Forum Topics Gold as an investment
Bear77
a month ago

10-Feb-2024: Thought I'd have a look tonight on whether gold HAS been a decent investment over the past 5 years, 3 years and 1 year.

Obviously holding physical gold has provided positive returns:

98293d2dc730481703703cb451f8d61b75d7a3.png

But what I prefer is to have gold exposure via companies that own a lot of gold that is still underground - not yet mined - and I have a strong preference for those gold companies who are already in production rather than those who are just explorers or project developers, because producers have less downside risk generally speaking. Then you can reduce the risk even more by choosing multi-mine owners who are producing gold from 3 or more mines, and even better if those mines are in safe and reliable places, like Australia, New Zealand, North America or Canada. I prefer them to have the majority of (preferably all of) their gold mines right here in Australia.

With that in mind, here's how the main 14 ASX-listed and Australian-headquartered gold companies that I have been following over the past 5 years have fared, from a share price performance perspective:

73db2d5f3f68540f9eb65daa33435fa0188465.png

There are more than 14, but I thought that graph was already too crowded, so I left a few out, more on them in a minute. That graph above is of the 13 main gold producers plus the largest gold project developer in Australia (in terms of market cap) - De Grey Mining DEG), whose market value is currently $2.22 Billion. To give you some perspective on how large that m/cap is, only three of Australia's pure-play gold producers (so not including BHP or Sandfire Resources [SFR] who produce copper with gold as a byproduct; by "pure-play" I mean companies where gold is the main commodity they produce) ...[only 3 Aussie pure-play gold producers] have larger market caps than De Grey (DEG), and those three are Northern Star Resources (NST, currently $15.4 billion), Evolution Mining (EVN, $6.3 billion) and Perseus Mining (PRU, $2.4 billion).

I have not included Newcrest Mining (NCM), who were Australia's largest gold producer up until late last year, because they are no longer listed here since being acquired by New York Stock Exchange-listed Newmont Corporation (a.k.a. Newmont GoldCorp). NEM is the ASX ticker code for Newmont CDIs here but the graph data for NEM only goes back to the NCM acquisition late last year. Believe me, NCM didn't shoot the lights out - they had a fairly ordinary 5 years.

Other than De Grey (DEG), all of those companies in that graph above do produce gold from one or more gold mines, or have part-ownership of at least one gold producing mine in the case of Gold Road Resources (GOR).

De Grey Mining (DEG, +1,220%) and Capricorn Metals (CMM, +1,176%) are WAY above the others in terms of the % increase in their SP over the past 5 years, with Genesis Minerals (GMD) coming in at #3 with a +407% return. Red 5 (RED, +153%) also did well after being smashed in prior years.

It pays to note that Raleigh Finlayson moved from NST to GMD in September/October 2021 when he organised a financial bailout of the struggling company and took over as the Genesis Minerals (GMD) Managing Director (MD) soon afterwards - and you can see above where the GMD SP spiked up and away from the pack at that time, so the GMD outperformance has all come since Raleigh got involved with the company in the latter half of 2021 and then took over as GMD's MD in early 2022. I did a "Valuation" write up on Genesis Minerals here yesterday - click here to read that.

Here's the same 5 year period with the S&P/ASX200 Accumulation (or Total Return) Index (XJO) along with a small handful of gold miners that didn't fit on the chart above:

4ef4e54e18cbf08176d72f9a3385fbbceed81c.png

Firstly, I've just realised that this chart is not over 5 years, it's over 4 years, 6 months, and two weeks, because OBM were in a trading suspension from 20-July-2018 to 28-June-2019, so that's the common starting point for those companies and the index on that graph - 28th June 2019, which is why the ASX200 TR Index (XJO) only shows a +14.95% return when it was actually +26% over 5 years. These returns are NOT per annum returns - they're just simple % returns over each period. That 26% return for the XJO over the full five years is shown on the graph below, with KCN's performance.

In the graph above, West African Resources (WAF) has performed well, mostly in the first 3 years, then falling quite a lot in the most recent year, but still providing a +173% return over 5 years. Calidus (CAI) and Ora Banda (OBM) have taken their shareholders on a rollercoaster ride but OBM has finished higher (+61.67%) due to outperformance in the past 6 months and Calidus has finished down (-51.52%) due to a declining share price over the past 2 years. Pantoro (PNR) is a company I had a small stake in a few years ago, but lately I've just traded small PNR holdings for fun occasionally on Strawman.com and have had no exposure to them in real life. They've had the worst return out of those 5 goldies (-80.95%). Resolute Mining (RSG) was second worst, at -66.33%.

I had forgotten all about KCN - Kingsgate Consolidated until after I'd completed all of these graphs, but here's how KCN's SP has performed over the past 5 years (below). They're a special case because their only producing mine, Chatree, in Thailand, was shut down by the Thai Government a few years ago, and KCN has only been allowed back into Thailand and allowed to restart the mine in recent months. The spike up in the second half of 2021 was on news that the Thai Government were prepared to discuss terms regarding KCN coming back in to run Chatree again, but it took almost 2 more years for KCN to get Chatree back into production, and some punters lost interest in 2023.

534d3f470d2b41817f05e5784458755c6aaf33.png

KCN were trading at around 15 to 17 cents/share 5 years ago, and they're trading at around $1.19 to $1.20 now, so that's why they're showing a +624% return, however 5 years ago they had no mine and no income or cashflow, and they looked like they were going to the wall, so they're not a typical case. I mean they technically owned a mine, but they weren't allowed anywhere near it five years ago.

That black line in the graph above is the S&P/ASX200 TR (total return) Index (XJO) return over the past 5 years.

I'll pop that first 5-year graph back in here again so you can compare the XJO's +26% return (the All Ords Index wasn't much different) to the 14 goldies that I have been following over the past few years:

73db2d5f3f68540f9eb65daa33435fa0188465.png


And here are those same 14 companies over the past 3 years:

688fcd3a38193c2c81e2dedd8720b8d20665f1.png


And here they are over just 1 year - the most recent twelve months:

f64bd31022b64b511b2fdd1a6ae0bafa843ef5.png


Now I somehow managed to make Silver Lake Resources (SLR) and Gold Road Resources (GOR) the same colour (dark green), however that didn't matter much on the one year chart (directly above) because their returns were so close together - GOR was -2.71% and SLR is behind that with -3.60%. On the 5 year chart they were also close, at +78% and +74% respectively, however on the 3 year chart GOR had a positive return of +20.59% and SLR had a negative return of -29.84% - I've marked the SLR dark green line on the 3 year graph, so GOR is the other dark green line on that (3 year) chart above (second one up).

Here are my takeaways from these graphs.

  1. Returns from investing in gold companies can and do vary greatly. Some will give you better returns than ETFs, some much better, others, not so much. Many will lose you money.
  2. St Barbara (SBM) has been a basket case over all three time periods, and I should have sold out sooner than I did. Their best assets are now owned by Genesis Minerals, and what SBM have left is not anything I want exposure to - except for their stakes in other small gold explorers; for example, SBM own 13.4% of Kin Mining, (KIN.asx) and KIN could become a takeover target, but that's nowhere near enough for me to buy any SBM shares again. Regis Resources (RRL) has also been a shocker.
  3. Gold Explorers and Project Developers, like De Grey Mining (DEG) can have volatile share prices, but there can be excellent returns if you get your timing right. DEG has returned -13.98% over 1 year, +35.59% over 3 years, and +1,220% over 5 years, from 9.1 cents/share five years ago to $1.20/share now - so they've done a little better than 10-bagged, they've 12-bagged with some change over 5 years.
  4. Bigger might not always be better. Bigger might be safer, in terms of more downside protection, but the biggest companies have not provided the best returns, as demonstrated in the next (and final) chart for this evening.
  5. Quality Company Management Teams and Quality Projects are the two most important things you need to look for in mining, particularly gold mining, in terms of likely outperformance over future years, based on what I've learned over the past 30, and particularly the last 5.


4b31f3fde202694a0b30d48ad34a91e92a0ca5.png

That chart above also contains Emerald Resources (EMR) which has a lot of ex-RRL (ex-Regis Resources) people there (as does CMM, Capricorn Metals), and I have owned some EMR at various times both here and in one of my real money portfolios. They've gone up by almost +300% over 3 years and by +639% over 5 years, so they've done very well, however the reason why I forgot about them up until a few minutes ago, and why many gold companies do not include them in their peer comparison tables and charts in their presentations is that EMR currently only have one gold producing mine - Okvau - and it is in Cambodia, so in that respect some consider Emerald Resources to be in a class of their own because while Cambodia is certainly considered a risky place to mine, there aren't any other Australian gold miners active in Cambodia so the risks are hard to quantify as there is very little experience to rely on in terms of studying the past to try to predict the future. Emerald has done well, no doubt, but I still consider them very risky because they are mining gold in Cambodia. They've been taking over a company called Bulleye Mining who have two gold projects in WA - their North Laverton project which contains the Bungarra Mine, and their Southern Cross gold project, however that takeover has been dragging on for over two years now, I sh!t you not; there's some stubborn shareholders who refuse to sell, despite the Bulleye Board and management recommending the deal to their shareholders, so Emerald can't get to 90% and move to compulsory acquisition of the remainder. Emerald’s equity position in Bullseye was 78.05% at last notification (on January 25th), but it's been very slow progress with gaining more in recent months. Meanwhile Emerald's MD, Morgan Hart has become the Chairman of the Bullseye Board, and Mark Clements, who is a Non-Executive Director and Company Secretary at Emerald, also has those two roles at Bullseye, so it seems to just be a matter of time. It seems that Emerald have effective control of Bullseye now, they just have a pesky shareholder or two that won't sell at the price they're offering. It's fair to assume that Emerald will be progressing one or both of those two WA gold projects that come with Bullseye Mining, but for now they're considered a Cambodian gold miner.

Anyway, that last graph was about bigger not always being better in terms of capital appreciation or total shareholder returns. Those $2 Billion plus companies aren't going broke, but they may not provide the best returns either. Here's a quick list of those 8 companies with some market caps (from the ASX website tonight) and their 3 year share price returns (as shown above), and a management rating from me - with DK meaning I Don't Know (I'm unfamiliar with their current management), and the other ratings being Rubbish, Poor, OK, Good, Very Good or Excellent.

In order of best 3 year share price return down to worst 3 year share price return:

3-Year Return, Code, Company, Market Cap, Management Rating (IMO):

  • 296.1%, EMR, Emerald Resources, $1.91 Billion, Very Good
  • 153.5%, CMM, Capricorn Metals, $1.69 Billion, Excellent
  • 127.2%, GMD, Genesis Minerals, $1.76 Billion, Excellent
  • 52.7%, RED, Red 5, $1.14 Billion, DK
  • 42.2%, PRU, Perseus Mining, $2.42 Billion, DK (my gut feeling is they must be "Very Good" to have done so well so far - in West Africa - but I don't know much about them)
  • 35.6%, DEG, De Grey Mining, $2.22 Billion, DK
  • 10.0%, NST, Northern Star Resources, $15.36 Billion, Very Good.
  • -33.8%, EVN, Evolution Mining, $6.26 Billion, OK, previously Good. Only one of the eight with a negative share price return over 3 years. Produces a lot of copper now as well as gold. EVN uses copper production byproduct credits to reduce their gold costs down to negative AISC at two of their mines - Ernest Henry and Northparkes - which both produce a lot more copper than gold. This helps mask the high costs at some of their other gold mines.

