Cerrado Gold Inc V.CERT

I watch the value of gold go down and ...

[ABDPhil]

We can already anticipate all the pressure that will be exerted on the CERT SP. Ideally, the gold would have to move north again so that Cerrado could possibly consider a positive casflow. If Cerrado succeeds in its bet of reducing its costs, what will remain of its cash flows when it has reinvested part of it in its boreholes and in the modernization of its facilities?

Be careful because a company that cuts costs will never achieve the same results as one that has built its structure of operations with this in mind.

 

Still under the theme of prudence, the fall in the price of gold puts additional pressure on the already very low level of its cash flow. $ 8 million in this context, it disappears quickly. Consequently, the fear of early financing is growing.

[Mulli15]

Thanks Phil. I didn't realize the price of gold dropping could be such a headwind for a company like CERT. Let me guess RBX will be fine though :)

[ABDPhil]

To admit that Robex will be fine is overkill. To say that a low cost company such as Robex is less influenced by the volatility of the price of gold is quite true.   But if the value of gold rose rapidly to $ 2,500, the SP of companies such as Cerrado would benefit in the short term. Going from negative cash flow to positive cash flow in a convincing way must necessarily be reflected in

[Mulli15]

The CEO hasn't let us down yet if he says AISC in Argentina will be sub 1000 by year end, I have to believe in him.

[ABDPhil]

If you trust the CEO of Cerrado, that's okay.   If you are confident that the cost of production will be able to fall below the $ 1,000 mark, that's okay.   If you have confidence that the management team will not resort to equity financing to optimize their production costs, that's okay.   If you have confidence that the reduction in its costs will not be

[Mulli15]

you bet Phil! I believe the CEO has hit his marks and will continue to do so. He has also had a successful past. If you have watched any of the interviews, they bought the Argentina mine from a company that didn't know what it was doing and the CEO said it would take time to fix the issues but if they get AISC below $1000 by year end, I think that is a pretty quick turnaround.

[Mulli15]

They are knocking all your "if's" off one by one fairly quickly.