To date, I believe that the low valuation of Robex can be explained in several ways, including the low visibility of the company in the market; the residual part of the financing to be concluded; the steps and time required before obtaining gold production from his second project; and for the skepticism that some people have about the Kiniero project.
Concerning the improvement of Robex's visibility, efforts are invested and I am confident that over time, these efforts will have their effects, especially if they are supported by convincing results.
For financing, it is never an easy step in the mining sector and this is even truer when it concerns a project in less politically stable territory. In this context, credibility; the stability and experience of the management team in these areas is important. At the head of Robex, there is a team that fully understands the requirements of its potential financial partners, and how to create an ideal economic environment.
Fundraising is not just a race, but a relay race. The latter began a few years ago with the deleveraging of the company; continuous improvements for overall plant performance; acquisition of human resources qualifications and responsibilities; and finally, obtaining economic results for Nampala that leave no doubt. Thus, I believe that the Cohen team, and other members of management, are qualified and well supported by the results to obtain the approval of the financial partners.
From here to the first gold production, a dozen months will pass. For many investors, it is very long while for others, it is the time necessary to be interested in it. The long-term investor is patient; learn; understand; and in the presence of an opportunity, he does not buy his shares in a single day. Consequently, most of his remuneration is obtained in a context such as the one we currently have. As unpleasant as it is for the short-term investor, it is a perfect environment for the long-term investor.
For Kiniero, the skepticism that some people may harbor is normal, and we need to talk about it. It should be remembered that this project was first abandoned by Semafo, and taken up after several years by the Sycamore group. Said thus, many investors may hastily conclude that the abandonment of this project and the period of inactivity that followed, is a demonstration of the risks that this project entails.
As all projects involve risks, I believe that Robex has made every effort to mitigate them. In particular, by ensuring that Nampala can financially support the Kiniero project; that the financial environment makes it possible to manage contingencies; by issuing shares to merge the assets of Sycamore; and opting for a project that has obvious synergies with the Nampala gold mining. Robex's approach differs from Semafo's in that it operates a high-capacity plant to process low-grade gold ore, rather than a low-capacity plant to process high-grade gold ore. The Robex model is innovative, proven, and presents much better economic prospects for Kiniero, all this comes with a POG that is US$700 higher than in the Semafo era.
While plant capacity is an important parameter contributing to financial performance, it is not the only one. Indeed, I believe that Robex will be able to take advantage of the low value of mining assets adequate for its business model, and the availability of these permits. The cost of acquisition has its effects on the overall financial performance while the availability of permits allows growth ambitions to be met in a timely manner. By developing in a less competitive environment, it makes it possible to maintain an interesting balance of power and to give the opportunity to choose. For a company the size of Robex, this is definitely a good thing.
That being said, I believe that Robex's SP will appreciate in the medium term, depending on the evolution of the Kiniero project and until its start-up, while in the long term, the predictability of the financial results and the growth prospects will be elements that are better considered by investors. It is therefore in the spirit of a long-term investor that I reiterate my confidence in the team, to make Kiniero a great project, and that the SP will eventually be the consequence of the success obtained.
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