What we can see there is that the largest companies are down the bottom with the lowest 3-year share price returns, and the mid-sized companies with m/caps between $1.5 and $2 Billion have performed best, and they also have Very Good to Excellent Management teams and high quality gold projects. All 8 of those companies have one or more high quality gold projects, but some of them (like EVN) also have some poor quality mines that detract from their overall performance, usually because of costs that are much too high.

Of those eight I currently hold NST and GMD in my real money portfolios as well as here, and I also hold a small CMM position here, and have held them previously IRL. I have previously held EMR and EVN both here and in my real money portfolios, but not currently.

In terms of emerging gold producers, Bellevue Gold (BGL) looks promising to me, and I recently added some BGL to my SMSF, because the commissioning of their mill has gone smoothly enough and their mill ramp up to nameplate capacity is also on track. They've been around for a few years, but they only poured their first gold in October (2023). Bellevue Gold has a market cap today of $1.51 Billion and I think they've got "Good" management and an excellent project at Bellevue - it will probably be the highest grade gold mine in Australia, but if they don't find more gold there they are probably expensive at current levels, even though their share price has come down a fair way in recent months. I don't rate their management any higher than "Good" because (a) they haven't yet established a track record of good capital allocation and other decisions, and (b) around one year ago they said they had sufficient cash to get through to gold production and wouldn't need to raise any more capital, the share price shot up, and they promptly called for a trading halt and announced a capital raising. That caused me to sell out at the time and I thought their management were "Rubbish", but I've come around over the last 3 months and I'm back onboard with them now. While I like to trust management to tell the truth and do what they say they're going to do, I also would much prefer them to raise capital when their share price is nice and high, not when it has been smashed down low, so I guess I've squared away my concerns somewhat and given them a second chance.

FWIW, as they have been a project developer for most of the past three years and an explorer before that, and they've only been a gold producer for the past 4 months... BGL's share price returns over 1, 3 and 5 years have been +16.5%, +33.2% and +110.5% respectively.

Obviously past performance can not be relied upon as an accurate indicator of future performance, and nothing I say here should be thought of as investment advice because it's not, it's just my thoughts and experiences. Anyway, hope some of this is helpful to somebody. For reference, I'm 58 in a couple of weeks and my risk tolerance used to be a lot higher than it is now. I am a lot more risk-averse than I used to be. Mostly because I don't enjoy losing money. Anyway, time for some ZZZzzzzz's again...

'Nite all!

b297a80bb7c6d4c92ff9958ab4d145b1c701e8.png

11
Bear77
a month ago

05-Feb-2024: Story of the day is: Silver Lake Resources (SLR) and Red 5 (RED) to merge:


c064c381399c08119dd31e5955b9a29e133b2f.png

RED: Red 5 and Silver Lake Resources to Merge

SLR: Red 5 and Silver Lake Resources to Merge

RED: Red 5 Investor Webcast Presentation - Silver Lake Merger

SLR: Presentation - Red 5 and Silver Lake Resources to Merge

Terms:

  • The proposed merger is to be implemented by way of a scheme of arrangement in relation to Silver Lake
  • If the transaction is implemented, Silver Lake shareholders will receive 3.434 new shares in Red 5 for every share of Silver Lake they own

Conditions:

  • The key conditions to implementation of the transaction are customary in nature and include:
  1. ‒ Silver Lake shareholder approval of the scheme of arrangement;
  2. ‒ The Independent Expert issuing an Independent Expert’s Report which concludes that the transaction is in the best interests of Silver Lake shareholders, and the Independent Expert not adversely changing or qualifying its conclusion or withdrawing its report;
  3. ‒ No material adverse change, prescribed occurrence, or regulated event (each as defined in the Scheme Implementation Deed) occurring in respect of either Red 5 or Silver Lake;
  4. ‒ Court approval of the scheme of arrangement; and
  5. ‒ No superior proposal (as defined in the Scheme Implementation Deed) emerging in relation to either Red 5 or Silver Lake
  • The Scheme Implementation Deed includes customary reciprocal deal protection and exclusivity terms, including “no shop”, “no talk”, “notification” and “matching right” obligations and a “fiduciary out” in relation to each of Red 5 and Silver Lake. Reciprocal break fees also apply in certain circumstances
  • Full details of the terms and conditions of the transaction are set out in the Scheme Implementation Deed which has been released to ASX 


Interesting that this is being done via Red 5 acquiring Silver Lake, particularly interesting because based on their last traded prices prior to this announcement, which are Friday's closing prices because this announcement was released before the market opened today (Monday), Silver Lake was a slightly larger company than Red 5, or at least SLR's m/cap was slightly greater than RED's:

  • RED - SOI (shares on issue) = 3,463,800,549
  • SLR - SOI = 934,744,333
  • RED's close Friday: $0.33 x 3,463,800,549 = $1,143,054,181.17, or $1.14 billion.
  • SLR's close Friday: $1.265 x 934,744,333 = $1,182,451,581.24, or $1.18 billion.

However, RED's SP went up one cent today (+3.03%) to $0.34, so their m/cap now (after this announcement) is $1.18 billion

And SLR's SP went down -14.5 cps (-11.46%) to $1.12, so their m/cap is now $1.05 billion, so they were larger than RED on Friday, but they're smaller than RED now.

It's as if they knew the market would react this way, like they're calling it a "Merger of Equals" but the market is saying that RED's getting the best end of the deal and SLR is not, hence the SLR sell-down today while RED rose +3% against a very negative sector move.


5841c1e4e24d96314f6d42ba96cfbabd9d013b.png


RED was one of a very small number of goldies who were NOT in the red today.

Here's some interesting slides from SLR's presentation:

5221c4155f6a379752da865d202435bff2dfdf.png

6b5183a734cfc2662fbd9c86681b7443e6492e.png

The people in the pink blocks above are from RED and those in Blue are from SLR. Even though RED is technically acquiring SLR, SLR's current MD/CEO, Luke Tonkin, and SLR's current CFO, Struan Richards, get to keep their jobs in the merged company. RED's current MD, Mark Williams, does not, and both Mark Williams and RED's current CFO, David Coyne, will leave the company (cease employment) upon the implementation of this scheme. RED's Chairman, Russell Clark is keeping that Chairman role within the merged company. It FEELS like SLR is taking over RED, even though that's not technically the case. Red is actually taking over SLR at a -10.8% discount to SLR's last traded price, according to the Money of Mine (MoM) podcast guys - more on that below the next slide. [I do note that Trav has rounded SLR's last traded price up half a cent to $1.27, so it might be a smidge less than a -10.8% discount.]

f2bb783de2a5008eb9ef25dc2a9e78b98b9373.png

Here's what the MoM boys had to say about it all today in their podcast:


e41a63b5ec10451354e05ae8a374001697fa3b.png

Red5 Dangles the Carrot for Genesis in $2.2Bn Merger with Silver Lake | Daily Mining Show - YouTube

Chapters:

0:00:00 Preview

0:00:00 Introduction

0:01:08 Silver Lake's alternative marketing strategies

0:07:02 Red 5 MERGING with Silver Lake Resources

0:43:00 Potential Lynas and MP Materials merger

0:44:29 Centaurus get Environmental approvals

0:45:09 Silvercorp/Orecorp update

0:45:36 New Copper producer on the ASX


The short version:

The best thing about SLR is their large cash balance. The worst thing about RED is their debt and lack of cash, and to a lesser extent their out-of-the-money hedgebook. Putting the two companies together certainly makes sense for RED, as they need SLR's cash, and SLR will have better prospects to spend their cash on than they appear to have currently - in terms of exploration spending in highly prospective areas. And it will frustrate the hell out of Raleigh Finlayson at Genesis (GMD) who wants Leonora all to himself (or within his company, Genesis Minerals). Luke Tonkin might not have stopped the Gwalia sale from going through (from SBM to GMD), but he might just end up with RED, unless this deal gets trumped by Raleigh/GMD with a better deal.

Matty had some fun with the old film clip to Genesis' "That's All" superimposing Ral's head over the top of Phil Collins - You know the song - "Always the same, it's just a Shame, That's all!" - click here for the 1983 original and click here for Matty's version today.

0c5530629aaf509ba657a2cc1f5699e08ab793.png


Trav has a real good theory on why the deal is structured as SLR being the target and RED being the acquirer, instead of being the other way around, and that is because for Raleigh and GMD to try to block this, he would have to buy a blocking stake in SLR, the target company, which would be very unlikely to appeal to Raleigh, as SLR don't own any assets that he wants, however if they had structured it the OTHER way around, with SLR buying RED, Raleigh could have easily just bought 10% or more of RED to block it, which he probably wouldn't have had much of an issue with because RED owns the KOTH mill which Raleigh has previously wanted within GMD. So - in terms of buying a blocking stake - you have to look at what you then own if the deal falls over, and if this deal announced today did fall over at some point before the scheme implementation date, Raleigh's not going to want to end up with a stake in SLR, ...but he likely wouldn't mind a stake in RED, especially if it helps prevent SLR from gaining control of RED.

The way the deal is structured, if GMD buys up RED shares now, it doesn't have any affect on this deal except for the ability of Raleigh to vote his RED shares against the scheme at the shareholders' meeting, and he wouldn't have enough of a stake to block the scheme going ahead.

So that all makes a LOT of sense. I hold GMD shares, but no RED or SLR shares, so I do have some indirect interest in how this plays out. I'm backing Raleigh to build up Genesis (GMD) into a major player in the Aussie Gold Sector, however I had already figured that would probably be without RED's KOTH (King Of The Hills) gold mill back when SLR bought 11.08% of RED as a "strategic investment" in September. I'm guessing that Ral steps aside and lets this one through to the keeper, but I don't know the man well enough to be confident about that.

