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It is but not on any real volume at all, not as of yet anyways. I wish I could post my screen capture on here, nevertheless I guess what occurs with the FOMC meeting will dictate todays price action. That combined with some bigger equities like Boeing, Apple etc showing weakness could and will show an affect on the over all market "which" could lead to a gold bid or two.
I hope you have some questions ready and will be up front and direct with them if you get a chance to ask. If you are looking for any input... pose it to the board during the day and perhaps members can post some good questions. I know I have one, probably the same as most of the members. In a nut shell, What are they going to do about share price and delisting if s/p continues to lag below 0.20??
You're welcome. Its trading at 1121.10 as we speak. I expect a big increase in the pog tomorrow.
Quite a bit of volume today, considering approximately less than half the day complete.
Actually I am not 100% sure but as I was viewing the charts and the action involved I was suspecting something like that because of the share price action involved. The size of the trade and share price are very similar in more than a couple of instances today. Which could me something (or nothing). We as traders at the moment have nothing to do with what is going on here (not much influence anyway), at least not today. I think there is some fund action (trading/transferring) happening right now between them. JMO
I have been looking at that very closely, on 1 min, 5 min, 1 hour charts for today as well as the month. Today so far I can confirm that there is a positive money flow occurring in the stock. So ---- more buys than sells
Fair enough. Thanks for responding.
Hey Pharaoh, do you mind telling us how many shares you let go and what time period to do so?? It would give us an understanding of the stock movement profile over the course of this. I understand if your not interested in doing so. Thank you and Good luck.
New England and Arizona ;)
So what do you see??
I am not exactly sure but I think the rainy season spans 2 quarters, Q4 and Q1, I could be mistaken however. Also, El Nino apparently has played a part and increased the "average amount of rain during the rainy season" as a result.
Yes, but an accomplishment that both mines are at commercial and any problems that delayed the process for Namoya have been resolved. Now we move forward with bigger numbers next quarter with the Cats 777 operating for the full first quarter of 2016 and perhaps moving out of the rainy season.
The important part is that Namoya is Commercial. !!
I agree with you and its funny you say that. I just read an article stating "Gold down on upbeat USA data". Upbeat USA data?? What a crock of sh*t. The USA government last week admitted that they made a mistake calculating a decade's worth of construction data. hahahaha... upbeat usa data. sure
That's right, I meant and should have said that.
A pretty good close with decent volume for the day. Looking at other comparable juniors we are at par for share price (%)movement today or slightly better. From my understanding juniors tend to lag in share price movement in comparison to mid and large tier Gold miners when reversals are taking place. They will catch up as long as the reversal continues.
Gold moved above 1100 and hovering in the high 1090's to low 1100's. That's two days in a week that the circuit breakers have been triggered on the Chinese/Shanghia exchange.
Interesting article on China and Gold activity.
https://smaulgld.com/china-flexes-its-gold-muscle/
Yes they did you are correct. Many countries did or just didn't adhere to the carbon tax and the restrictions. I did a research paper back in 2009 - 10 on Kyoto and carbon tax etc. I was really up to speed on it back then. I have since not paid much attention at all and wouldn't consider myself current anymore on Kyoto, carbon taxing etc.
The USA also pulled out back under the Bush (GW) administration 2001 because it was to costly, restraining.
Here's a quote from George back in 2001 regarding Kyoto and the US Government's take on the protocol "an unrealistic and ever-tightening straitjacket."
Enough of this... this topic as gone off the rails. Started talking about Hydro electric in the DRC and ended up with a quote from GW Bush. lol.
I'm tapping out of this convo.
That's a good point, "how long until Banro's low AISC starts being worth more than what it appears to be?" I am not exactly sure but you would think that it should factor in favourably if there is an extended period of low pog or a further drop in spot price to below 1K or more. I also feel that we have seen our low pog but never underestimate the USA gov., the FED, big banks to continue to manipulate. There also has been a lot of talk about one more push down in the pog. I don't know what will happen with all certainty, but I do think we have been or are near the low for pog.
