Shanta Gold Share Discussion Threads

[redhill] 29/11/2019 20:04

Whether we like Eric's smile or not he has done a bloody good job in turning this Company around. next year the majority of the debt will be repaid and any refund of VAT will just be the icing on the cake.

Any comparison with 2011 is way off the mark. If my memory serves me correctly gold was hovering around $1800 an oz and there were a lot fewer shares in issue.
Subsequent poor decisions by management and borrowing too much money led the Company to the brink of collapse. We now have the exciting prospect of share buy backs and dividends to look forward to.
This share won't be at this depressed price much longer.

[jasper2712] 29/11/2019 19:47

I do not think he is being dishonest - he just is not telling it as it is - warts and all. The VAT is seen as no longer a concern - whereas it is a major concern, a retrace of 44000oz was never mentioned even although the mine life was extended
What we want is complete honesty and total information- he is not running for parliament after all! Also cut out the smile , it didn't work for Blair and we all know what he turned out to be.

[jc2706] 29/11/2019 19:34

Ah, the ghost of posters past!

[goodgrief] 29/11/2019 17:37

Bet you've still gor Crittal windows!?

[trader365] 29/11/2019 17:32

At 32 seconds into the video posted by roguetreader Zurrin comes across as being surprised by the reserve increase, and with a big false smile he makes a big deal of it for the cameras. "we did it, we extended the mine life, good news!!".

Then the VAT refund: "against the odds nobody believed we would get it". again, he talks about it with his with his false salesman smile.

I don't trust Zurrin, he reminds me of the double glazing salesmen of the 80's.

[jasper2712] 29/11/2019 13:49

KENNYP52
My sentiments exactly. The hedge was a mistake but this is said with hindsight which is a wonderful thing if it proves an argument right. They were right to hedge to protect their payments but they were over cautious and it has cost them.
The VAT continues to grow and Eric Zurin keeps spouting the same old,same old. How many times has he been interviewed and led shareholders to believe that payback was imminent. This has been ongoing for nearly 3 years now and could have sent many a company to the wall- fortunately the mine grades has been high enough to maintain the 80000 oz/year.
The last time I saw him he even seemed to take credit that he foretold that the VAT would be resolved once Barrick had bailed out Acacia.
There are negatives with this company and the market sees that.
I would like to see Eric a bit more upfront about these issues rather than quoting the EBITA which he is clearly fond of.

[redhill] 29/11/2019 13:45

Tight spread 8.136p-8.20p

[risa5] 29/11/2019 13:10

Kenny this may help



Tip style
SPECULATIVE
Risk rating
HIGH
Timescale
MEDIUM TERM
Our previous tip
We said BUY at 6p on 31 May 2018
Tip performance to date
+53%
By Alex Hamer

Shanta Gold’s (SHG) hedge on the gold price last year knocked it out of profitability in the first half of 2019. The Tanzania-focused miner took a $5.5m (£4.6m) non-cash hit from 45,000 ounces (oz) in hedged sales that could no longer be pushed back; an arrangement put in place at $1,230 an oz last year to make sure $13m in debt repayments could be maintained if the gold price crashed. This saw its operating profit fall from $11.8m a year ago to a loss of $1.6m in the first half of 2019.

SHG:LSE
Shanta Gold Ltd
1mth
Today change
0.00%
Price (GBP)
8.25

Shanta had a stable six months of production at the New Luika gold mine and kept the all-in sustaining cost (AISC) $10 an oz below the low-end full-year guidance of $740 an oz. Full-year production guidance is still 80,000-84,000 oz. The company has also cut its net debt by 15 per cent since the year-end, taking it to $26.9m.
Exploration costs were flat year on year at $800,000. Shanta said it would comfortably replace the 80,000 oz forecast to be taken out of the ground in 2019 by converting inferred resources to indicated resources, which can be included in the mine plan. While Shanta has avoided the difficulties Acacia Mining (ACA) has had in Tanzania, its $25.3m VAT refund figure is a reminder that it’s not the easiest jurisdiction to operate in. It is almost two years since Shanta received its last refund from the government.
Analyst consensus collated by Bloomberg is for full-year adjusted EPS and cash profits (Ebitda) of 1.2¢ and $42m, respectively, rising to 1.9¢ and $49m in 2020.
SHANTA GOLD (SHG)