However... Trav also points out that it is usual for the target company to have a "fudiciary out" clause built in, in case somebody lobs in a superior offer, but not customary for the acquirer to have one, but in this case, RED (the acquirer of SLR under this scheme) DO have a "fudiciary out" clause, as he discusses in the poddy. And one of the reasons for that is that Gascoyne Resources had a takeover scheme under consideration back in 2021 for Gascoyne to acquire Firefly Resources (not to be confused with FireFly Metals [FFM], the new name for the company formerly known as AuTeco) and then Westgold Resources (WGX) made an offer to acquire Gascoyne and then improved that to an even better offer, but Westgold's offers to acquire Gascoyne were conditional on Gascoyne abandoning it's takeover of Firefly Resources, and Gascoyne didn't have a "out" clause that allowed them to do that, and while Firefly Resources (the target company) DID have an "out" clause, they wanted the deal with Gascoyne to go through obviously. Westgold submitted to the WA Supreme Court - when trying to get orders to delay the Gascoyne-Firefly deal shareholder meetings - that Gascoyne directors were breaching their fiduciary duties by not recommending its 3-for-11 scrip bid despite Gascoyne acknowledging it was superior to its deal with Firefly. [Court nod for Gascoyne-Firefly tie-up | The West Australian 01-Nov-2021] The problem was the Gascoyne directors had not given themselves the ability to do that in the scheme implementation deed that they had signed with Firefly Resources. And that's because it had NOT been customary for the Acquirer in a deal to have an "out" clause built in for the possible eventuality that a better offer emerged for them, it was only customary for the Target company to insist on that clause be in there for them.

In this case the Acquirer (RED) DOES have such a clause (13.8), and Trav points out that both RED's COO and their CFO are ex-Gascoyne:

6513d910f1d6ad2a54689947ea0f7a5fb53904.png

Fool me once...

So the door is open for Raleigh Finlayson's Genesis Minerals (GMD) to lob in a bid for RED directly - to acquire the whole company - as long as it is clearly superior (for RED shareholders) to the current proposed scheme (the merger between SLR and RED where RED are acquiring SLR) and apparently the RED Board fought hard to have that "out" clause included in the scheme (as explained on the conference call today). The fact that RED's current CEO/MD and their CFO are set to leave the company (their employment will cease) if this scheme is implemented, MAY suggest that they are hoping that GMD do come over the top in this way, or else that they just don't want to work for Luke Tonkin. Speculation of course.

My thoughts are that Genesis don't REALLY need KOTH now, so they don't really need RED, and there are other, much cheaper companies/projects they could buy, some of which I've discussed recently here in the "gold thread". RED look expensive for what they are:

e8637bfbe0e509ba57a3eb51ef3e238a14c7ce.png

At 15 to 20 cents per share last year RED looked OK, but no so much up around 30 to 40 cps. Below is a chart of the respective performances (in percentage terms) of RED, SLR and GMD against the ASX200 index over the past year. If SLR hadn't dropped -11.46% today they would have been a bee's whisker above the smallish return of the XJO (S&P200 Accumulation Index) but SLR have instead underperformed the XJO (after today's drop). However, RED has outperformed even GMD - and RED really aren't THAT good. There's a takeover premium already built into the RED share price in my opinion.

42d671cd197752ccc9057640b99810e6af45ef.png


If I was Ral, I'd let this one through, but I'm not, so let's see what he does...

3
Bear77
2 months ago

27-Jan-2024: There's still three trading days left in January for our gold miners, exploration companies and project developers to lodge their December Quarter Activities Reports and in the case of Exploration companies (companies who are not gold Producers), their Appendix 5B Cash Flow Reports as well, however most have reported already, or provided updates, and there have been some decent share price moves with some of the goldies that have reported already, and also some more muted responses from the market:

Code, Company, Date Reported (Dec Qtr AR/5B), share price movement on the day (%), share price movement to now (27 Jan 2024) since report (%), link to report(s):

SPR, Spartan Resources, Thursday 25th Jan, +6.25%, +6.25%, SPR-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF

NST, Northern Star Resources, Wednesday 24th Jan, +6.04%, +6.79%, NST-December-2023-Quarterly-Activities-Report.PDF

PRU, Perseus Mining, Wednesday 24th Jan, +4.51%, +5.07%, PRU-December-Quarter-Report.PDF plus PRU-December-Quarter-Webinar-Presentation.PDF See also ORR-Media-report-regarding-Perseus-Mining-Limited.PDF [18th Jan] and PRU-Perseus-announces-intention-to-make-takeover-bid-for-ORR-OreCorp-Limited.PDF [22nd Jan]. PRU's SP has risen +9.06% since the day before that M&A announcement by OreCorp (ORR) on the 18th. ORR's SP is up +8.57% over the same period (since Jan 17th) however they are not recommending the PRU offer, preferring a similar offer from Silvercorp Metals Inc (TSX/NYSE: SVM), which is discussed in OreCorp's Report, linked to below. PRU already owns 19.9% of ORR (OreCorp).

GMD, Genesis Minerals, Wednesday 24th Jan (12:31pm), +3.59%, +2.29%, GMD-Quarterly-Activities-Report-and-Appendix-5B-Cashflow-Report-December-2023.PDF

RED, Red 5, Update only on Monday 8th Jan, +3.57%, +16.07% (from 28 cps to 32.5 cps), RED-December-Qtr-Positions-Red-5-to-Achieve-Top-End-of-Guidance.PDF

RRL, Regis Resources, Thursday 25th Jan, +2.86%, +2.86%, RRL-Quarterly-Activities-Report.PDF

CMM, Capricorn Metals, Update only on Tuesday 9th Jan, +1.37%, +3.20%, KGP-Continues-to-Deliver-Outstanding-Cash-Generation.PDF - They also released an exploration update on Thursday (25th): CMM-Quarterly-Exploration-Update.PDF and their SP rose by +2.27% on the day. CMM's Full Quarterly Activities Report is still to come - by middle of this coming week.

EMR, Emerald Resources, Update only on Monday 8th Jan, +1.34%, +9.03%, EMR-Another-Impressive-Quarter---Okvau-Quarterly-Gold-Production.PDF. EMR also released the following on the 24th: Significant-Exploration-Results-Continue-at-EMR-Prospects(24Jan).PDF (SP +0.94%) and this on the 25th: EMR-Recommended-and-Unconditional-Takeover-Offer-for-Bullseye-Mining-Extended (again).PDF (+1.56%). EMR now own 78.05% of Bullseye Mining - a takeover which has been going on since 7th December 2021, so for over TWO YEARS now!

SLR, Silver Lake Resources, Update only on Monday 8th Jan, +2.21%, +6.19%, SLR-December-Quarter-Sales-Results.PDF

DEG, De Grey Mining, Tuesday 23rd Jan, +1.28%, +2.13%, DEG-Quarterly-Activities-Report---December-2023.PDF and DEG-Quarterly-Cash-Flows-Report---December-2023.PDF

TIE, Tietto Minerals, Update only on Monday 8th Jan, +0.83%, +1.67%, Tietto-Update-Record-Monthly-Production-at-Abujar-Gold-Project.PDF. TIE are also under a 58 cps (A$0.58/share) takeover offer by Zhaojin Capital, a wholly-owned subsidiary of the Chinese company Zhaojin Mining Industry Company, which currently holds around 7.02% of TIE, or did in October when they first launched this takeover. TIE have mostly been trading at higher levels since the takeover offer was disclosed; During January their trading range has been mostly between 60 and 62 cps. Despite this, Zhaojin have not raised their offer price (above 58 cps) but have simply extended the offer period.

ALK, Alkane Resources, Monday 15th Jan, +0.00%, -13.39%, ALK-Quarterly-Activities-Report.PDF. Two days after that Dec Qtr Activities Report was released mid-month, they released this: Director-Share-Sale,-Appendix-3Y-and-ASIC-Form-604(17Jan).PDF. While Alkane's Chairman, Ian Gandel has only sold ~7.32% (~8.7m shares) of the 118.8 million shares that he held - and still holds ~110.1m shares (~18.3% of ALK's shares on issue) - and has stated that he "remains a significant long-term shareholder of the Company and has no present intention to sell any further shares in the short or medium term", the market didn't like the sell down at all, with the ALK share price falling -10.57% from the previous days close (61.5 cps on the 16th) to now (55 cps).

OBM, Ora Banda Mining, Thursday 18th Jan, +0.00%, +0.00%, OBM-December-2023-Quarterly-Activities-and-Cashflow-Reports.PDF

SBM, St Barbara, Thursday 25th Jan, +0.00%, +0.00%, SBM-Quarterly-Report-Q2-FY24.PDF plus they also released the following update two days earlier (on the 23rd): Simberi Resource Definition Drilling Update

SMI, Santana Minerals, Thursday 25th Jan, -0.38%, -0.38%, SMI-Quarterly-Activities-and-Cashflow-Reports.PDF. SMI had plenty to announce during January, including a response to an ASX speeding ticket, Board changes, drilling results and a project update - see here: https://www.santanaminerals.com/asx-announcements. Their SP is now $1.295, which is +28.22% higher than the $1.01 share price they finished December with, so I don't think there were any nasty surprises in their quarterly report. They've had a good month!

WAF, West African Resources, Thursday 25th Jan, -0.53%, -0.53%, WAF-Quarterly-Activities-Report.PDF and WAF-Quarterly-Cashflow-Report.PDF. WAF also released an update earlier in the month - on Wednesday 10th: WAF-2023-Guidance-achieved-with-226,823oz-gold-produced.PDF and their SP rose +1.6% on the day, but is now back to 94 cps which is the same as where they closed on the 9th - being the day before that update.

KCN, Kingsgate Consolidated, Tuesday 23rd Jan, -0.83%, +6.22%, KCN-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF. KCN also released this back on the 3rd: KCN-TAFTA-Update(3Jan).PDF (SP down -3.75% on the day), this on the 5th: KCN-High-Grade-Gold-Intercepts-at-Chatree(5Jan).PDF (SP + 0.40%), and this on the 9th: KCN-High-Grade-Gold-Intercepts-at-Chatree---Updated-Table-1(9Jan).PDF (SP +1.58%). However, since the day before the Jan 3rd TAFTA update announcement, KCN's SP has fallen -4.12% from $1.335 then to $1.28 now.

ORR, OreCorp (formerly Silver Stone Resources), Thursday 25th Jan, -0.87%, -0.87%, ORR-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF, OreCorp are not on my watchlist and are developing the Nyanzaga Gold Project in northwest Tanzania (in Africa); they are currently under takeover offer from both Silvercorp Metals Inc (TSX/NYSE: SVM) and Perseus Mining (PRU, discussed above) - see here: ORR-Response-to-announcement-regarding-takeover-bid-by-Perseus.PDF. The ORR Board is recommending the Silvercorp offer over the Perseus Offer, as discussed in their ORR-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF, despite PRU already owning 19.9% of ORR. ORR's SP is up +8.57% since PRU's interest in ORR was disclosed to the market on the 18th Jan, and ORR is up +31.03% since the day before the Silvercorp deal was announced back on August 7th (43.5 cps to 57 cps now).

PNR, Pantoro, Monday 22nd Jan, -2.27%, -6.82%, PNR-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF, and they also released an update back on the Mon 8th: PNR-December-2023-Quarter-Production-Update(8Jan).PDF and their SP fell -7.55% on that day, and is now down -22.64% at 4.1 cps compared to their previous day's close (5.3 cps on Fri 5th). They also released the following on the 17th: PNR-Underground-Development-to-Commence-at-Scotia(17Jan, before market opened).PDF plus PNR-Addendum---Underground-Development-to-Commence-at-Scotia(17Jan, 4.54pm).PDF (SP down -6.25% on the 17th).

