2. The RNS intro is very positive on VAT rebates and Redhill covered this so I didn't mention it again. If you look through the Accounts, the auditors also mention the VAT rebates extensively and in their due diligence reference correspondence between SHG and the Tanz Revenue Authority (TRA) that satisfied them to keep all VAT in receivables, current assets.

SHG have good form with both Exim and Loan Note holders for refinancing, so I'm not overly worried. As I say, just trying to "stress test" for a marker in the sand. $1,280 wasn't a magic number per se, it was just below current spot price now and with the hedges we have at $1,230 and current spot, could end up being "most likely" avg. Gold spot for 2019.

The 3.5m is my conservative estimate on the interest payable on the total gross debt itself. SHG paid some 4.5m in interest on debt in 2018. But of course we now have 12m less debt than we did in 2018 and come April we pay off 5m of the higher interest bearing loan notes. So interest payments on debt will be lot less in 2019 than it was in 2018.

Interest payments are not included in AISC so like Capex needs to be deducted from EBITDA to reach a true reflection of potential free cashflow

[redhill] 28/2/2019 19:05

Redtrend

I'm sure you are probably right and in the UK that would work out fine.

QS99

Yes i think you are correct about the VAT refund being linked to the Barrick settlement otherwise why would EZ mention it.

Regarding refinancing ,i guess that maybe an option but the Company want to pay down debt ASAP.

[qs99] 28/2/2019 18:54

1 why can they not re-finance any debt should they wish? Paying off ALL debt is maybe a push without the VAT? IF they do however, then they are capitalised at 1 year's EBITDA roughly....
2 if $1,280 is the magic number why not hedge the entire year at today's price?
3 interest on debt, is that $3.5m on reducing debt?
4 Capex should in theory if exploration right prove up more reserves for future, but also bring it nearer 100k production, helping with 1 above?
5 talked of a new co to help with the new developments to co-fund....again should be positive
6 VAT rebate, maybe they've been told that if Barrick sort their sh&t out, that that money will be used to refund SHG and the like?

none of above being critical, very much appreciate you taking time to calculate REdtrend mate, thanks.

[redtrend] 28/2/2019 18:54

It's my understanding the Capex costs exclude VAT, on basis the VAT costs form part of the receivables and are not considered "capitalised" costs that can be depreciated over time for tax calculation purposes (on very basis they're rebated... eventually!).

I believe how SHG forecast and state Capex is also on this accounting basis, but I could be wrong.

Perhaps something to clarify with SHG.

[redhill] 28/2/2019 18:21

Redtrend

Are you not including VAT twice, ie $6m as this will be included in the cost of Capex
$16 m ?

[hiraniha] 28/2/2019 16:46

I got back in at 4.9 after selling at 5.5 earlier last month.

Figures announced today are reassuring.

Happy to hold for the longer term now.

[jc2706] 28/2/2019 16:21

Yes. I was thinking the same!

[boraki] 28/2/2019 16:12

Maybe one has sold some

[tsmith2] 28/2/2019 16:11

Good to see management taking bonuses all in shares

[jc2706] 28/2/2019 15:11

I suspect that this reflects bored and nervous investors for want of a better term (not trying to be judgemental, I just can't think of a better term!). When the share price doesn't react in the way in which investors think it should they tend to think that there are better opportunities elsewhere or there is something that some investors know that they don't. This leads to selling which reinforces the view. I suspect that you can add into this equation that some may have a stop loss at 5p.

[juju44] 28/2/2019 14:35

Yep . Punters heading for greener pastures among other miners

[redhill] 28/2/2019 14:24

There have been some large sells going through lately and that has depressed the price.

[redhill] 28/2/2019 14:23

Actually juju gold is falling !

[juju44] 28/2/2019 14:19

Come on , I thought all you guys had all the answers .Punters taking their bets elsewhere as no excitement here with rising gold

[boraki] 28/2/2019 14:06

Nope me too

[qs99] 28/2/2019 13:57

Why would you sell into this I just don't get it....

[boraki] 28/2/2019 13:51

Some weird trades going through,

Bid 5 and ask 5p also.

[boraki] 28/2/2019 13:47

2,000,000 sell at 5p at 13.26pm

Why oh, why

[chipperfrd] 28/2/2019 13:35

juju,

Their hedging worked fine when gold was dropping down to c. US$1180/oz over the course of 2018 and taking averages over multiple years they have massively reduced the risks of PoG volatility impacting their debt repayments.

Perhaps instead of constantly moaning about their hedging during PoG uptrends you could challenge the criminal management of PM pricing by the vast volumes of naked paper shorting on the Comex and LBMA. If the PM 'market' was not subject to such gross manipulation, miners like SHG would probably have less need to hedge against PoG volatility.
Chip

[juju44] 28/2/2019 13:19

Each to their own

[338] 28/2/2019 13:14

The hedge period was only up to June, I think... So only 4 more months with remaining volume around 25,000 oz?

[boraki] 28/2/2019 13:01

JC2706, post 28771

"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."


Spot on JC, they are a prudent company at the moment, and are not gambling with shareholders funds.

Because of this, they will turn the corner soon, imho.

Good luck all