outlook 2017 + improve capital structure
a big PR out this morning, we finally get our 2017 outlook but also an update on how they want to proceed with their debentures. outlook: *** 2017 : estimate to produce between 150 and 160k ounces. remember, in 2016 they were very conservative with their annual target, revision upwards a few times during the year. ** GCM sees a cash cost of $720 per ounce in 2017, the AISC is slightly higher as they increase exploration. ** Speaking off, in the coming weeks both exploration/drilling updates are to be expected for both Segovia and Marmato. GCM improved their working capital, which was more than overdue and the most important point to tackle. It is my read that all free cash flows can be used to pay down/buy back debentures. They do a reverse split of 10 for 1, probably most of the (Canadian) retail investors wont like this, but I think this is a necessary and good thing to get mature again on the stock price. In a next step they will propose to extent the 2020 debentures and this on a voluntary basis. They will up the interest percentage paid from 6% to 8%, which is in the bigger scheme of things more than doable ($2mm extra on annual basis). => the debt extension will give them more relief on the operational side of things. All in all good things. The more aggressive speculator might be disappointed here on the corporate update, but let us be honest, a takeover was never a reality. Nothing has changed, GCM will get better by showing and performing from the operational side. I see high margins that should be able to pay off debt. Even taking into account full conversion, this stock trades very cheap versus peers of the same side. I am long GCM, and happy to hold them on.