WGX, Westgold Resources, Update only on Thursday 4th Jan, -2.4%, -0.48%, WGX-Q2-FY24-Production-Update(4Jan).PDF. Westgold also released the following updates during the month: Westgold-Commences-Trading-on-US-OTCQX-Market(9Jan).PDF (+1.82% on the day), WGX-Exploration-Update(16Jan).PDF (+3.34% on the day), WGX-Exploration-Update---Revised-(16Jan-After-Market-Close).PDF (+0% the following day), and WGX-Bluebird-Exploration-Update(25Jan).PDF (+0.98% on the day). Their full Quarterly Activities Report is still on its way.

KIN, Kin Mining, Monday 22nd Jan, -3.12%, -4.69%, KIN-December-2023-Quarterly-Activities-Report.PDF and KIN-December-2023-Quarterly-Cashflow-Report.PDF. KIN also released this back on Jan 8th: KIN-High-Grade-VMS-Mineralisation-Discovered-at-Cardinia-East(8Jan).PDF (& their SP rose +7.94% on the day - but is now -3.17% below their previous day's share price - which was 6.3 cps - and they're now 6.1 cps).

BCN, Beacon Minerals, Update only on Thursday 11th Jan, -3.85%, -7.69%, BCN-Jaurdi-Gold-Project-December-Quarter-Production-Update(11Jan).PDF

GOR, Gold Road Resources, Update only on Wednesday 3rd Jan, -8.95%, -12.53%, GOR-December-2023-Quarter-Production-Update.PDF

KAU, Kaiser Reef, Tuesday 23rd Jan, -11.11%, -11.11%, KAU-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF. KAU also released this on the 22nd: KAU-Nuggetty-Historic-Gold-Mine-Drilling-Commenced(22Jan).PDF (their share price closed unchanged on the 22nd).

CAI, Calidus Resources, Thursday 25th Jan (1:29pm), -12.82%, -12.82%, CAI-Quarterly-Activities-Report-and-Quarterly-Cashflow-Report.PDF. CAI had plenty in the way of news flow during January, but the market didn't seem to like most of it: CAI-Outstanding-Drill-Results-Grow-Potential-at-Bulletin-Deposit(9Jan, 8.15am).PDF and CAI-Outstanding-Drill-Results-Grow-Potential---Amended(9Jan, 2.59pm).PDF (SP -4.76%), CAI-Warrawoona-positioned-for-a-strong-H2-FY2024(10Jan).PDF and Calidus-Investor-Webinar-Presentation(10Jan).PDF (SP -2.5%), CAI-Warrawoona-positioned-for-a-strong-H2-FY2024---Amended(11Jan).PDF (SP +2.56%), CAI-Potential-lithium-corridor-defined-at-Tabba-Tabba-South(15Jan).PDF (+0%), and CAI-Shallow,-high-grade-intercepts-continue-at-Bulletin(18Jan).PDF (+2.44%). The last closing price for CAI before the earliest of those announcements, being the Drill Results on the 9th, was 21 cps (8th Jan close) and CAI is now trading at 17 cps, which is -19.05% lower, so not a good month for CAI shareholders.

YRL, Yandal Resources, Monday 22nd Jan, -15.15%, -16.16%, YRL-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF. Back on the 12th Jan, they emerged from a trading halt with this: YRL-Response-to-ASX-Price-Query(12Jan).PDF and YRL-Oblique-Phase-Two-RC-Drilling-Results(12Jan).PDF and their SP fell -16.13% on that day (12th). Before that, they had last traded at 15.5 cps (on the 10th) and they're now trading at 8.3 cps, some -46.45% lower. It sounds like they've been smashed, right? However they're actually trading now at the same price ($0.083) that they were back at the end of December. The recent fall has to be looked at within the context that their SP rose +96.2% in two weeks from 7.9 cps on 28th December to 15.5 cps on 10th Jan before the trading pause and subsequent trading halt was implemented pending their response to that speeding ticket (their response is linked to above). I have commented here previously that they're a very small company with very low liquidity and their share price can have BIG moves on SMALL volume - and the past month has certainly proven that. YRL are way too illiquid and volatile for me!

EVN, Evolution Mining, Wednesday 17th Jan, -17.33%, -15.47%, EVN-December-2023-Quarterly-Report.PDF plus EVN-Exploration-Success-Continues-at-Cowal-and-Ernest-Henry.PDF [I posted a straw on EVN's report on that day, see here: https://strawman.com/reports/EVN/Bear77?view-straw=25009] I sold all of my real money portfolio EVN shares on Thursday (25th Jan).


The following goldies have only released updates in Jan (links above) but not their full reports - those full quarterly reports (and in the case of exploration companies also their Appendix 5B Cash Flow Reports) should be released on either Monday, Tuesday or Wednesday (the last three trading days of January) unless they apply for and are granted an extension:

CMM (Capricorn Metals), EMR, (Emerald Resources), GOR (Gold Road Resources), TIE (Tietto Minerals), SLR (Silver Lake Resources), WGX (Westgold Resources), RED, (Red 5) and BCN (Beacon Minerals).

Just to be clear - here's an excerpt from the ASX's Guidance Note 31 relating to mining entities' reporting obligations under the ASX listing rules, and specifically how they define a "mining exploration entity" vs. a "mining producing entity":

7071b36ffb76fda0eaad722596238340191491.png

Source: https://www.asx.com.au/documents/rules/gn31_reporting_on_mining_activities.pdf

Also: ASX-Rules-gn23-amendments-01-12-19.pdf and ASX-Rules-Chapter05.pdf (Chapter 5 is titled "Additional Reporting on mining and oil and gas production and exploration activities")

In summary, most companies that have transitioned to being producers and have notified the ASX of this fact, and where the ASX have accepted that they are now producers, are no longer required to lodge Appendix 5B Cash Flow Reports each quarter to the ASX. In terms of quarterly reports, they only need to lodge quarterly activity reports. However, if they cease production, as happened with Kingsgate Consolidated (KCN) in recent years when their only producing mine - in Thailand - was shut down by the Thai government and the company was basically told to leave the country, then they would usually have to start lodging those 5B Cash Flow Reports again, because they are no longer producers, and that's what KCN had to do, and they are still lodging them because they've only restarted production at their Chatree gold mine in recent months, so are only re-establishing themselves as gold producers again now.

The following goldies have not released their full December Quarter Reports yet (or any production updates during January) - and are expected to do so on either Monday, Tuesday or Wednesday (the last three trading days of January):

NEM (Newmont, formerly Newcrest Mining), BGL (Bellevue Gold), RMS (Ramelius Resources), RSG (Resolute Mining), TBR (Tribune Resources), RND (Rand Mining), AUC (Ausgold), STK (Strickland Metals), M2M (Mt Malcolm Mines), LSA (Lachlan Star), STN (Saturn Metals), TGM (Theta Gold Mines), MDX (Mindax), CYL (Catalyst Metals) and PDI (Predictive Discovery).

Actually, NEM is only a CDI here in Australia because their primary listing is on the New York Stock Exchange, not the ASX, so I'm not sure whether they are required to lodge a quarterly activity report with the ASX - probably not, but those other companies certainly are.

Often the ones with the worst news (or more bad than good news) tend to report as late in the month as possible...

As mentioned above, there is some M&A activity with PRU, ORR, EMR and TIE.

Southern Cross Gold (SXG) have a financial year that runs from June 1st to May 31st, so they released their half year report in January for the half year ending November 30th, and their quarters complete at the end of August (Q1), November (Q2), February (Q3) and May (Q4). They released plenty in January - see here: https://www.southerncrossgold.com.au/investor/asx-announcements. However their share price is currently $1.085, which is -13.89% below their $1.26 share price (SP) at the end of December.


Disclosure: Of the gold sector companies mentioned above, I hold NST, GMD and CMM here, plus a tiny PNR position, and I own NST, GMD, RRL, GOR, RMS and BGL in my real money portfolios (including my SMSF). On Thursday I sold all of my EVN shares and bought a position in BGL (Bellevue Gold) in my SMSF. I'll probably do a Bull Case straw for BGL shortly.

338d62ff5176d901f7bcad7e007e13bd1e3693.png

9

Bear77
2 months ago

31 Jan 2024 (11:56pm): The following goldies have released their Quarterly Activity Reports (and in the case of exploration companies also their Appendix 5B Cash Flow Reports) in the past three days - since I posted about this on the weekend. Once again, I've listed them in order from best market reaction on the day of the report down to worst market reaction on the day:

Code, (Company), Date Reported (Dec Qtr AR/5B), share price movement on the day (%), share price movement to now (31-Jan-2024) since report (%), link to report(s):

M2M (Mt Malcolm Mines), Wednesday 31st Jan (9am), +13.64%, +13.64%, M2M Quarterly Activities and Cashflow Report. M2M's 5B showed that they had just $378K of cash and cash equivalents left on Dec 31st, but they held an EGM today (Jan 31st) and the 10 resolutions were all voted up 100%, which you don't see too often at all(!) - 0.00% votes against - in all ten cases - see here: M2M-Results-of-2024-Extraordinary-General-Meeting(5.23pm).PDF [EGM results were released after the market had closed.] The resolutions were all about a placement, ratifying prior placements, converting some of their minor debt (like director fees owed to their directors) into equity, and issuing options. So they'll keep the lights on for a bit longer. M2M's entire market capitalisation, even after this +13.64% SP rise today (from 2.2 cps to 2.5 cps) is still under $3m. They are the smallest of Nanocaps.

BGL (Bellevue Gold), Monday 29th Jan, +5.41%, +2.70%, BGL-Quarterly-Activities-Report.PDF and BGL-Quarterly-Cashflow-Report.PDF

BCN (Beacon Minerals), Wednesday 31st Jan (12:15pm), +4.17%, +4.17%, BCN-Quarterly-Activities-Report.PDF

RMS (Ramelius Resources), Tuesday 30th Jan, +2.93%, +3.91%, RMS-December-2023-Quarterly-Report-and-FY24-Guidance-Upgrade.PDF plus RMS-Darren-Millman-appointed-Chief-Financial-Officer.PDF

PDI (Predictive Discovery), Monday 29th Jan, +2.5%, +2.5%, PDI-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF

CMM (Capricorn Metals), Tuesday 30th Jan, +1.54%, +0.66%, CMM-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF

SLR (Silver Lake Resources), Tuesday 30th Jan, +1.26%, +1.68%, SLR-Quarterly-Activities-Report.PDF

WGX (Westgold Resources), Wednesday 31st Jan, +0.45%, +0.45%, WGX-December-2023-Quarterly-Report.PDF and December Quarter FY24 Investor Update.PDF

AUC (Ausgold), Wednesday 31st Jan (6:43pm, i.e. after the market had already closed), +0.00%, +0.00%, Ausgold-December-2023-Quarterly-Report-and-Appendix-5B.PDF [Poor form to lodge after market close on the last allowable day. The market will get to react to this report tomorrow - Thursday.]

