RE:RE:RE:Ana Paula is insanely undervalued. Alio is now deep value.asforecasts wrote
Yes, they will not develop AP for awhile. Once mgnt is confident on cash flow from Florida Canyon they can start thinking of debt to develop AP. There is no debt on balance sheet now. Waiting on cash flow to pick up to the point of financing AP development is probably not realistic. I hope they don't stream or partner. Partners tend to get the better end of the deal, money up front and 40-50% of net gold forever...
AP is basically being put on care and maintenance. Capex should be minimal, total expense less than $200,000 annually. San Francisco will not be processing any ore, only operating heap leach, capex $200,000 annually. Minimal salaries.
So Florida Canyon will have 2 heap leach stacks.
2019 Q1, the last normal quarter: Single stack produces 12,000 oz gold and 8,600 oz silver with co-product AISC of $1220. Dual stacks fully operational Q2 2020 producing 24,000 oz gold and 16,000 oz with co-product AISC of $1100.
With 1.5mil admin cost, only $400,000 capex for San Fran and Ana Paula, $500,000 equipment loan and interest, 0 for exploration...total overhead is 2.4mil per quarter.
24,000 oz * 1400 = 33.6mil revenue
24,000 oz * 1100 = 26.7mil AISC
6.9mil operational cash flow
minus 2.4mil overhead
free cash flow 4.5mil per qtr
Ignores non-cash (depreciation, currency adjust, derivatives, deferred taxes).
Does not include additions to revenue from heap leach at San Fran, but this will die out in 2020.
4.5mil per qtr is not enough to finance development of Ana Paula. Once you make a development decision it is not wise to take the slow approach. Costs have a habit of running away the longer that the build out takes.
However, showing steady free cash flow will allow financing at much lower rates than this company can get today.
Anyway, this is a napkin estimate and I welcome comment.
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Going by their just released 2020 forecasts it looks like your numbers are way off. They are forecasting 60 to 70 thousand ounces from Florida Canyon at cash costs of aprox. $1025 average of their estimates. Add other expenses to get AISC and the number will ber closer to $1150. So they will make aprox. $ 20 US from Florida Canyon at todays gold prices. San Fran costs are at $ 1750 because of $16 million in inventory costs whatever that is. So that will cost them $4 million from their Florida Canyon profits so they should net aprox. $16 US or $20 million Canadian in cashflow in 2020 if i am reading the number right. Not that much but not bad for a company with a $70 million market cap.
And as others have pointed out lets not forget Ana Paula as other have said. Their AISC is in the low $500 range so at todays gold prices they would be making over $900 US per ounce on the projected annual production of aprox. 116 000 ounces what would equal aprox. $103 million US in cashflow or aprox. $135 million Canadian at todays gold prices. Add that to Florida Canyons $25 million cashflow and we will have a company with free cashflow of aprox. $160 million Canadian dollars per year. And all that with a market cap. currently of aprox. $70 million. The only thing holding us back is the $220 million in capex that Ana Paula would need. With the projected cashflow of the two mines operating the payback would be less than a year and a half and then its all pure profit frome there.
No wonder Sprott invested in this company. He sees what they have. I would not be surprised even as soon as next year to see Sprott and Alio do some kind of a financing deal to get Ana Paula moving and into production. And if not them maybe someone else.
Especially at these gold prices ther is just to much money to be made there for something not to happen.