Shanta Gold Share Discussion Threads

[imnotspartacus] 21/2/2020 06:42

Gold $1631 who'd a thunk it! It's a global QE armageddon.
I'd be all in if the wife would let me.

[redhill] 20/2/2020 17:59

JC2706

Yes but what do they do when the buying is incessant and they don't have the shares to meet demand ? If they push the price up then they have to cover their sales at a higher price.

[jc2706] 20/2/2020 16:09

Redhill,

They do indeed do that and it is classically referred to as a 'tree shake'. You can tell it is such because the price drops but you cannot buy. They get the shares either by hitting stop losses or by scaring 'weak' holders into selling. However, it doesn't always work! But it isn't the only reason for dropping the price. Price discovery is mainly a means of balancing supply and demand.

[redhill] 20/2/2020 15:26

JC2706

You may well be right but i was told second hand by someone who used to be a Market Maker that they drop the price to get stock in and raise it when they are flush.

They are all in collusion with each other although they are meant to be competing.

[jc2706] 20/2/2020 15:15

juju44,

I certainly never said that we don't have a seller but merely pointed out (obliquely) that we have risen 50% in the last couple of months which isn't bad for a share that is 'dropping'!

[jc2706] 20/2/2020 15:14

Not sure I agree with that Redhill. A steadily dropping price as you have seen is indicative of market makers competing to sell stock by dropping their ask for the stock they have on their books. Of course, they will often manipulate the quoted bid/ask spread to make it appear that there are more buys or sells than there really are but the actual bid/ask tends to be governed by stock availability. This is complicated by the fact that a market maker can short a stock but they will only usually do this when they are confident of the supply/demand balance.

[redhill] 20/2/2020 15:01

juju44


If the Market Makers were flush with stock they would be selling it at the highest price they could to make profit.

[juju44] 20/2/2020 14:49

So no one thinks we have a seller and its all this buying thats curtailing the price . Hmmmmmm

[redhill] 20/2/2020 14:35

Every time you see a buy the next buy is done at a cheaper price and so on.
Trying to create an illusion that the price is falling.

[redhill] 20/2/2020 14:07

Mystery why the MM's have marked down with little selling and large buying.

[juju44] 20/2/2020 12:43

Going down now on my screen

[jc2706] 20/2/2020 12:32

Yes, it's down 50% in the last couple of months....

Oh! Hold on....

[juju44] 20/2/2020 12:22

Big seller getting out - this is down until he is gone

[338] 20/2/2020 12:14

hedged volume has reduced to 40koz in Q4 and will keep reducing every quarter, whilst EBITDA keep increasing

Implying that the impact of hedging is not harmful to revenue and profit growth due to improved operational cost efficiency, VAT refund and slight increase in gold production

should we increase Shanta price target to 60p?

[shieldbug] 20/2/2020 11:20

Surely they held back on the hedge because they were planning the Kenya Gold Project acquisition - they are strengthening the company for the long term at the cost of some short term gains.

[jc2706] 20/2/2020 10:16

The necessity and desirability of the hedge was without doubt. The doubt was the subsequent increase of the hedge to a high level, especially since they indicated at the time that they would be gradually reducing it. I have no idea why they did this.

[kennyp52] 20/2/2020 09:28

Lol.. yes it was connected to the loan that’s why it is a “hedge” and means the gold they are selling now is only cashflow as they have to provide the lender with thousands of ounces of gold to pay off the loan and clear the hedge . If they had been doing this last year it would have been in the 1200s to 1400s ... now it’s potentially costing $1600 an ounce . The accounts are likely to need a huge hedge reserve in again . I think from memory they had to make a £5m reserve at circa $1300 POG but happy for more informed shareholder to correct me .

[fitton] 20/2/2020 09:22

My understanding is that it was a requirement in relation to the loan agreement

[juju44] 20/2/2020 09:21

Sp would be a lot higher without the hedge

[kennyp52] 20/2/2020 09:18

Hmmm .. the hedge ... now costing more and more in lost opportunity profits as POG rises. I don’t think they had any cap on the price which IMO is poor judgement from the board .

[redhill] 20/2/2020 09:02

Without having to make the $10 million loan repayment they should be able to reduce the hedge quicker.

[338] 20/2/2020 08:22

I think Shanta can generate $15 million more EBITDA this year comparing last year

[imnotspartacus] 20/2/2020 08:15

JC

From memory I think they said 8mil per year, so now that should be easy for them.

[338] 20/2/2020 07:58

"much faster and sustainable " future growth 👍