FFM, (FireFly Metals, formerly AuTeco Minerals), Tuesday 30th Jan, +0.00%, -0.94%, FFM-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF

RND (Rand Mining), Wednesday 31st Jan (1:55pm), +0.00%, +0.00%, RND-Quarterly-Activities--Cashflow-Report---December-2023.PDF

STK (Strickland Metals), Wednesday 31st Jan (5:36pm, i.e. after the market had already closed), +0.00%, +0.00%, STK-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF [Poor form to lodge after market close on the last allowable day. The market will get to react to this report tomorrow - Thursday.]

TGM (Theta Gold Mines), Wednesday 31st Jan (1:46pm), +0.00%, +0.00%, Theta-Gold-Quarterly-Activities-and-Cashflow-Report-31-December-2023.PDF

TIE (Tietto Minerals), Monday 29th Jan, -0.82%, +1.64%, TIE-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF and then after the market closed this afternoon (5:56pm on 31-Jan-2024): TIE-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report-(Updated)(corrected Ore Reserve Statement).PDF

RSG (Resolute Mining), Wednesday 31st Jan (6:08pm), -1.15%, -1.15%, RSG-December-2023-Quarterly-Activities-Report-and-2024-Guidance.PDF [6:08pm] and RSG-Q4-2024-Activities-Presentation.PDF [6:00pm] [Poor form to lodge after market close on the last allowable day. The market will get to react to this report tomorrow - Thursday.]

TBR (Tribune Resources), Wednesday 31st Jan (1:28pm), -1.99%, -1.99%, TBR-Quarterly-Activities--Cashflow-Report---December-2023.PDF

EMR, (Emerald Resources), Tuesday 30th Jan, -2.35%, -2.05%, EMR-Quarterly-Report.PDF

LSA (Lachlan Star), Tuesday 30th Jan (7:11pm), -4.55%, -4.55%, LSA-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF [LSA finished Jan at 4.2 cps, -23.64% lower than their 5.5 cps December closing price. Their trading range in January was 4.2 cps up to 6 cps, and they finished at their lowest point, being 4.2 cps.]

RED, (Red 5), Wednesday 31st Jan, -4.55%, -4.55%, RED-December-2023-Quarterly-Activities-Report.PDF and RED-December-Quarterly-Webcast-Presentation.PDF and East Coast Roadshow Presentation.PDF

STN (Saturn Metals), Wednesday 31st Jan (7pm), -5.71%, -5.71%, STN-Quarterly-Activities--Cashflow-Report.PDF [Poor form to lodge after market close on the last allowable day. The market will get to react to this report tomorrow - Thursday.] [STN fell -5.71% today on no news, being -1 cent from 17.5 to 16.5 cps. Their trading range in January was from 16.5 up to 22.5 cps, and they finished at their lowest point, being 16.5 cps.]

CYL (Catalyst Metals), Wednesday 31st Jan (8:22am), -6.15%, -6.15%, CYL-Quarterly-activities-report.PDF

MDX (Mindax), Wednesday 31st Jan (4:33pm), -9.80%, -9.80%, MDX-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF [Poor form to lodge after market close on the last allowable day. The market will get to react to this report tomorrow - Thursday.] [MDX fell -9.80% today on no news, being half a cent from 5.1 to 4.6 cps. Their trading range in January was from 4.6 up to 6.2 cps, and they finished at their lowest point, being 4.6 cps.]

GOR (Gold Road Resources), Monday 29th Jan, -18.42%, -11.11%, GOR-Quarterly-Activities-Report---December-2023.PDF and GOR-Investor-Presentation---December-2023-Quarterly-Results.PDF


That's it for another quarter...


ed0a01572c213ea86f5ce47dc70e999b13f7d8.png


Except we do have half year reports coming out during Feb and March...


Of those 23 gold companies companies who lodged their December quarterly reports in the last three days of January, Five of them (AUC, STK, RSG, STN & MDX) lodged after the market had closed today, so I'll post a quick update below this one tomorrow night (Thursday 1st Feb) about how the market treated those 5 on the first trading day after they lodged their reports.

4

Bear77
2 months ago

Wednesday 31st January 2024: I've often said that gold exposure - even via investing in gold companies who own gold that is still underground - rather than investing in gold bullion - can give you returns than are uncorrelated to the wider sharemarket. And gold doesn't always move in the opposite direction to other sectors, but it does often enough, and I have to take the good with the bad. Today, gold stuck its tongue out and refused to play nice with the other sectors.

238e560abe174122dce69e58fcdbed7dcd877c.png


But sometimes, when the majority of the market is having a tantrum, the gold sector provides the only green movement in my portfolios. And even when the sector is in the red, there are usually still some goldies in the green. Today it was Genesis (GMD, +1.56%) and Ramelius (RMS, +0.95%) for me, and the others didn't fall by much anyway.

Whether the sector is up or down, day to day, week to week, even month to month, I still like to have a portion of my investable capital in the gold sector, even more so when I watch world news...

But picking the right goldies is important to your overall returns. They are definitely not all the same. And the investment returns vary greatly. You can certainly lose money in the gold sector as easily as any other sector, probably more easily if you pick the wrong companies. Bigger is generally thought to be safer. But not always. Our biggest was Newcrest and they've underperformed many of their smaller counterparts, and now they've been acquired by the New York listed Newmont Corporation, so you can only buy Newmont CDIs to get exposure to what used to be Newcrest, and why would you?

NST is now the largest ASX-listed Aussie gold company, and I like them and hold them. But the the next largest is Evolution Mining (EVN) and they're also producing a fair bit of copper now, which makes their real costs hard to determine in terms of comparing them to other gold producers, and I've sold out of EVN recently.

I've recently bought back into Australia's newest gold producer, Bellevue (BGL), but they're risky because they only have one gold mine and no prior track record. Their management and Board all have track records, working elsewhere, but Bellevue as a gold company doesn't have a production track record yet, they've just started producing. I like them (now, not so much this time last year), but I wouldn't recommend them to someone who wants a more passive exposure to the sector - like buy and stick them in the bottom drawer for 5 or 10 years - I'm not sure there are too many in the sector that are in that "set and forget" category, but if you aren't planning to monitor them closely, I'd go with a larger company with multiple mines and a decent management track record of excellent capital allocation and outstanding total shareholder returns - and NST is probably the only company that ticks all of those boxes right now for me.

7

Bear77
2 months ago

Thursday 1st Feb 2024: OK - here is how the market treated those 5 goldies today - the five who lodged their December Quarter Activity Reports/Cash Flow Reports AFTER the market closed yesterday, on the last day of January:

  • AUC, (Ausgold), +0.00% (closed steady at 2.7 cps)
  • STK (Strickland Metals), +0.00% (closed steady at 9.7 cps, but STK traded in a range between 9.1 and 9.8 cps today)
  • RSG (Resolute Mining), -5.81% (down 2.5 cps from 43 cps to 40.5 cps)
  • STN (Saturn Metals), -18.18% (down 3 cps from 16.5 to 13.5 cps)
  • MDX (Mindax), +2.17% (up one tenth of a cent from 4.6 cps to 4.7 cps)

And that's it for this lot of quarterlies and the market's reaction to them.

For some context, every sector was in the red today, but Consumer Staples and Gold were down the least, so performed better relative to the other sectors.

8950336f5f3edc6dba52dc4addf567329c55db.png


Kin Mining (KIN) released this today: Investor-Presentation---Resource-Rising-Stars.PDF (they closed down -1.64%)

172dd0c90be06f129ce82d8f9e75acf041c434.png

3d0ead0482eed09e48126e0ddfd8773a7e5011.png

KIN has already sold some of their gold projects to Genesis (GMD) - see here: Kin-Receives-$53.5m-from-Sale-of-Gold-Deposits-to-Genesis.PDF [14-Dec-2023] and here: GMD-to-acquire-the-Bruno-Lewis-and-Raeside-gold-projects(GMD).PDF [14-Dec-2023] ...and in today's presso they're still keen to point out that their (Kin's) tenements are surrounded by Genesis assets and that Red 5's KOTH gold mill and Aeris' Jaguar base metals (copper & zinc) mine aren't too far away either.

St Barbara (SBM) still own 14% of KIN by the way - which they retained even though they sold Gwalia (and their Leonora Mill) to Genesis (GMD) last year.

I'm sure Genesis (GMD) will be doing more M&A over the next few years, but there are also other players in the area that they might have an eye on, in addition to KIN, like Red 5 (RED) at a lower price, or M2M (Mt Malcolm Mines) whose market cap is less than $3m at this point:

c47653b5983232d0a54cf0dfbc55eee908b266.png

And STN (Saturn Metals) and their Apollo Hill gold project:

8c4f78649c5153df5eb03d8ac1b932953bbe45.png

After today's -18.2% SP fall, STN's market capitalisation is just a bee's whisker over $30m.

I hold GMD shares, but not KIN, SBM, M2M or STN shares.

Yandal Resources (YRL) were in a trading halt all day pending a capital raising announcement (another one). (Not held)

Regis Resources (RRL) went into a trading halt this morning (see here: Trading-Halt(RRL).PDF) pending an announcement regarding the commencement of proceedings claiming a royalty applies in relation to the Tropicana Gold Project. They resumed trading later in the afternoon after releasing this: Tropicana-Gold-Mine-Royalty-Claim.PDF Regis (RRL) closed down -5.5%. IGO closed down -4.23%. South32 (S32) closed down 1.79%. South32 is the company making a claim against IGO for royalty payments for gold produced at Tropicana. IGO owned 30% of the Tropicana gold mine and they sold that 30% to Regis in the first half of CY2021, and Regis assumed liability at that time for the royalty to the extent it may apply to any of the Tropicana Gold Project after its acquisition. Also, under the Asset Sale Agreement Regis agreed to indemnify IGO for liability arising in relation to the Transferred Royalty on the terms of the Asset Sale Agreement.  Regis’ view at the time of the acquisition was, and remains, that no amount is due under the Royalty Agreement in respect of current operations at the Tropicana Gold Project, and Regis intends to take appropriate action to protect its position.

I hold S32 and RRL shares in real money portfolios - this could get interesting.

5

Bear77
a month ago

Saturday 3rd Feb 2024: Update: I just had a listen to (and watched) this MoM podcast:

4f6d0ff07d81ee4a3b161dc7dc5f9c4517a23a.png

[Money of Mine podcast, Thursday 1st February 2024: Name & Shame! + When IGO thought things couldn’t get worse… | Daily Mining Show (youtube.com)]

Click on the image above for the full podcast, or click here to go straight to their "Name & Shame" segment where they discuss those miners who lodged their quarterly reports after the market had closed on January 31, the last day they were allowed to lodge their reports for the December Qtr.

