RE:RE:RE:RE:RE:RE:$1400 AISC?auburn2,
I have no doubt that TGZ is a great stock to own for the long run. Acquiring Gryphon gives Teranga a much greater exploration capability. My concern about TGZ is short term. It has a high volume low which is untested, and I will be buying on a retest of the low.
On the fundamental side, I did a spreadsheet of Teranga Gold's mining plan and didn't like two aspects, namely the front loading of high grade ore, and second is the use of the stockpile as a piggy bank and the practice of using deferred stripping to pencil whip their balance sheet to show whatever management likes. If they want to report a loss just cut back on deferred stripping, so these guys are managing the financials to smooth out cash flow. which is why we had over 4000 ounces of gold that didn't get sold in the quarter last quarter. So my question is the CEO running the company to benefit David Mimran, and will he screw the pooch on Q4 financials in order to give Mimran a better price on his shares?
Here's my best shot at TGZ financials for Q4 based on the reduced guidance from management. In my estimation it will be a penny per share profit, and that is assuming $4 million in extra cost from Gryphon exploration and G&A. I have no clue as to whether there will be merger charges which result in a loss, but my short term concern is whether they have an adequate mobile fleet to carry out their mine plan, and whether some of this money that they just raised went to that end? The other concern about Teranga is their dependence on oil to run their MRP and the huge amount of dirt that they have to move to carry out mining these satellite open pits. In my estimate for Q4 I used the $2.59 USD per ton mining cost, but per the mining plan that number should have been $2.37 USD per ton. You can refer back to the Q3 MD&A which I tried to follow as closely as possible. Here's the TGZ calculation:
Regarding Orvana Minerals, please go over to the USA.TO board and read the post that I made on that board. I own both stocks by the way, and my gut tells me that Orvana Minerals may be in play. On Orvana Minerals, it took me a year and a half to develop a production model for Orvana which works. Here's my spreadsheet for Q4 2016 Orvana results, and then the summaries for my calculations on Orvana revenue and cost for 2017.
My own conclusion after having looked at the Q3 results of other miners like GORO, USAPF, EXN, GPL is that Orvana is a far better stock to own. For one, nearly every silver miner that I know including ASM has printed extra shares in the last 6 months diluting their existing shareholders. ORV is one of the only stocks that hasn't added shares. And Don Mario has a natural gas line running to the plant so there is ZERO dependence on oil for power and services at that mine.
On Orvana, I have the same concern about whether management is screwing the pooch on this stock in order to keep the stock price down. So why did the previous management tell us that the mine life at Orvana was only a few years, causing many longs to dump their shares at 38 cents. Then 2 quarters ago in May, we had that massive sell off after management came out with this discussion about a going concern. Meanwhile, Samsung was doing their due diligence on offtake agreements! So have they been managing the stock to keep the price down by putting out "high" numbers on mining costs, so that their buddies at USAPF can take the stock out in a take under at dirt cheap prices? Hang on to your ORV shares is all I have to say.