ORD PRICE:
9p
MARKET VALUE:
£72.4m
TOUCH:
9-9.4p
12-MONTH HIGH:
10p
4p
DIVIDEND YIELD:
na
PE RATIO:
na
NET ASSET VALUE:
12.6¢*
NET DEBT:
63%
Half-year to 30 Jun
Turnover ($m)
Pre-tax profit ($m)
Earnings per share (¢)
Dividend per share (¢)*
2018
49.2
8.4
0.92
nil
2019
53.6
-4.1
-0.73
nil
% change
+9
-
-
-
Ex-div:
na
£1=$1.21 *Includes intangible assets of $23m, or 3¢ a share

IC View

Shanta’s move to a pre-tax loss is full of irony; the non-cash hit from the hedge was only so high because of the very strong gold price. The company has a good production outlook, consistent costs and falling net debt while gold is above $1,500 an oz. Buy.
Last IC View: Buy, 8.2p, 24 Jul 2019

[roguetreader] 29/11/2019 10:34

Chip
just realised the incongruity of my post above; I actually didn't know Eric Zurrin was going to be there, I spotted the vid via twitter, but to be honest a trip up to London to M&M would need a number of people of interest to me to make the trip. I'm tending to get lazy as I get older.
RT

[kennyp52] 29/11/2019 10:08

REDHILL ... correct ... I have developed doubt as the share price dropped after all of the positivity on this board had got us all hopeful . I have never changed my position on the hedge .. a necessary evil to keep the business afloat you say .... but it has cost substantial millions ( £5m reserve in last RNS ) in hind sight and cost the shareholders . That is a fact and my main concern is that it would appear the directors put no ceiling price on the hedge to limit their liability . In my opinion they have just given the rise in POG away . VAT ... this is a small fortune . 2 small repayments from memory to date . Why would anyone believe this will ever be repaid in full ? If there is any doubt then a provision should be provided ... so either the directors are 100% confident ... in which case how / when ... or they are misleading us all . Either way it causes significant doubt around this company . Otherwise IMHO this share price would be comfortably into double digits .

[fitton] 29/11/2019 09:35

Great potential here.Heading for being debt free in 2020.Vat refund is very possible.Share price could well double from here over the next 6 months or so.

[roguetreader] 28/11/2019 12:16

Hi Chip
No didn't go to Mines & Money. A couple of interesting names there and could have been tempted if in addition there had been any CEO's / Directors of companies speaking where I'm currently either active or interested.
RT

[chipperfrd] 28/11/2019 11:24

Thanks RT, good find.
Did you get to Mines & Money?
I used to try and make it every year but not this year I'm afraid.
Chip

[qs99] 28/11/2019 10:33

not often we see a 5% uptick. Nice to see at least!

[redhill] 28/11/2019 10:23

kennyp52

It wasn't difficult to spot your change of position. One moment very positive and then a switch to negativity.
The hedge was a necessity at the time as is being slowly worked down.
I wouldn't wait too long before jumping back in.

[sleveen] 28/11/2019 09:48

I bought 40k this am.

Good recovery prospects IMV.

[imnotspartacus] 28/11/2019 06:51

Net debt improvement in Q4 sounds good. When the debt is gone & the divi's start the share price won't be 8p, until then it's a waiting game. Good find.

[nielsc] 28/11/2019 06:48

Very upbeat. Next year should be interesting - hopefully see our patience rewarded.Would be great to see more VAT refunds - will have to wait and see on that one.Cheers,Niels

[redhill] 27/11/2019 12:07

Good find roguetreader.

[roguetreader] 27/11/2019 08:10

Update from Eric Zurrin:

[qs99] 26/11/2019 10:27

I agree with REdhill, no sane management would write off VAT given the signal of "don't worry about paying it" it would send to govt.

Either govt want to look for international inward investment, or they don't....will it be same old Africa, or new forward looking internationally recognised Africa?