Shanta Gold Share Discussion Threads

[jc2706] 18/7/2019 10:02

I agree QS99, although I would expect in the event of a global stock market sell off that all companies would be impacted even if gold miners subsequently recovered first and to a greater extent.

[jc2706] 18/7/2019 09:59

Whilst the company remains optimistic about recovering the VAT I think it prudent to consider the performance on the basis of this not being recovered and for the VAT to continue to be withheld. Even without it the company is generating cash and paying down debt which should accelerate from here as interest payments reduce and the price of gold remains supportive (the current gold price is $100/oz more than the average for Q2 which, projected for annual production of 80k oz, would mean an additional $8m). However, such a situation would necessitate a risk discount for the company which is why repayment of the VAT would positively impact the share price in many ways.

You have to wonder whether the country actually understands the impact of withholding VAT repayments on investment. I find it difficult to believe that they don't so clearly the short term considerations are considered more significant than the long term.

[qs99] 18/7/2019 09:54

thanks JC. Agreed, but ECB looks like it may cut rates, $ is weak and Fed signalling cutting rates IMO, DYOR etc, all positive for gold. Likewise new market highs is worrying, any sell off on markets should IMO see POG head higher as well. as suppliers dwindle, demand increases, in theory this should be a virtuous circle!

SHG should therefore benefit massively from this. I think the political risk is outweighing the commercial logic for many. Typical Africa in so many ways unfortunately. DYOR

[jc2706] 18/7/2019 08:29

A decent, without being outstanding, production update. Language in the RNS suggests that this was slightly lower than hoped due to the head grade, offset by the very high throughput. The head grade needs to be watched but it would be a surprise if grade control was not on top of this as this has traditionally proved to be a strength.

I am slightly surprised that they didn't go for a higher production by reducing the ROM material content but it would appear that they were happy covering the debt repayments, which totalled $8.6m, from cash generation and cash on hand (which has reduced substantially as a result). As debt reduces interest payments naturally reduce as well so debt repayments decrease further.

With the gold price where it is and the fact that they can roll over the hedge, a similar production performance for this quarter would provide an extra $2m into the coffers. Even if the gold price collapsed to below the hedge the average gold price for the quarter would be similar to Q2 so the performance for the next quarter is virtually baked in already (OK, they have to deliver operationally but this has not been an issue of late).

[qs99] 18/7/2019 07:39

Yup, the more they continue to deliver, the more I believe we could get there eventually 338!!

[338] 18/7/2019 07:28

AG, see you at 45p...

[deanmatlazin] 18/7/2019 07:24

We are going in the right direction. Hopefully will be debt free by end of next year and company will pay us dividend

[deanmatlazin] 18/7/2019 07:22

Gross debt down 22% to US$30.1 m (Q1: US$38.7 million ("m")) following US$4.9 m partial buyback of outstanding convertible loan notes;

[qs99] 18/7/2019 07:19

nice statement re deferral if necessary of hedge.....all in all, with a fair wind, continued delivery, some bleeding movement on VAT, and why not multi-bag from here?

[hazl] 18/7/2019 07:15

'Shanta has completed the transition to one of the least geared U.K. listed gold producers. The company moves into H2 with a strong balance sheet, strong operations, an increasingly attractive orebody and exciting upcoming catalysts."

AISC good.
A generally pleasing announcement.

IMO

[qs99] 18/7/2019 07:10

Well that is a pretty good update IMO. Net debt now below $30m and falling. VAT equal to net debt, continued replenishment of mine life and IMO the tone of this suggests more to come. POG motoring. Continuing to hold, VAT resolution will IMO see this share multi-bag....why don't TNZ Govt hedge by taking a stake?!!! anyway, DYOR and roll on much higher SP

[trader365] 17/7/2019 20:53

16.88 trading days, what do I win?

[redhill] 17/7/2019 17:01

Gold up nicely today.Profit taking ahead of tomorrows figures .Acacia now under big pressure to agree a deal with the effective closure of its North Mara mine.

[juju44] 17/7/2019 16:51

And look at gold explode

[qs99] 17/7/2019 15:45

sickly share price again

[jasper2712] 16/7/2019 14:41

I am not talking about Shanta going it alone. A collective assault on the TZ government is needed . What they are doing must be illegal - take them on it a court.

[jc2706] 16/7/2019 13:06

Easy to say, not so easy to do. They cannot unilaterally just start offsetting VAT against corporation taxes as that is a recipe for finding themselves on the end of litigation and punitive fines and I am not sure that the legal system is particularly robust in Tanzania. Of course they can do this if given permission to do so but not until.

As for pressure that needs to be applied, Acacia got a bloody nose and are a much larger company. I am not sure what more pressure you believe that Shanta can apply against a national government.

[jasper2712] 16/7/2019 13:00

This company would have $20m more in cash if they had not been mugged by the TZ government. Again we wait for forthcoming news on the VAT and nothing transpires. This has been the case for at least 2 years now - surely there must be some progress. Why can't they offset the payment against the royalties/income tax?

More pressure needs to be applied as it has gone on long enough.

[redhill] 16/7/2019 12:25

Yes but most holders on here are looking forward to the next 4 years after all the hardwork put in over the previous years to get to where we are today.