RE:RE:Institutional BuyingWrong. Most of the 2018 deb will be converting. As they pay down the debt, they pay less interest and have more cash to pay down debt faster. When the share price gets higher, they can sell some shares to get rid of the remaining debt. It is not necessary to be 100% debt free. Most gold producers retain some debt. GCM debt only looks big because their market cap is so small. When the market cap gets bigger, the debt will look smaller. It is not unreasonable for a 160k oz gold producer with an additional project to have $50m debt. That is an insignificant amount for that size producer.
The exact same thing happened to EDV. They had a very large debt relative to their market cap. All the bashers were saying huge debt, huge debt, stay away, stay away. Look at what happened to them.
1 They became more profitable with more free cash flow, lowered AISC.
2 Reverse split 10 to 1. People
crying about reverse split, just like NMI and GSM.
3 Share price rose because of improving financial condition
4 They sold shares to a large investor wiping out a lot of debt.
5 Share price went from around $6 to peak of $27 (currently $22.5)
6 Investors laughing to the bank.
People were saying it would take more than 10 years to pay down EDV's debt. I remember it clearly because i have first hand experience arguing with those bashers lol.
Look at EDV cash and debt now. They almost cancel each other out. Their current $150m debt looks a lot smaller now that their market cap is much larger. See? They didn't have to pay down their debt 100% for their share price to have a multi-bagger.
This has happened before. It is not new.
Instead of being a rookie and bashing something you don't have first hand experience with, try to learn from
real history, not
fake history like your reverse split causes ALL companies to go down.
9rookie wrote: ts9222 wrote: We don't necessarily need to wait for intitutions to buy before the share price goes up because GCM itself is buying.
I'd like to think FCF for 2017 is closer to $20m than $15m given that production is higher in 2017, gold price is currently higher than when they made that guidance at $1225, and last 3 quarters they increased by $18m ($15m improvement in working capital paying down payables, plus $3m put in sinking fund).
Last year they didn't put that much in the sinking fund. This year there will be a lot more, resulting in a lot more buying. $20m of buying is as much buying or more than some institutions.
25% would be buying the 2018 debs which is closely linked to the share price.
75% would be buying the 2020/24 debs which is not as closely linked to the share price, but people seeing the debt drop a significant amount, and a reduction in fully diluted shares, would give confidence to the market to buy shares.
And the more they buy back, the lower the interest cost and the higher the cash flow.
If they were to pay 17 million per year off their debt , it will still take 10 (10) Years to completly pay off....so in 10 years the profits start rolling in, IF there is any gold left in the ground and the mine holds up....I am not bashing I'm just saying.