They do name a few goldies that I hadn't mentioned here during the last week (because they are too small and speculative and I don't follow them):

  • Alara Resources Limited (AUQ) is an Australian-based minerals exploration and development company with copper-gold projects in Saudi Arabia and Oman. 31-Jan-2024, 8:19pm: Alara-AUQ-Quarterly-Activities-and-Cashflow-Report.PDF AUQ's SP rose +8.57% on Feb 1, and another +2.63% on Feb 2, now 3.9 cps, +11.43% (or four tenths of a cent) above the 3.5 cps they closed at on Wednesday, before their report was lodged, but they fell -7.89% on Wednesday, so they're actually only up one tenth of a cent (0.1 cps) on the 3.8 cps they closed at on Tuesday. AUQ's m/cap = $27.3m. They are small! AUQ's 51%-owned Wash-hi Majaza Copper-Gold Project in Oman is their primary focus currently, and they have taken on significant debt to get the mill built, including from the Sohar International Bank in Oman, and from their JV Partners in the project (who are Oman-based and own 49% of the project). It's not hard to see how AUQ could end up losing control of this asset. They've already had issues that have caused delays: "Commissioning Challenges: The project timeline was revised due to manufacturing defects in certain parts critical to plant commissioning. During SAG mill commissioning a manufacturing error in the high-speed (HS) couplings of the mill was observed. Eccentricity was observed in the side holes of the couplings when the pins were installed before the final no-load trails of the mills. The supplier, CITIC China, manufactured a new set of HS couplings. The new parts have arrived at site and have been installed." It appears this plant is going to mostly produce copper. Another headwind currently.


  • Matsa Resources (MAT) is a gold exploration company focused currently on their Devon Gold Project and their Fortitude North project, which are both within their Lake Carey Gold Project, which is surrounded by a number of world class gold mines and Matsa believe is highly prospective for new gold discoveries over several 100%-Matsa-held tenements. Lake Carey includes three gold mines that are all in care and maintenance: the underground (UG) Red October gold mine and the open pit (OP) Fortitude and Devon gold pits. The Devon pit was subject to a profit share joint venture with neighbouring Linden Gold Alliance but that JV and profit sharing arrangement was terminated in early December. 31-Jan-2024, 8:15pm: Matsa-MAT-31-December-2023-Quarterly-Report.PDF MAT's SP didn't react at all on Feb 1, and rose +3.57% on Fri Feb 2. MAT's m/cap = $13.4m. Matsa also have interests in prospective lithium and base metals projects in western Thailand:
  • 579a0c6bd9f89642d7398b25b939dc3731e728.png


Matsa's Lake Carey Gold Project is located just south of Laverton and south east of Leonora:

  • 08326b2cf3e3e04f2bb3d5fe6baf4af090f81e.png


Matsa has $5m in drawn debt and bugger-all cash left:

  • 219a352104096830f36acadc2957a6a92544b6.png
  • Next cab off the rank is Horseshoe Metals (HOR), a mineral exploration company focussed on the exploration and development of copper/gold projects in the Peak Hill Mineral Field in central Western Australia. WNW of DeGrussa (SFR), south of Abra (G1A), east of Fortnum (WGX):
  • 9e97b853ff5f8dc5a0064c5042eb414571f59d.png


  • 31-Jan-2024, 8:13pm: HOR-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF. HOR's SP closed flat on Thursday and rose +16.67% on Friday, but to put that into context, it rose by 1 tenth of one cent, the very smallest amount it could rise by - from $0.006 to $0.007. Any movement is large in percentage terms once your SP drops below 1 cent per share. HOR only had $2K in the bank at the end of December, but still had just over $1m in undrawn loan facilities. Their cashburn for the December quarter was only $62K so you'd imagine there's not too much going on at Horseshoe Metals if the company's entire expenditure over three months was only $62,000. Based on that tiny quarterly cashburn and their available funding (via the loan facility), they've got 17.7 quarters of funding, so they didn't trigger the 5B questions relating to not having enough funding for at least the next 6 months (2 quarters), however nothing is going to happen without some exploration spending you would think, so they have to start spending sooner or later to create some value. Again, they believe they have mostly copper, with some gold. HOR's current market cap is less than $4 million. Little wonder I don't follow them.


  • Next is Golden Deeps (GED) who are focused on exploration and development of copper and vanadium projects in the Otavi Mountain Land copper district of Namibia, as well as advancing exploration of copper and gold projects in the Lachlan Fold Belt of NSW, Australia, so GED do have a tenuous link to gold. 31-Jan-2024, 806pm: GED-Quarterly-Activities-and-Appendix-5B-Cash-Flow-Report.PDF. GED's SP rose +5.41% (or $0.002 to $0.039) on Thursday and then dropped -2.56% (by $0.001) to $0.038 on Friday, so still up on their Wednesday close (of $0.037). GED's m/cap = $4.5m - less than $5m is fairly irrelevant.


  • Then there is Australian Gold and Copper Ltd (AGC) is an exploration company with a focus on the exploration and development of its multi-asset gold portfolio situated in the world class Lachlan Fold Belt in New South Wales. AGC's wholly owned Moorefield, Cargelligo and Gundagai projects cover approximately 1,000 square kilometres and contain numerous drill ready gold targets. 31-Jan-2024, 7:35pm: AGC-Quarterly-Activities-Report---December-2023.PDF and (at 7:38pm): AGC-Quarterly-Cashflow-Report---December-2023.PDF. AGC's SP did nothing on Thursday and rose +7.46% (or half a cent) to $0.072 (7.2 cps) on Friday. Their SP had also risen +4.62% (or +$0.003) on Monday (29th Jan) on the back of this announcement: Hilltop-Drilling-Underway.PDF. They are up +10.77% since Thursday 25th Jan (the last trading day before last weekend - the Australia Day long weekend). AGC's m/cap = just under $15m.


  • I should just point out that Thursday (1st Feb) was a poor day across the entire market, so when you read that a company's share price didn't move (closed flat) on that day (as was the case with AGC, HOR and MAT above), that's actually positive on a relative basis:


  • 8950336f5f3edc6dba52dc4addf567329c55db.png


That was Thursday Feb 1 (above). Below is what happened on Friday Feb 2:

  • 991b3e3401d15267f4bdf8347433ce7bd75693.png


  • In that light, it's easier to understand why the response to some of these reports was more muted on Thurday and more positive on Friday.


  • Next is the (once) mighty FML (no need to be so down; life's not that bad surely!?!), Focus Minerals, a $48.7m (m/cap) goldie that I used to follow, when they were bigger and producing more gold. 31-Jan-2024, 7:29pm: FML-December-2023-Quarterly-Activities-Report.PDF and (at 7:30pm): FML-December-2023-Quarterly-Cashflow-Report.PDF. The FML SP did nothing on Thursday, then dropped -2.94% (half a cent) to close at $16.5 cps on Friday. FML have traditionally held a LOT of land (tenements) with most of it being prospective for gold, but the gold they kept finding tended to be low grade and uneconomic to mine for the most part. They were a small gold producer until they suspended production in Coolgardie in 2013 in response to lower gold prices allowing the company to concentrate on the exploration of the wider Coolgardie area within the Focus tenements, while also looking to expand its near mill mineable reserves targeting higher grade, larger scale ore bodies (according to their website). They are now producing gold again at Coolgardie (having recommissioned their mill due to the much higher gold price), but they only managed to process 266,786 tonnes of paydirt (ore) at 0.98 g/t and 87% recovery during the December quarter, producing 7,262 ounces of gold for the quarter. So not completely irrelevant, but very small in the scheme of things. But with a HEAP of debt - and bugger all cash left:
  • e8f48ba6b2cdbd3409ccf255b8628eaf284922.png
  • d497904105eeb00c7b8a56e2b967803ea8f1db.png
  • 864e91da38af904092d218d61054021e789071.png
  • You may notice there that FML have ~$93m in fully drawn loans plus another ~$14m in bank guarantees and a NAB credit card (fully drawn to ~$230K), and apart from that NAB credit card, every loan is either from Shandong Gold Group (of China) or else is guaranteed (underwritten) by Shandong. Shandong Gold International Mining Corporation Limited (Shandong), who are a large gold company listed on the Shanghai Stock Exchange, owns 63.18% of Focus (FML), so Focus is considered a subsidiary of Shandong, and Shandong is the "parent entity" referred to above by Focus in their answer to question 8.8.3. Shandong own and operate the Sanshandao Gold Mine (pictured below), one of the five largest gold mines in China, and Shandong have interests around the globe.
  • 5c367b665f6ed1f9f734ce87dcbc6c06527aa3.png


  • Shandong Gold's Sanshandao Gold Mine is located on the Jiaodong Peninsula, in the Shandong Province, which is presumably where the "Shandong" part of the company's name comes from.
  • 82e51be61d40e4f68b080fa56b5743effe5d85.png
  • So while FML are an ASX-listed company, they are a subsidiary of a larger Chinese company, and I wouldn't go near them. Such companies are generally run with the interests of the parent company (and major shareholder) in mind, with very little concern for smaller Australian retail investors. The likelihood, in my view, is that this one gets run even further into the ground and then Shandong will acquire the remainder of the company that they do not already own at an even lower price, so I don't see upside from here, but still plenty of downside with FML.


  • Last one is Magmatic Resources (MAG) who are a Gold, Copper and Base Metals exploration company with some projects that they are attempting to develop in New South Wales - which includes their Wellington North, Myall and Parkes projects. 31-Jan-2024, 4:38pm: MAG-Quarterly-Activities-Report---December-2023.PDF and (at 4:40pm): MAG-Quarterly-Cashflow-Report-(Appendix-5B)---December-2023.PDF. MAG's SP dropped one tenths of one cent on both Thursday and Friday and is now at 3.5 cps ($0.035), being -5.4% below their 3.7 cps close on Wednesday (before they reported). They have no funding facilities available and need to raise fresh funds virtually immediately just to get through the current quarter, which they appear to be very calm about, but considering they are so close to going broke, they are probably doing a "fast-moving swan", so calm on the surface, but peddling like their life depends on it under the waterline.
  • 4b3ed9d6d360e5a37b46f9d8e0afbba5b61f3e.png
  • Not good. Their current market cap is just $11 million according to the ASX website, and that m/cap is going lower with a fresh CR, all other things being equal. At the end of December they had just $842K left and they burned through over $1m (net cash outflows) in the quarter.


OK, that's it for the "Name and Shame" stuff (late lodgements). The following story was also covered in detail by the MoM boys on Thursday:

7d5e5d444b8b09653430f34ce415f3baab3cd8.png

And I speak of course of the bunfight that has emerged between WMC (Western Mining Corporation), now part of South32 (S32), IGO, Regis (RRL) and the South African gold company AngloGold Ashanti; AngloGold own 70% of the Tropicana gold mine in WA - and are the mine operators; Regis bought the other 30% off IGO a couple of years ago - in 2021, and assumed all responsibility for the disputed royalty from that date.

