Shanta Gold Share Discussion Threads

[juju44] 01/4/2019 08:53

Not hard to do

[redhill] 01/4/2019 08:51

Market Makers at it again this morning trying to walk this back down.

[redhill] 31/3/2019 16:15

You can bash this backwards and forwards all you like but you won't really have any answers until we see the second quarters figures.
The $5 million convertibles will be paid off and half the loan reductions will have been made.

In that time the price of gold could be up or down the same as production.

[redtrend] 31/3/2019 13:21

Lets start-over and forget last bizarre 24hrs never happened...

Let’s assume 2019 is as per 2018 in terms of AISC, gold sales (82,000) and avg. realised Gold Price ($1,260). SHG will have the following free cashflow to pay off debt:

1) $8m Net Debt improved in 2018;
2) $9m unrestricted cash end of 2018;
3) $2m estimate for less Capex spent this year (from $18.2m last year to $16m this. Includes NL capex, Singida and Exploration);
4) $1.5m less interest payments in 2019 considering Gross Debt reductions in 2018 and $5m loan pay-off early this year; and
5) $1.7m paid on “contract liabilities” in 2018 that is now nil, can be used for debt.

TOTAL: USD 22.2m

This assumes no VAT rebates of $22m are returned. With the Singida IPO in Dar, there could be a quid pro quo one hopes.

It also does not take into account production may be on the higher end of guidance and could see circa 85,000 Oz for example (i.e. 3,000 Oz more than 2018, which per Oz push AISC down and bring in another circa $3m)


One of the most recent lies Ag keeps repeating even after Tomrob explicitly pointed it out to him (and then myself) is on Trade Payables. To confirm to everyone, despite what he says, payables did not get worse, it is broadly static:

- In 2017 Accounts, Trade Payables + Contact Liabilities were reported on 1 line as $14m total.

- In 2018 Accounts, Trade Payables + Contact Liabilities are split across 2 lines, but add up to $14.7m

- On face of it, it therefore appears Trade Payables + Contract Liabilities was worse to tune of $0.7m. However the Trade Payables + Accruals sub-line items are static at $8.5m and $3m respectively

- The big difference between the years which is not cashflow but liability, is the increase of gold hedging liability from $0.6m to $2.9m (incl. as sub-line in trade payables). Lets be clear as AG gets mighty confused with double-counting, by assuming an avg. gold price of $1,260 (and therefore taking into account the gold sales hedged at $1,230 already) when gold has been $1,300+, takes this liability into account. Otherwise you’re just double-counting.

- In summary, trade payables + accruals will likely broadly be static at $8.5m and $3m and so does not need to be taken into consideration in above $22.2m, other than contract liabilities paid down.


Notwithstanding this, with SHG’s debt profile of circa $20m in 2019 and $14m in first 4 months of 2020, things are incredibly tight. If VAT rebates aren’t forthcoming, a new loan and/ or placing will be required. Even though it appears SHG is ok for 2019 (subject to production and gold price), with management being conservative they will not want to wait until last minute.

They appear to have very good relationship with Exim (major Tanz Bank) and Exim is expanding its footprint throughout East Africa. I could see Exim forming some role in the IPO and separate to this, potentially providing SHG additional financing for New Luika to cover April 2020 Loan Notes. They can see how little debt SHG will have left in 2020 so can't see them refusing another loan/ re-financing, as risk will be low.

[redtrend] 31/3/2019 13:12

Why are you entertaining him?!

Looks like AG mixed his 2 hobbies of drinking and trolling on here last night as it really was next level batsh*t crazy! Even for AG I've never seen such poor analysis and that's saying a lot.

The bizarre treatment of trade payables and double-counting beggar's belief. Assume he may have sobered up after deleting a later message that initially followed this same completely flawed train of thought.

[redhill] 31/3/2019 12:31

There were various projects at the start of 2018 and development spending on Illunga.
Its very easy to say that they will spend the same as 2018 but in reality they won't.

The only uncertainty at the present time is the repayment of the convertibles in 2020 so i look forward to seeing how the cash balance builds up in the second half of the year.

In fact i would guess at a cash balance at the end of this quarter at about $12 million.

[redhill] 31/3/2019 11:04

The fact is that Shanta generated $31 million of cash last year from operating activities.(Taken from the 2018 accounts )

Assuming the same level for 2019, means they have $31 million plus $9 million cash plus $2.5 facility if required.
So in short they have $42.5 million available for loan reductions of $18 million plus $5 million of convertible loan notes.

Yes some of the surplus needs to be spent on development and exploration and on interest payments. They can however cut their cloth according to their needs.

[nav_mike] 31/3/2019 10:49

Look - your original premise was based on an incorrect figure, so you're now shuffling the cards around to try and extend the debate. I have better things to do.

Im invested here, you arent.

Maybe one day, you will have to admit you were wrong, but we both know you will never do that - you will either disappear or find another falsehood to argue endlessly about

[nav_mike] 31/3/2019 08:06

For the record, I am not saying that current year cashflow might not be tight, however that is what they are paid to manage.

[redhill] 30/3/2019 23:15

AG

Are you seriously suggesting that they should reduce their trade debtors to zero by the end of the financial year ?

[nav_mike] 30/3/2019 21:36

You cant use $8.4m profit being "same as last year", when that figure is net of $26.5m non-cash depreciation and amortisation

If you want to you could net off this year projected capex but I bet your supposed $3m deficit would be more than made up

Your are mixing up Balance Sheet and Cash Flow Statement items presumably to suit your own agenda

[redhill] 30/3/2019 19:49

Not sure where you are getting $44.34 million from.

[redhill] 30/3/2019 17:57

Ok i will rephrase that.

They earn enough money to meet debt repayments plus repay the Convertible loan notes of $5 million in the current financial year.

They only need an extra $5million above 2018 's repayments.