RE:RE:CNL Continental Gold TSX (CNL:TO) vs. GCM/TRFF - Gran Colomb>> Market cap is only 30 mio, thats due to the fact, that they are broke, almost bankrupt. <<
That is a big claim you are making. If your claim is true, then how can a broke bankrupt company buy back milliions of dollars in convertible debentures that are due so far out in 2020?
A bankrupt company wouldn't be able to buy back ANYTHING.
According to their covenants, they are using EXCESS cash to do the buyback. That is cash they don't need. Maybe you don't understand what excess means. Or mistakenly think a company whose cash balance doesn't change generates zero cash. A company can be generating a lot of cash but their cash balance does not change because they are using the cash for capex investment, improving balance sheet by paying down payables, and buybacks. Coincidently GCM has been doing all 3 of these things.
This year 2017 they will have a lot more excess cash with their H2 capex investment done and higher production. CNL is doing the opposite, they are just starting their capex spending and ramping up debt.
>> I don't count company buy backs as insider buys. Its an instrument for a company to make shareprice look better. <<
You may not count it but it is still significant when the company buybacks far surpass any tiny amount of insider sells. GCM is buying back to improve their financial position, pay less interest, and reduce possible dilution. Making the share price look better is a side effect.
Don't get me wrong, I do think CNL has a very good deposit. But i prefer to buy it when it is closer to production. It will still take a long time for them to construct the mine, during which time they will be increasing debt and losing money with negative earnings. And possible share dilution to raise more cash. The opportunity cost is high during the wait, when that money can instead be invested in another company making profits now.
Max_Value wrote: Just some quick facts about Gran:
- only 3 mio on cash left
- total debt more than 200 mio
- only about 25 mio netincome 2016
So, how do they wanna pay back the debt????
- only 400k m&I ounces left (Segovia), only resource, no reserve, no economic study?
- Marmato Project only hosts resource, 10 mio ounces but low grade, no reserves, no economic study? can they turn it in money?
To sum it up, the got huge debt and therefore huge finance costs, they make almost no cash and running out of ounces (nobody knows if its economic to recover those ounces , cause there are no reserves, no econmic study)
Market cap is only 30 mio, thats due to the fact, that they are broke, almost bankrupt.
No chance to surive. Thats why they only got a market cap of 30 mio. Imho still to much for a broke company. By the way, any insider buys due to that huge opportunity buying such a undervalued company. lol. sorry bro, but its funny to compare it to CNL.
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