Trans-siberian Gold Share Discussion Threads

[creme de menthe] 29/1/2020 10:18

I think it is a bit too soon to buy in or average down in my case. When the yield gets to around 5.5% might be the time.
This would provide a bit of a cushion at least.
Of course gold rising would help but I do not see gold storming ahead until we see widespread talk of global recession and that is not happening at the moment.

[1tarquin] 29/1/2020 10:17

Share price was high 80's just before the mineral resource update

"If the gold price had been $1300/oz then what happened in q4 would have been close to a disaster"

But instead it was significantly higher so not a concern

[casual47] 29/1/2020 10:06

The shareprice in December 2018 was in the 30s...

[1tarquin] 29/1/2020 10:05

That is all old news and priced in.

"we will be spending a lot of our cash just so we can start to get back to where we were in December 2018"

I'd be quite happy if they spend a few million of cash to get back to where they were because then the share price will also return to where it was giving me a nice return on my investment.

[casual47] 29/1/2020 10:03

If the gold price had been $1300/oz then what happened in q4 would have been close to a disaster.

[novicetrade68] 29/1/2020 10:03

True, but I think that is also reflected in the share price As Mick mentions minimum of $3m div still to be returned to shareholders every year $2.60 cents or 2.20p per share, guidance looks solid and capital now going to be allocated to keep production stable, so at 120p TSG would look expensive, but at 49p imo certainly not, alas have been buying here yesterday and today, gold miners in general not really moving across the FTSE atm, I think when they're due a next run TSG will follow suit ;)

[casual47] 29/1/2020 10:00

"Doesn't every mining company spends cash on exploration?"

They do. They did in 2019 and ended up with 240k oz fewer than when they started. They are now spending cash on exploration just to *begin to* catch up to where they were in December 2018. It seems unlikely they will catch up this year.

The collapse basically means that everything has been pushed back by at least a year.

2020 should have been the year of ramp up but instead there is a lowering of guidance.

[1tarquin] 29/1/2020 09:57

Special dividends...

The Group will continue to pay special dividends at an appropriate time

Loss of resources...

Has already been acknowledged and communicated via it's own RNS. The share price and market cap has priced that in. It's old news.

Cash...

Doesn't every mining company spend cash on exploration?

[casual47] 29/1/2020 09:41

I think it would have been better if they had acknowledged the elephant in the room rather than put a lot of top spin on things. I don't know how they could be "extremely pleased" to lose nearly half of their resources at their only producing mine.

Also this line could have come straight from Comical Ali:
"we are extremely well placed to push forward with our drilling campaign focused on expanding the mineral resource at our flagship asset; the Asacha Gold Mine"

Translation: "we will be spending a lot of our cash just so we can start to get back to where we were in December 2018"

[zangdook] 29/1/2020 09:35

If they're not doing a special dividend they could have said so directly instead of just restating their policy.

[paleje] 29/1/2020 08:02

Jim Mellon said yesterday he expects to see $1700/oz by March.

[mick1909] 29/1/2020 08:00

They are allowing 3 million $ for dividends which equates to 2.2p which is 4.4% yield at 50p a share and that without a special dividend if gold prices keep increasing I'm sure there will be one

[casual47] 29/1/2020 07:59

I guess Q1 is likely to have some knock-on effects from the q4 issues, perhaps carrying the brunt of the guidance reduction, with Q2 and onwards stabilising and in line with 2019?

[kevph] 29/1/2020 07:51

Given what's happened to the share price, this is very far from being a horror story. Sensible and steady as she goes. Don't think the market was expecting a special divi given the noises coming out from the recent RNSs. I hope anyway!

[1tarquin] 29/1/2020 07:45

So the business will continue to generate significant cash and profit in 2020, particularly with the gold bull market we are seeing - allowing it to further strengthen the balance sheet and to invest for the future.

[dvwrd] 29/1/2020 07:20

No special dividend by the look of it money to be used for exploration and strengthening balance sheet although it look like they intend to keep the normal dividend at same level as last year.

[casual47] 29/1/2020 07:15

So a modest reduction in guidance.

2019 gold production guidance of 40,000 - 44,000oz.

2020 gold production of between 38,000 and 42,000 ounces

[doc_oj] 28/1/2020 17:13

i have added a small amount today as well (not at the best price though :( ) - will be looking at adding further if further weakness. seems overdone

[bignads] 28/1/2020 16:36

Just increased my position here for the reason that one should buy when everyone is fearful!

- Sentiment has been knocked by the reduction in resources. This means that investors are looking for the negative in all announcements. Fear is in the ascendancy.

- However, the fundamentals are very strong for this company in that:

*they operate in a relatively geopolitically stable economy that is reliant on resource-companies doing well;
*they are highly profitable and cash generative and can easily service and pay down the minimum levels of debt they raised at cheap rates;
*they have reduced the number of shares in circulation over the last 12 months by 20%, by buying-out shares at a significant discount to today (33p), increasing the EPS figure at a stroke by 1/5th
*they have already had good resource replacement news in the form of recent drilling; and
*they have a whole other gold field nearby that is as yet unexplored.

[casual47] 28/1/2020 15:15

"So if we see resources start to increase again from exploration then the share price and market cap will increase accordingly."

I don't think we will see an update on the resources from Asacha before end of the year.

The forthcoming resources from the exploration/development asset will of course add value but in the medium term they won't count as much as resources from the producing asset.

[casual47] 28/1/2020 15:08

Zangdook, yes all.

But don't forget we are comparing the December 2019 update to the 31st December 2018 resource estimate, so they had a full year of exploration which was supposed to, at a minimum, replace resources depleted during 2019. So *despite* the 2019 drilling season they still lost 240k oz compared to December 2018.

[zangdook] 28/1/2020 14:59

Casual47 - you're making a big play of the mine collapse. What information do we have on this? I note the reference in the resources update. Is there anything else?

casual4728 Jan '20 - 14:11 - 916 of 919
Big, 43% of the gold resource went up in smoke.
-------
Are you including all of these categories to reach 43%? Not all of them are due to mine collapse.

Mining depletion
Sterilisation
Rockfall
Difference due to new data and interpretation
Difference due to revised estimation parameters

[1tarquin] 28/1/2020 14:58

It's worth remembering that when the gold resource was reduced the Market Cap broadly halved to reflect that. So if we see resources start to increase again from exploration then the share price and market cap will increase accordingly.

For me, today's results changed nothing and the sell off is over done - they hit upper end of production guidance (as they said they would do) and the financials reflected that and the strong gold price. We need to see what the 2020 production guidance will be, the new JORC and additional drilling results. Then as investors we can make informed decisions.

We've been told the collapse of the older workings in the main zone mean remnants can no longer be recovered. That to me does not sound a big deal, unless they are keeping material information from the market?

I've asked the company this morning for a bit more context on the reduction in Q4 gold production and that this was a business decision rather than enforced change. I suggest other investors do the same so that we can influence the level of information we are looking for in RNS's rather than just speculating on bulletin boards.

[mick1909] 28/1/2020 14:29

Alot not afoot

[mick1909] 28/1/2020 14:29

Are you invested in this share? As you seem to have afoot of knowledge about this share