What $ 1 invested in African Gold Group is worth To allow you to see, overall, what $ 1 invested in African Gold Group is worth ...
In the balance sheet, you can see that AGG has secured a little over the years of $ 68,000,000 in equity financing. To this amount, you can already add the latest funding which resulted in approximately $ 5,000,000 additional. So the total is $ 73,000,000.
The question you need to ask yourself is: What are the assets that African Gold Group has created with this money over the years? The answer is the development of the Kobada permit, its 43-101 technical report and its mineral reserves.
As a license grows with luck and a lot of drilling, ask yourself if that $ 73,000,000 has created enough shareholder value. To better understand the magnitude of the amount involved, tell yourself that a meter of borehole analyzed costs around $ 100. Despite the fact that we know a company has all kinds of expenses, AGG had a budget for 730 kilometers of drilling. On this basis, do you believe that AGG delivered the goods? If your answer is NO, then you will be able to better understand the reasons why financing now involves a very significant shareholder dilution. The financial report presents the ability to create value with the amounts invested. For African Gold Group, this is particularly disappointing.
By comparison, ROBEX secured total funding of $ 71,000,000. This money now allows to operate a plant that produces 50,000 ounces per year, with free cash flow greater than its debt, and mineral reserves for the next 10 years. Considering its EBITDA of $ 70,000,000 / year, Robex pays dividends, gradually increases the production capacity of its plant and determines new reserves to offset 150% of the ore mined.
This comparison is not at all intended to guide your investment choices. I just want to let you see the gaps. I fully understand that AGG currently has larger mineral reserves than Robex. I also understand that Kobada could potentially produce 100,000 ounces of gold / year. Kobada is definitely a great asset. Unfortunately, this asset is sleeping soundly and to wake it up would require AGG to be able to get $ 200,000,000. This is a significant sum compared to all the money she has been entrusted with in the past and for which she has not been able to administer with the utmost care.
African Gold Group is now caught with a gloomy history, which will not help Mr. Callow secure financing on suitable terms. Persisting in this direction will not make the money show and AGG will continue to become mired in its endless dilution of shareholders.