Shanta Gold Share Discussion Threads

[redhill] 20/4/2020 16:30

Yes that interview is on twitter plus the presentation is up on the web site now.

[qs99] 20/4/2020 16:24

cracking interview, thanks for sharing.

talks of spot price today generating $80m EBITDA and is obviously still v. frustrated with the current share price.

2 weeks reserves update for Singita he said

75 days ish, Investec will no longer be a secured lender....first time in SHG history, roll on that day.....

v.v.v.v.v. excited about the acquisition

All in all, may have to revisit 338's £1.50 view haha....

May have to throw some more into SHG given that interview, very positive. DYOR

[risa5] 20/4/2020 16:22

Shanta reports improved EBITDA for Q1 but hedge book well out of the money

SHANTA Gold posted first quarter earnings before interest, tax, depreciation and amortisation (EBITDA) of $15m compared to $8.6m in the previous quarter after adjusting for the non cash effects of out of the money hedge book.

The company sold 20,086 ounces of gold in the period at an average price of $1,414/oz compared to an average spot price of $1,582/oz. This included the settlement of 8,735 oz of forward sales commitments, the company said.

As of March 31, Shanta Gold had sold forward 31,265 oz to January 2021 at an average price of $1,247/oz. The gold price is currently trading at about $1,682/oz.

Since quarter end, total forward sales commitments have been further reduced to 27,304 oz, a 32% reduction from forward sales commitments in place at the end of 2019, the company said.

CEO, Eric Zurrin, chose to focus on the firm’s acquisition of Kenyan projects from Barrick Gold for $15m in cash and shares. The transaction, which is due to close mid-year, would transform Shanta Gold into a “… multi-asset and geographically diversified company”, Zurrin said. It had the potential to become “a significant producer”.

Shanta reiterated production guidance for 2020 of 80,000 to 85,000 oz at an all-in sustaining cost of $830 to $880/oz. The company produced 84,506 oz in gold last year which just about exceeded guidance of between 80,000 to 84,000 oz.

There had been no cases of COVID-19 in the Songwe region in Tanzania where Shanta Gold operates. Nonetheless, the company had been an “early adopter” of measures aimed at countering the disease.

Significant progress in outstanding VAT refunds from the Tanzanian government was not forthcoming during the period. VAT receivables increased to $22.9m from $21.8m in the previous quarter although there was a $700,000 refund which was offset against corporate taxes, the company said.

Shanta’s net debt increased slightly to $15.1m from $14.3m at the close of the previous quarter. However, the end March net debt number excluded $15.1m in bullion that was available for sale. Cash as of March 31 was $5.3m, up from $3.5m in the fourth quarter.

Shanta said it had extended the maturity date of outstanding convertible notes to April 2021 although they could be redeemed earlier.

[risa5] 20/4/2020 16:12

Interview EZ

Andrew Scott
13:10 Mon 20 Apr 2020

Shanta Gold reiterates full year guidance while balance sheet's in 'best shape for 7 years'

[redhill] 20/4/2020 15:08

Being quoted 11.30p to buy and 11.33p to sell !

[338] 20/4/2020 12:11

Noted Redhill 👍

[redhill] 20/4/2020 10:50

Good Grief

No they haven't paid for the Kenyan assets yet but are due sometime mid 2020 depending on permits.

[redhill] 20/4/2020 10:48

338

I'm referring to gross debt repayment as opposed to net which looks good.

I'm guessing that a big chunk of interest was added at the start of the year otherwise repayment schedules don't match.

[338] 20/4/2020 10:29

Redhill,

Shanta had over $7.8m of liquidity from bullion for sale. The net debt was calculated without this.

So the actual net position was better than in the report

[goodgrief] 20/4/2020 10:03

Didn't they have to cough up $7m for the Kenyan assets?

[redhill] 20/4/2020 09:37

I'm surprised Gross debt only reduced $1.6 million when repayments surely would have been between $2 and $3 million at least.

As usual the presentation should provide additional useful information.

[qs99] 20/4/2020 09:32

well the hedge is about to go sub 20k so a quarter's produciton, then we are fully operationally geared to price of gold....DYOR, but think the market has this way wrong...DYOR

[juju44] 20/4/2020 09:04

Shanta rarely goes up on announcements , no matter how good. The bloody hedge is a noose . We will see

[qs99] 20/4/2020 08:19

£1.50 will see me retire mate if hit I can tell you....!

[338] 20/4/2020 08:04

Impact of hedging to average selling price earning by SHG was $168 per oz, that's good

[338] 20/4/2020 08:02

QS99,

My new price target will be £1.50 when we see an indication that the mining in Kenya can produce 100,000 oz annually

[qs99] 20/4/2020 07:56

c.$15m Adjusted EBITDA
Gross debt c.$20m
27,305 forward sales now post period end approaching less than 30$ of annual sales so will benefit more and more from POG
average realised gold price Q1 of $1,414, wow, so EBITDA based on that average, imagine chucking another $200 onto the average?
With exploration upside....

338 you may have to revisit your target price mate!

DYOR

[wimbled] 20/4/2020 07:52

Yep looking good for breakout.

[qs99] 20/4/2020 07:48

Look very good but then I am biased.

will need time to read/digest properly, but £90m market cap for company with these prospects delivering this EBITDA? Nuts IMO and all helps get towards 338's 48p target!!

DYOR

[chestnuts] 20/4/2020 07:25

Results are out and look very good

[bahiflyer] 20/4/2020 07:24

Top notch update by a completely professional outfit.
West Kenya going ahead with over 1Moz @ 12g/t au. The value of gold in the ground at current prices is clearly not reflected in SHG current share price
Wont be like that for long though.

[qs99] 16/4/2020 13:02

indeed, expect SHG to turn blue later today IMO...let's see

[338] 16/4/2020 12:56

PoG is up... MM's enjoying good game

[12strings] 16/4/2020 09:15

@ space_bob

Agreed, it's getting much much harder and one day it will all fold. That will be catastrophic, and the fall out will last for years. Imagine the failure of $300T financial derivatives causing a total melt down. We think the present crisis is disruptive! Emerging from the mess will be a new global monetary system of which gold may or may not play a part.

In the meantime, we play our hunches and IMO everything that could be done to delay the final financial demise, will be done. Until there is absolutely nothing else to try.

[kennyp52] 16/4/2020 09:08

338 ...

With unprecedented global demand for physical gold, Hummingbird's unique SMO coins have sold out; however, with stable supply from Yanfolila and the continued ability to mint coins at Stephen Betts and Sons Limited, the Company is well placed to supply this increased demand and realise extra value on top of the increasing gold price through enhanced margins.

They make extra margin from minting coins so presumably they will be knocking out coins left , right and centre as we type and turning it into cash .