See here: Royalty Nightmare for IGO and RRL [Money of Mine Podcast, Thursday 1st Feb 2024]

If you hold IGO or RRL shares, this matters! I hold RRL shares in my SMSF. I also hold S32 shares in two real money portfolios. I doubt it matters too much for S32 - they're just trying to exercise their rights to a royalty that they got when they split from BHP, and that royalty came from WMC when it was acquired by BHP back in 2005 for $9.2 Billion (BHP originally offered $7.3 billion in March 2005 but ended up paying $9.2 billion after a three month battle for control of Western Mining Corp).

Some pen-pusher at S32 has uncovered the details of this royalty, which they say applied to all projects that resulted from soil sample data compiled in a then-WMC-owned database, and one of those is, apparently, the Tropicana Gold Mine, which Regis (RRL) own 30% of. It gets worse. In IGO's announcement - Tropicana-Gold-Mine-Royalty-Claim(IGO).PDF - they say that they have been served with a writ of summons issued out of the Supreme Court of Western Australia by South32 Royalty Investments Pty Ltd (part of S32) and that South32's claim is not just for a current royalty, but also for backpay and interest on the royalty as it should have applied for all of the gold produced by Tropicana since it's started up back in 2013 (mining commenced in 2012 and first gold was produced in September 2013), so over 10 years worth of backpaid royalty plus interest, plus costs, which according to S32's writ is already up to $122.1 million just for for the period from December 2014 until 30 September 2023 excluding interests and costs, plus the ongoing royalty; Apparently the royalty is 1.5% of gross revenue (gold sales, before any costs have been deducted).

From the IGO announcement (link above): "South32 asserts that the use of the soil samples by IGO led to the discovery of gold in the area of various exploration licences granted to IGO (and another) in August 2002, and that IGO’s subsequent development of the Tropicana Gold Mine (as part of joint venture operations) renders it liable to pay a 1.5% Sample Royalty to South32 on the gross revenue earned from its interest in the mine as from December 2014."

IGO sold its 30% interest in the Tropicana Gold Mine Joint Venture to Regis Resources effective 31 May 2021 and IGO has an indemnity in its favour from Regis concerning any royalty liability to South 32 from that date onwards. IGO estimates that the relevant portion of the above claim amount in the period from 31 May 2021 to September 2023 (covered by the Regis indemnity) is in the range of approximately $35 to $40 million - which would leave $82 to $87 million of the $122 million claimed as payable by IGO, if S32 win this case and IGO's calculations are correct, but since IGO and RRL are both defending their positions that no royalty is payable, the costs will rise from here clearly. South32 also seeks a declaration from the Court that royalties are payable on gross revenues realised from ongoing mining operations at the Tropicana Gold Mine and that declaration has no effect at all on IGO but would clearly affect Regis (RRL).

AngloGold Ashanti have held 70% of Tropicana for the full period and continue to hold it, and are the operators of the mine, so you would assume that they would likely also be defending their own position, assuming they have also received a similar writ from S32. However, Trav believes that this may only affect IGO (and now RRL) and not AngloGold because it was IGO who had access to the WMC data which triggered the royalty once that info was used or party used to inform decisions to do further drillling in the area and then develop a successful gold mine, and the fact that they (IGO) then sold 70% of the project to AngloGold through a JV has no impact on their (IGO's) liability in relation to that royalty. One thing is for certain, there are lawyers who will be making money out of this.

In the same poddy, there's also a section on West African gold miner Resolute Mining (RSG), titled: "Resolute's Turnaround" for anybody who is interested in them.

BTW, in the previous day's poddy, on Wednesday (31st Jan), IGO was also featured:

f7352ce9f6003dc45af824709d67343cb18031.png

IGO’s Implosion a REAL Initiation for Ivan | Daily Mining Show - YouTube [Wednesday 31st January 2024]

To go straight to the IGO discussion - about their quarterly report and conference call - click here. Just keep in mind that the royalty story didn't break until Thursday - so the Wednesday discussion was all about IGO's December Quarter Report - which was a shocker. They're in a world of pain. I used to hold IGO, but not recently.

7
Bear77
2 months ago

10-Jan-2024: Bit happening. Firstly, Yandal Resources (YRL):

128e8da450fb49481759e14c2e1c15150872f6.png


The ASX sent Yandal a speeding ticket ("please explain", aka "price query") and put them in a trading pause during the late morning, and that was then rolled into a trading halt about 26 minutes later - see here: YRL-Trading-Halt.PDF

53882b1bf73886c23af86c3f72420949a726a0.png

Yandal did NOT reply with the usual "No Idea" response, so they know there's something they need to explain, and they're taking some time to prepare that announcement; they've indicated that it should be done by market open on Friday morning (12th Jan). I'd be expecting something tomorrow (Thursday 11th).

It's likely to either be M&A related - or drilling results.

We shall see.

I don't hold YRL shares - too small and illiquid for me.


Santana Minerals (SMI) - another goldie I do not hold - were also issued with a "speeding ticket" by the ASX today, however they DID give the usual "no idea" response: Santana-Minerals-Response-to-ASX-Price-Query.PDF

They closed up +14.57% today at $1.14, but earlier in the day they got up as high as $1.31, which was +31.7% higher than their 99.5cps close yesterday (hence the price query from the ASX).

Santana just pointed to their Investor-Presentation.PDF from two days ago as the only possible explanation they were aware of - for the sharp upward spike in their share price today - and other than that... no idea.

And this was on a day when Gold was the worst performing sector, closely followed by Metals & Mining, Materials and Resources.

20ed02aadabbf55523759ea905c37ff5b2e8ff.png


Another struggling goldie, Calidus Resources (CAI) can't seem to catch a break, with share price moves that were up or down between 4% and 5% on Wednesday, Thursday and Friday last week, on no news, and then this week they've released three relatively positive announcements, and their share price did this:

Tuesday 9th January 2024: CAI-Outstanding-Drill-Results-Grow-Potential---Amended.PDF - closed down -4.76% at 20 cps.

Wednesday 10th January 2024: CAI-Warrawoona-positioned-for-a-strong-H2-FY2024.PDF - plus CAI-Calidus-Investor-Webinar-Presentation.PDF - closed down -2.5% at 19.5 cps.

[Note: Additional: An ammended version of that first announcement on Wednesday was released on Thursday 11th: CAI-Warrawoona-Positioned-For-Strong-H2-FY2024-Amended.pdf - they need to get a lot better at proof reading these announcements BEFORE they release them, coz these ammended versions have become rather common for CAI.]

Their lowest close last week was 20.5 cps and their highest close was 21.5 cps, and their SP is now lower than that range, @ 19.5 cps, despite releasing what they would have considered to be positive news this week.

"Buy on the rumour, sell on the fact" ??

I don't hold them either.


What else? Oh, Capricorn Metals (CMM), who I hold here on Strawman but not IRL, released this update on their Karlawinda Gold Project (KGP) yesterday: CMM-KGP-Continues-to-Deliver-Outstanding-Cash-Generation.PDF

Their SP rose +6 cps (+1.37%) on the day, but closed down -4 cps (-0.9%) today - at $4.39. They've had a good run. Commsec's TA (probably more automated analysis than artificial intelligence) says they're in a near-term downtrend and are bearish. Looks quite a lot like a flagpole with a pennant to me, and while they're currently at the lower end of that pennant (the support line), that support line is rising more than the upper edge (the resistance line) is falling - so they're making higher lows MORE than they're making lower highs (the lows are rising more than the highs are falling), so I still regard them as being in a longer term uptrend. If they breakout to the downside of that pennant, that would be negative, but I don't see that yet. Mind you, I'm not at all proficient at TA so take that lot with a grain or 6 of salt.

b27270ac660cb45fec265331d8465fb9edc5c7.png

The following is page 1 of that KGP update that they released yesterday (link to full announcement above):

a5fd5dc0632003d9e294b6d9df529b56a6cb25.png

Karlawinda is an example of low grades that are cheap to get out of the ground and process. The head grade is around 1 gram/tonne (1g of gold per tonne of dirt/ore) and their gold recovery is around 90% (has declined very slightly), but their costs are low. They're on track to achieve the mid-point (120Koz) of their FY24 guidance of 115,000 – 125,000 ounces with AISC (All-In Sustaining Costs) expected to be within their FY24 cost guidance range of $1,270 - $1,370 per ounce. That's an AISC guidance mid-point of A$1,320/ounce with a gold price that is currently over A$3,000/ounce and was as high as $3,150 in October.

fc787041ef497cf4cc425731d473cbec5fb368.png

Capricorn Metals' (CMM's) cash and gold on hand at the end of December 2023 was $160 million, an increase of $26.5 million from the prior quarter (Q1: $23.3m). The cash build of $26.5m was achieved after the payment of $1.7 million for accommodation units at the Mt Gibson Gold Project where they have committed to the purchase of 400 accommodation units for the project after obtaining regulatory approval to construct a new camp for the proposed mining operations (Mt Gibson being their planned 2nd gold mine).

Karlawinda:

7e7dbddd7b1a3565b94acd41a349e00f51237d.png

606febd1cb9d249c4b7d05000e860781105321.png

900637a9bf84405bdf5e6c40560edede8293f6.png

c4aefdbf211dcd191b04dd91ae9bdea39c9195.png

a1dd3913da5c424294770ad3638e3cb7fbfc7d.png


Mt Gibson Gold Project:

a6edacac5461dcdb881eb443f37d03494d9e14.png

04c62fa62748aeccfb20473d26e630a4f29eaa.png

538eca516a3a340c7a2f70d1103a3ac0cb6186.png

de84d53d2904a239915360ef18213ba6bf6954.png

0f73927638619cf7d83c63b93e27436495a5fd.png

1f444419e6e31d9509a27b3aa906e5cc0dd7d0.png

c243cea304ad77aad8b137d077d5a8da574920.png

21c6d24e68d819db6a71808fae688239c17ca4.png

Images Source: https://capmetals.com.au/projects/mount-gibson-gold/

CMM is a gold producer (@ Karlawinda) with a growth project (Mt Gibson) - and they have excellent management who have skin in the game and think/act like shareholders (company owners rather than just company managers). I should probably jump back on board this one in one of my real money portfolios as well...


