Shanta Gold Share Discussion Threads

[andy] 25/5/2020 13:57

kenny / Redhill,


Many thanks indeed for your posts, very informative indeed.

[redhill] 25/5/2020 09:23

Andy


As of 20/4 there were 27304 oz of gold hedged at $1247 an oz and this is expected to be cleared by or before year end.

This was a condition of some borrowing previously undertaken.

[kennyp52] 25/5/2020 09:20

Hedge .. looks great that they have been selling the hedge at $1244 with POG over $1700!

Hedging
As of the end of the year, the Company had sold forward 40,000 oz to June 2020 at an average price of US$1,244/oz. These forward sales were entered into during late 2018 and were considered prudent given the Company's contractual debt repayments through to June 2020, with the gold price presenting an asymmetric risk in the event of a decline.
The Company has the flexibility to defer settlement of forward sales and, with the exception of settling forward sales for 5,000 oz, had full exposure to the spot gold price during 2019. Despite growth in the gold spot price since the end of 2018, which benefitted Shanta significantly, having forward sales in place throughout the year enabled the Company to invest in its operations in the knowledge that short-term cashflows are protected, in advance of US$17.6 million of contractual debt repayments scheduled for the first six months of 2020.
Post year-end, the total forward sales commitment at the end of January 2020 was 37,000 oz at an average price of US$1,244/oz.

[kennyp52] 25/5/2020 09:16

Andy .. there is this also which the company includes in its accounts as recoverable in full ...

VAT refunds
Outstanding VAT refunds are a headwind for the Company, however there were several breakthroughs in 2019 which could suggest the re-emergence of timely refunds. The Company's VAT receivable amounted to US$21.9 million at the end of the year, largely unchanged from its position at the end of 2018. This was achieved following welcome cash refunds of US$2.7 million in the year, with an additional US$4.8 million of the receivable balance offset against corporate taxes falling due. The Group exports doré bars which is not considered to be a raw mineral and therefore not deemed to be an exempt supply under the amended VAT Act 2014 brought into effect in July 2017, making Shanta eligible for VAT refunds.

[juju44] 25/5/2020 09:09

Hazel that’s still my view

[andy] 25/5/2020 09:04

Does anyone here have the details for the hedge please?


Or a link to where I can read up about it?


Shanta look undervalued, there has to be a reason, so I guess it's the hedge. Hedges are never popular with gold bugs because they are optimistic by nature, but they can be useful when the gold price falls.

[redhill] 24/5/2020 11:32

hazl

LOL

[hazl] 24/5/2020 09:21

I dont think its just women!

[redhill] 24/5/2020 08:41

I know a few women with a double bottom !

[c0lin1] 23/5/2020 18:06

Sorry i misunderstood your previous post

[chestnuts] 23/5/2020 17:44

This chart shows a double bottom you can see the target


free stock charts from uk.advfn.com


This chart shows a bigger double bottom


free stock charts from uk.advfn.com

[shieldbug] 23/5/2020 15:16

If the mine closes you lose production for a time. AISC would immediately rise. If cost increase as a result, again AISC rise. Combined with a weak gold price you have profit compression from both ends. And then you cannot cover costs.

[c0lin1] 23/5/2020 13:52

How is a hedge also a hedge against costs or mine closures? If the mine closes you still have to produce the gold.

[risa5] 23/5/2020 13:35

The hedge would have been good if it had a ceiling, many millions have been lost consequently and it has not allowed the share price to go past 12p even with gold over $1700.

The board have now realised it was a mistake and want to get rid of it asap.

Anyway we are where we are Kenya acquisition when completed in June should create a lot of interest.

[shieldbug] 23/5/2020 12:25

Retrospectively criticising the hedge is idiotic. It is not just a hedge against the price of gold falling to a level where the company cannot cover interest payments. Its also a hedge against costs rising.

Mining is a risky business. An accident in the mine could result in closure, increased costs when it started up again and could permanently reduce production levels.

Gold price flying and lack of accidents or other disasters are not proof that the hedge wasn't needed.

Bravo to the company for hedging. They are doing their job in attempting to protect our investments from permanent loss of capital.

[hazl] 23/5/2020 07:46

I will just add that I have no idea what will happen here short term. 8-)

[hazl] 23/5/2020 07:05

A little reminder of Juju's earlier post.....

'juju44'18 May '20 - 09:16 - 33611 of 33698
0 1 0
gold price is the key . We should see it over 2000$ over the next year and Shanta ( less hedge )around 40p '

[coachsailor] 23/5/2020 00:43

I am a long time holder of Shanta. A year ago, with a hoped for rise in gold price I learnt that the hedge would limit the relative gain, so bought shares in Wheaton Precious Metals who provide the streaming or hedge to miners. A sort of reverse hedge on the mining portfolio

[redhill] 22/5/2020 19:40

Lombiff

If its any consolation i had a figure of £1 a share at that time. I'm certainly not ruling it out now if gold continues to rise but they need to buy back some of these shares.

Good Luck

Red

[lowtrawler] 22/5/2020 18:31

Many thanks andyp and goodgrief

[alangriffbang] 22/5/2020 18:07

2030 ,I fear ,

[plentymorefish] 22/5/2020 17:46

What year?.....

[space_bob] 22/5/2020 17:45

I put the rest of my cash reserves in today when the share price dipped. I'm expecting the share price to be at least 20p by the end of July.

[juju44] 22/5/2020 17:05

Did they hedge with some of their buddies