Check out this article about the "So called great unemployment rate" in the US
http://www.zerohedge.com/news/2016-01-04/straight-face-us-government-finds-number-retiring-20-24-year-olds-has-doubled
Yes you are right, there is movement to dismantle dams. And there was world wide movement with Kyoto and climate change as well and what happened there??? Most countries/companies could not adhere to the restriction placed on them to decrease carbons etc. And many of these were first world economies that could not financially shoulder that burden and continue to stay afloat or profitable. That being the case, many countries left Kyoto all together and some rejoined later with less restriction on their manufacturing/emission. Some companies continued as before and just paid the carbon tax or fines if they exceed their carbon restriction. Not to be a radical of any type but if there is money to be made then they will find a study (or make one up) that backs the claim that damming a river for what ever reason is viable for the local/regional economy with minimal strain on the ecology. The DRC is pushing for mining, it is basically the only thing the country has to create any form of extensive wealth for the country and its people. The mining industry creates jobs, and most of the jobs are of higher wage than what a worker may find elsewhere.
Yes perhaps if the pog goes much lower and stays lower for a prolong period of time we may need another deal. But I also feel strongly that they will get another deal if BAA happens to need one down the road. Its a matter of time before pog turns upwards for a consistent and extended gain. We know it, BAA knows it, and the financial institutions backing BAA as well as the DRC government know it. It may happen sooner than later, but inevitably it will happen.
Staying Long BAA and will most likely add if weakness in the pog/baa force share price down to the mid to low teens. Unless something drastic changes with fundamentals or political this is just a waiting game now. Waiting to reap the rewards of two mines that are just starting to approach the potential they are slated for.
Nagoya, here is the entire article. Some of the charting and table formats have gone array during the copy and paste process. However the entire literature is there for reading.
enjoy.
Banro Raises Almost $100M - Does This Mean The Company Is Now Out Of The Woods?
Jan. 5, 2016 12:04 PM ET
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8 comments
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About: Banro Corporation (BAA)
Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)
Summary
•Banro was running on fumes and needed a fresh cash injection - which it has now found.
•75% of the refinancing consists of equity and equity-related investments, as Banro's ability to add more debt to the balance sheet was limited.
•I consider a term loan with an interest rate of 8.5% for a DRC project pretty decent.
•Additionally, based on the current gold price and expected production rate at Twangiza, the payback period on the streaming deal will be quite long.
•Taking everything into consideration, I don't think Banro could have negotiated a better deal than what's currently on the table.
Introduction
Back in 2015 I have written three articles wherein I kept an eye on the developments of Banro (NYSEMKT:BAA) as the company's operations looked pretty interesting (and even intriguing) but the balance sheet could use a decent clean-up. Even though Banro is a small company, these articles immediately drew almost 40 companies and I promised my dear readers to keep them posted on my expectations and views on the company.
BAA Chart
BAA data by YCharts
Banro has recently released an invasive financing package that provides a total cash injection of almost $100M to reduce the working capital issues and to provide some additional liquidity to the company.
Breaking the financing deal down in parts
It sure looks like Banro needed several months to complete the negotiations which will basically provide a cash injection of almost $99M. The majority of the cash will be injected through a debt and equity issue, but there also is a streaming component. I'll break the financing deal down in parts.
A) The debt
Banro has entered into an agreement with RFW and with funds managed by Gramercy whereby Banro will borrow an initial $22.5M as part of a term loan at an interest rate of 8.5% in the first two years of the issue, followed by 3M LIBOR + 8% after the second anniversary of the term loan. What's interesting is that this is initially a short-term loan (repayable on November 30th of this year), but the maturity date of this term loan can be extended by up to three years if Banro continues to meet certain financial standards. This basically means the term loan will be a current liability throughout the entire term and will always have an impact on Banro's working capital position.
