RE:RE:New hereNickelOne wrote: Teclis wrote: Hi all, I still havent bought any VGC shares but plan to do so. I really like the active discussion here. Just a short question ... H2 guidance was downgraded from 80_100k to the mid 70ies ... but did they say anything in the CC about potential Q1 numbers ... down due to equipment installation and back to Technical Report plan as of Q2? What are your thoughts on that ... did they face problems in q1 coz of liab pay back? Or do we see potential 180 to 200k ounces in 2021? Thanks and I hope to add quality here too soon and dont ask only questions... best from Germany
Before buying VGCX give some tought to following:
1. Productivity goes down, costs go up during the winter months. Winter is in full swing in Yukon and it lasts 6 months.
2. VGCX raised $55M in 2020, they have $40M of cash left on hand. Accounts payable and debt payments over the next 6 months require additional funding. They will more than likely issue some cheap shares at $7-$8/share early 2021 to keep the doors open.
3. VGCX will never reach FS targets. They missed by a very large margin all key deliverables this year (ore mined, waste mined, gold produced, cash costs, AISC). Best case scenario is 60-70% of FS numbers, which amounts 160,000 oz of gold/year
4. 60,000 oz of 2021 gold production is hedged (a hedge investing community calls the "dumbest hedge of the century"). Lower gold production, higher costs, very little upside from a higher gold price make VGCX a liability for any smart investor. They just don't cath falling knives, they got out well before Orion started unloading...
5. It just happens that mining equipment wears out - they reached mediocre production results in 2020 with brand new equipment. The problems with the chutes and liners wear will not go away, the secondary and tertiary crushing are and will continue to be bottlenecks for as long as they keep the doors open.
6. John did an amazing job promoting his book this year. Now John is waiting for Murphy...(the ones who have been around for years know what Murphy is about - John is not taking responsibility for anything that goes wrong at the mine, it is Murphy's fault). John does not realize Murphy never left site...
7. Mediocre performance shows how much of an amateur John is when it comes to running a mining operation. John covered himself with a very nice "exit package", which will be paid by the shareholders soon.
Happy investing!
A few weeks ago I took the time to provide my personal insight why VGCX was not investment worthy at that time. My opinion did not change.
Read second item on my list again, it looks like the financing I anticipated is raising its ugly head a lot sooner than anticipated.
A few notes from the Sedar document below (easy reading):
Revenues and Guidance Victoria has recently achieved commercial production at the Eagle Gold Mine however, is still in the operational ramp-up phase leading up to full production capacity. There can be no assurance that significant losses will not occur in the near future or that Victoria will be profitable in the future. Victoria's operating expenses and capital expenditures may increase in subsequent years as costs increase for the personnel, consumables, equipment and consultants associated with advancing exploration, development and production. Victoria has not yet generated revenues over a financial reporting period sufficient to fund its continuing operations.
Sales by Existing Shareholders Sales of a substantial number of Common Shares in the public market by existing shareholders, such as the September 2020 Secondary Offering could occur at any time. These sales, or the market perception that the holders of a large number of Common Shares intend to sell Common Shares, could reduce the market price of the Common Shares. This could impair the Corporation's ability to raise additional capital through the sale of securities.
Loss of Entire Investment An investment in the Securities is speculative and may result in the loss of an investor's entire investment. Only potential investors who are experienced in high risk investments and who can afford to lose their entire investment should consider an investment in the Corporation.
Dilution Additional financing needed to continue funding the development and operation of the properties of the Corporation may require the issuance of additional securities of the Corporation. The issuance of additional securities and the exercise of Common Share purchase warrants, stock options and other convertible securities will result in dilution of the equity interests of any persons who are or may become holders of Common Shares.
Good luck and happy investing!