One I do hold in real life as well as here is Genesis Minerals (GMD) and I've added to my GMD position in the past week as they've had a little pullback from $1.80+ levels; they recently made an all-time high of $1.91/share (intraday) - and they closed today at $1.59/share. They remain one of the 10 most shorted stocks on the ASX, but they've moved down to number 8 now according to https://www.shortman.com.au/; they were as high as #3 a few weeks ago, so the shorts have been reducing with GMD. They're surrounded on the short list by lithium stocks, uranium stocks, plus Syrah (graphite), IDP Education (IEL, at #6) and Flight Centre (FLT, at #7). Outside of the top 10 there are more mining stocks as well as WBT, BOQ, HVN and ACL (all in the top #20, between #11 and #15). PLS (Pilbara Minerals) remains at #1 with around 21% of its stock sold short. GMD (at #8) is just under 9% shorted.

I came across this earlier this week: GMD-Corporate-Presentation-Ready-Set-Grow-27-Nov-2023.pdf

It's from back in late November and was titled, "Ready Set Grow, Assets and people in place for +300,000 ounces per annum". Quite interesting!

There are 3 main slides that tell you MOST of what's worth knowing about GMD (apart from their MD, Raleigh Finlayson, who is a bit of legend in the industry). Slide 5 shows you how far they've come in just a couple of years.

fd4b225a3bd5a96d3274f5cb653a2c614481e4.png


Slide 6 shows you exactly where and what they are focused on (Leonora in the WA Goldfields):


e2f56a41a5ecf4c578961845e3fb4ef240e7e2.png


Slide 7 shows you how they're going to get from here to +300koz pa (over 300 thousand ounces of gold produced each year):


774ec7fe7aee07a128e7809b0a16d730473431.png


Since that was all put together they've bought some more small gold projects to help fill up their Leonora and Laverton Mills (gold processing plants) - They announced in mid-December that they've entered into a binding Asset Sale Agreement to acquire the Bruno-Lewis and Raeside gold projects from Kin Mining (KIN.asx) - see here: GMD-to-acquire-the-Bruno-Lewis-and-Raeside-gold-projects-14-Dec-2023.PDF

Great progress to date by Raleigh Finlayson and the rest of the team at Genesis, happy to have some shares in this one. They're absolutely going to be a bigger and better company in 5 years than they are now.

e4c8fbc7f182c11c10f052d7e02e7381f794d1.png

a08d611eb8a4b3f3db33053d2dd623f643635d.png215ce5de80dd882c6088a16faa2605251f7aae.png

Historical US$ Gold Price Performance


bf4f9a1969a72e6c1bad843b422c22890ec11a.png 753bb183f4fa8987e14733e524205a3355dc37.png

Historical A$ Gold Price Performance

83c847d2a27d81c151ff935b6854c659107761.png

Gold tends to be a good long-term investment, but the returns on individual companies that either produce gold or are gold explorers or project developers can vary greatly.

The main things to look out for are quality management teams with plenty of skin in the game - preferably people who have excellent prior track records of shareholder value creation in the space - and project quality. You need good projects and good management. Plenty of other things to look at and loads of factors that should be considered but those two are my starting points in the sector - management and project quality. And the quality of the project isn't just about the grades and the ounces, it's also about the location of the project and the access to infrastructure, among other things.

Capricorn (CMM) have shown with Karlawinda, as Regis Resources (RRL) did a few years back with Duketon, that you can make great money with low grade ore if it's easy to get at and easy to process. High grades can be uneconomic at scale if the're too deep, the ore is too complex (not easy to extract the gold consistently), or it's in the middle of nowhere, or in a high-risk location where you can be overun by armed rebels or militia or the country's government can move the goalposts - or kick you out of the country and take back the land.

Other examples of things to look out for are gold in narrow veins that can be hard to chase, locations that are prone to severe weather events, particularly heavy rain (flooding) and severe storms, Management that are in "semi-retirement" mode because they're already rich and no longer hungry, so they're happy to collect the salary and benefits but don't care much for the actual work, tenements where there are ownership disputes or where the miner has an agreement to buy the land, but doesn't own it yet, projects where the PFS and perhaps even the DFS were done primarily by the company's own management with some help from contractors, and where the assumptions therein may turn out to be a tad optimistic, gold mining companies run by geologists with limited chemical engineering or other engineering experience, and gold miners who engage in bad hedging (low priced hedging, often for 5 or more years, for the purposes of securing project finance). Just some of the bad experiences I've had in prior years; there are plenty more. Lots of pitfalls at the smaller end, that's for sure.

8

Bear77
2 months ago

Friday 12th January 2024: Just a short follow-up to my comments on Yandal Resources (YRL) on Wednesday evening (10th Jan) - they took their full trading halt period - which was through until the open today - to release their response to the "speeding ticket". They believe the SP spike on Tuesday and Wednesday was due to anticipation of drilling results - see here: Response-to-ASX-Price-Query-YRL-12Jan2024.PDF

They released those drilling results this morning - at the same time as their query response - see here for the drilling results: Oblique-Phase-Two-RC-Drilling-Results.PDF

The market seems underwhelmed, with their SP down by over -16% at midday today - making them the worst performer across the gold sector so far today by a country mile. Mind you, they were up by a lot earlier in the week, before the trading halt, as I explained on Wednesday.

I found this line interesting (from the price query response): "We note that YRL is a relatively illiquid stock with the top 20 shareholders having some 82% of the stock and consequently the share price can exhibit volatility."

Yeah, no sh!t Sherlock!

In other news, Beacon Minerals (BCN) released this yesterday: Jaurdi-Gold-Project-December-Quarter-Production-Update.PDF

The BCN SP ended the day one tenth of a cent lower (or -3.85%) at 2.5 cps yesterday, so, again, the market was underwhelmed. High Expectations?

No other price sensitive news across the sector today - or yesterday - today's best performers across the Gold sector at midday are two of the companies I discussed on Wednesday in my previous post in this thread - CAI and SMI (Calidus and Santana) - who are both up by around +5% at this point. Sometimes it takes some market participants a day or three to analyse announcements (and their likely impact) and then adjust their models and price targets accordingly.

Santana Minerals (SMI) were beaten up in 2023, falling to as low as 51 cents per share (cps) on October 10th. They are trading right now at $1.24, so +143% above that low point. One week ago, Santana closed at 98 cps, so they've put on +26.5% just this week on the back of positive news regarding their 100%-owned Bendigo-Ophir Gold Project (BOP) in the Central Otago Region of the South Island of New Zealand, particularly their recent Rise and Shine (RAS) discovery. The project is just north of OceanaGold’s (LSE: 0VAQ) Macraes Gold Mine which has produced more than 5 Million ounces of gold:

497dd000bbbc182aac2a34395b778f48ea8608.png


I don't hold any YRL, BCN or SMI shares, however SMI are interesting. Early stage, but interesting. They are ASX-listed but their assets are all outside of Australia:

f3bfb72c7340ec48eb7e95a6c750dd9f6ff38e.png

The main focus is on the BOP project in NZ (which contains the new RAS discovery), and they have a Silver Project in Mexico and some tenements in Cambodia to explore as well.

In terms of BOP (their main project, the Bendigo-Ophir Gold Project in NZ which contains the Rise and Shine or RAS deposit), to highlight how early stage they are - this is what the land looks like now - it's mostly farm land at this stage, and very hilly (as you might expect on NZ's South Island):

0b91c455fc992dbb6e2c81bcd9bb90de67f103.png


And this is where they are at with their expected permitting timeline:

6205bee343d889fba23f0a28322de15a18e63e.png


On the positive side, they believe the gold will be relatively simple and inexpensive to extract:

6b4f8a24eef586f9a2ccc757cc4668ad04bdc8.png


And they have net cash (no debt) - although not much - $10m net cash at 31st December, which won't get them too far. And at least one of their directors has some significant skin in the game (more on that in a minute). And their share register seems fairly open, with just Regal as a "Sub" - in terms of fundies.

4f9abf79ff3568a8fd5317f8a8b1342aca903b.png

Kim Bunting is a Geologist (with 48 years experience) and a current Director of Santana Minerals (SMI). See here: https://www.santanaminerals.com/our-team It would appear that Kim was part of the team that originally discovered gold at BOP, or near it.

Warren Batt is a previous SMI Director, up until 1st December 2023.

Tim Clifton is a Geologist, Lawyer and Investor - see here: https://www.businessnews.com.au/Person/Tim-Clifton and he was the Founder of Perilya Ltd., and also formerly the Non-Executive Chairman at Lodestar Minerals Ltd (LSA), an Independent Non-Executive Director at Strike Energy Ltd (STX) and Managing Director at Perilya Ltd which is now 100% owned by Shenzhen Zhongjin Lingnan Nonfemet Co. Ltd., a publically listed company on the Shenzhen Stock Exchange (Ticker: 000060) and China's third largest zinc producer. (Source: Timothy Maxwell Clifton : Positions, Relations and Network - MarketScreener)

Here's their Board's share ownership details (according to Commsec):

41f7e473e79cf97137d46e925ec5fe8527e50c.png


Santana Minerals (SMI) are still relatively small - because they're so early stage - with that slide above saying they are a $178m company based on a $1 share price. Their SP is over $1.20 now, so their market cap is closer to $220m today.

Too early stage for me - I already hold one goldie in my super (SMSF) who are trying to develop a gold mine in NSW on rural land (Regis - RRL - and their McPhillamys GP) in close proximity to a very historically successful gold mine (Cadia/Ridgeway, owned by Newmont GoldCorp, previously Newcrest Mining) and it has taken them (RRL) a long time, much longer than most expected, and they still haven't broken ground there - in terms of building the mine - despite receiving development approvals in 2023. However, Regis have cashflow from Duketon and Tropicana to keep the lights on and fund at least some of the McPhillamys development costs. Santana on the other hand are not gold producers, so they don't have that cashflow.

I imagine that Santana's upside is likely to play out over multiple years, with a number of capital raises (CRs) over that time. If you're into NZ gold exposure via an ASX-listed company, and you have heaps of patience and a long investment horizon - then - this one might suit, but remember: They are not producers and won't be for years, and they have no income to fund this development, other than their $10m of net cash plus further CRs - unless they sell part of the project to somebody else who will take on some or all of the development costs. The journey will take years and it is unlikely to be a smooth ride, so expect to put in more cash along the way, or be diluted, or both. ...Unless someone like OceanaGold acquires them...


4b20147ba7206b4678c93070e381bec66a1408.png

Source: SMI-Investor-Presentation-January-2024.PDF

4

Bear77
2 months ago

Just to wrap that post up - at the end of the day (Friday 12th Jan, 2024), Santana (SMI) finished the day up +2.54% at $1.21, having been up +3.8% earlier (at $1.225), Calidus (CAI) was the gold sector's best performer, finishing the day up +10% at $0.22, which was also their December high (closed at 22 cps on 28th Dec, 2023), and Yandal (YRL) was the sector's worst performer of the day, closing down -16.13% at 13 cps (down 2.5 cps from 15.5 cps yesterday).

But check this out:

b785d93970ac31a08b49d746c437065808f604.png

That's one crazy Christmas Tree! Quite the sector variance. It's all over the shop!!


1f330c76ee85bf3059d78faab0b400a9ffec49.png

Have a good one!

6