Source: company presentation
Additionally, RFW and Gramercy have entered into agreements with existing debtholders of Banro, and have acquired $40M of senior (secured) bonds and $20M of preferred shares that were issued in 2012 and 2014 respectively. This basically means RFW will be on the hook for approximately $82.5M in debt (and preferred securities) of Banro, and that's a pretty big commitment if you'd ask me!
B) The equity issue
Of course, in any debt situation, the upside potential for the debt investor remains limited and the best case scenario consists of receiving all interest payments as well as the principal amount of the loans. That's why it isn't surprising to see RFW also asking to be allowed to purchase shares. As part of the agreement, Banro will issue 50 million new shares to raise $8.75M, and a basic calculation learns us this equates to $0.175 per new Banro share. This might sound cheap, but it actually was the market price right before the deal was announced, so it doesn't look like RFW got a real bargain.
C) The streaming deal
The streaming deal probably is the most important part of Banro's recapitalization program. As its ability to add even more debt to its balance sheet was limited, Banro had to raise the cash as part of some equity-related capital raise. Of course, as a 20% dilution raises less than $9M, Banro had to be creative in finding more cash.
Source: company presentation
A streaming deal really was the only option left. The buyer of the stream has wired $67.5M as a prepayment for the current and future gold production. As long as the gold price remains lower than $1150/oz, Banro will have to deliver 12.5% of its total gold production for an ongoing payment of $150/oz. The percentages will be slashed by 50% after the Twangiza mine has produced 1.14 million ounces (which should happen by 2024 based on the current production rate). Banro has the right to repurchase the gold stream after the third anniversary by making a cash payment resulting in an internal rate of return of 17.5% for the buyer of the stream.
So what does this mean for Banro shareholders?
Banro knew the majority of the fresh cash would have to be found as part of some 'equity' solution as its net debt position (short term + long term debt - cash ) was $180M (excluding the preferred shares), which already is quite high.
Source: company presentation
First of all, the term loan has pretty good terms as an interest rate of 8.5% for a DRC-based gold mine in the current gold climate is actually pretty good (considering Banro isn't exactly a debt-free company either). The interest expenses will increase by less than $2M per year, and that's a small price to pay!
The equity infusion will have a bigger impact as the future profits and cash flows will have to be shared over 302M shares instead of 252M shares. That's a 20% dilution, but again, Banro didn't really have another option…
Source: company presentation
The streaming deal actually also looks pretty decently structured considering the geopolitical risks of operating a gold mine in the DRC which isn't exactly a first tier mining country (and yes, that's an understatement). Based on an undiscounted and pre-tax calculation, the buyer of the stream would need approximately 4.3 years using an annual production rate of 140,000 ounces per year (a pretty aggressive assumption, considering the production rate will be lower as you can see on the previous image) and a gold price of $1050/oz:
Net Operating CF
Corporate TaxRate
aftertax value
Discount rate (0%)
DCF
-67,500,000
0%
-67,500,000
-67,500,000
15,750,000
0%
15,750,000
1.00
15,750,000
15,750,000
0%
15,750,000
1.00
15,750,000
15,750,000
0%
15,750,000
1.00
15,750,000
15,750,000
0%
15,750,000
1.00
15,750,000
15,750,000
0%
15,750,000
1.00
15,750,000
15,750,000
0%
15,750,000
1.00
15,750,000
15,750,000
0%
15,750,000
1.00
15,750,000
If you'd apply an 8% discount rate (which I'd think is even quite low considering the location of the mine), the payback period would be approximately 5 years.
Net Operating CF
Corporate TaxRate
aftertax value
Discount rate (8%)
DCF/yr
-67,500,000
0%
-67,500,000
-67,500,000
15,750,000
0%
15,750,000
1.00
15,750,000
15,750,000
0%
15,750,000
1.08
14,583,333
15,750,000
0%
15,750,000
1.17
13,503,086
15,750,000
0%
15,750,000
1.26
12,502,858
15,750,000
0%
15,750,000
1.36
11,576,720
15,750,000
0%
15,750,000
1.47
10,719,185
15,750,000
0%
15,750,000
1.59
9,925,172
The inflowing $99M in cash will definitely help to boost the cash position from the silly $4M Banro had left as of at the end of September of this year. The working capital position should increase from a negative -$58M to a positive $18M (a pro forma calculation based on the financial situation at the end of the previous quarter).
Investment thesis
I don't think this financing deal will be a complete surprise for the majority of Banro's shareholders, as everybody agreed that 'something' would have to be done to give the company more room to breathe. After now having analyzed the terms of the recent financing pretty carefully, I think Banro got a pretty sweet deal, considering the circumstances. An 8.5% interest rate on a loan is pretty good for ANY DRC project, and a payback period of 5 years on the gold stream agreement is also pretty good for Banro, considering I used extremely conservative inputs.
I used a gold production rate of 140,000 ounces at Twangiza whilst the average production rate will very likely be just 100,000-125,000 ounces per year in the next few years, so the real payback period (using an 8% discount rate for the streaming company) will very likely be in excess of 6 years. So, yes, this is a good deal for Banro.
It looks like the investors in the stream (with a Chinese fund as main participant!) are betting on an increase in the gold price in order to generate a meaningful return on their investment. After having combed through all of the details of this deal, I think I can say this is a good deal for Banro, and it's actually a better one than what I would have expected! Now Banro has plenty of cash to ramp up the production rate at the Namoya mine, which holds the key to a successful future for Banro.
Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.
I think you need to sign up to be able to read the entire article. You should sign up, it is free to be a member and you are able to read the entire articles and search other companies if interested in them.
Interesting article written on the recent financing deal
http://seekingalpha.com/article/3790956-banro-raises-almost-100m-does-this-mean-the-company-is-now-out-of-the-woods
Today would be a perfect day to announce full commercial production with Namoya. Although I do feel it will come in a week or two.
Interesting news. Who from IR were you speaking with?
I haven't done any estimating at all this quarter. No number crunching. I have tossed out a number of 56666 oz just for the sake of putting one out there. And the fact that I think the CAT 777's having some work time this quarter that over all gold output should increase, obviously. When we get a closer to the end of the quarter I will take some time and see if I can come up with a more accurate number versus the guesstimate that I threw out there.
Ok, no problem. GIS is Geographic Information Systems. Computer mapping and positioning etc . When I noticed you wrote Map overlay I thought you might have been involved in computer mapping etc. I have some knowledge in that field. Went to school for Geomatics and took a lot of GIS courses and lab work. Worked in a GIS department for a little while as well. Anyway.. off topic.
Go BAA
Team I noticed you mention "overlay". You wouldn't by chance be involved in GIS would you?
I want in on this. My prediction 56,666 oz
Gold making a move this evening. $1089 at the moment, lets see what happens by the morning. Maybe it will hold but I doubt it.
Thanks for posting. What publication did you get this article from?
Thanks in advance
So was that you Tex that dropped ~ 180K shares?
Don't forget Conference Call at 11:00 Est this morning.
Q3 2015 Financial Results Conference Call Information
Toll Free (North America): +1 877-291-4570 Conf ID: 78819755
Toronto Local & International: +1 647-788-4919 Conf ID: 78819755
Q3 2015 Financial Results Conference Call REPLAY
Toll Free Replay Call (North America): +1 800-585-8367 Conf ID: 78819755
Toronto Local & International: +1 416-621-4642 Conf ID: 78819755
That's ok. Just hold and accumulate in this area. Its a matter of time. Another quarter or so and then big moves will occur.
Nice volume this morning. Expecting the close to be high 0.19's to high 0.20's if gold stays constant or continues its move here.