Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
In for a penny, in for a pound. The risk is, of course, that .26 is not the bottom and the share price could continue to fall, which is why I've committed less than half my available funds. The knife looks to have stopped falling, however.
I doubt we jump up until we get positive news (lower price tag and/or shorter timeline) on the way forward, but we could go up with a positive outlook on gold. Negative news (higher price tag and/or longer timeline) along those lines could drive the share price down, of course. Eventual returns have been delayed, not significantly reduced.
$22 mil plan from MDM? If so, KCA likely brought in to come up with a better one.
KCA news seemed to have halted the slide in the share price - not likely to "bounce" until final plan, price tag, timeline for meeting production targets, and financing details are announced.
That gold was down yesterday and BAA flat showed that the KCA news was positively received. If they can improve on the initial provisional plan, BAA jumps back up. I added 5,000 today, will add 5,000 more pending confirmation the share price has bottomed.
Added 5,000 today at .268, based on gold down but BAA flat yesterday, hopefully signalling a bottom. Cost basis now below .50. Have cash ready to add 5,000 more pending KCA news.
Heap leach is not below planned capacity - gravity/CIL is where the production shortfall is.
However, it seems to me, one option could be to increase heap leach capacity and stockpile excess fines (which will eventually peter out anyway). Whether that could come close to meeting production targets, I have no idea.
I'm wondering if the three-phase plan and figures were from MDM, with Banro calling in KCA for a second opinion and alternative options.
Until the KCA speaks, we can know nothing. Will they pull a rabbit out of the hat? Or something less cuddly?
Interested in balanced and realistic views. Until we know the solution, cost, financing, and timeline, all up in the air with KCA's involvement, I don't think anyone can tell whether we've hit bottom or will continue to fall.
Having fallen this far, it is pointless to sell now (I'm down 50%). It is encouraging that we're flat today, despite gold having taken a hit.
Cost is the issue, whatever the solution. The question is how to increase processing of the fines, which will eventually cease to be a problem.
The problem is that the CIL circuit doesn't have enough capacity for the volume of fines they need to process:
The cyanide "heap leach only" method is an alternative to the "carbon-in-leach" (CIL) method. Banro had planned originally in 2007 to use the latter at Namoya, but switched to the former in 2011.
See: http://www.proactiveinvestors.com/companies/news/11706/banro-corp-announces-pea-results-for-namoya-project-in-drc-63-projected-irr-11706.html
Here's an article, "Precious Metal Heap Leach Design and Practice," by Daniel W. Kappes (of KCA):
http://www.kcareno.com/pdfs/mpd_heap_leach_desn_and_practice_07apr02.pdf
A couple extracts:
Beware of conviction bias - looking only for reasons why a stock will go up, because you're so heavily invested in it.
With BAA, due to its geo-political risk, bad news is amplified, while good news is dampened. Only unequivocally good news is going to shoot this stock back up.
I've got money to put in, but want some assurance we've put in a bottom and won't be sinking lower.
Many have averaged down from a much higher share price (I've bought in the .60s, .50s, and .40s). The more shares one is sitting on, the less impact averaging down has on one's cost basis.
The share price has fallen because of a failure to meet production expectations (first due to heavy rains and now plant problems). Given Banro's geo-political risk discount, any bad news is amplified. If Techamental is right, we may have to wait until October for good news on the production side.
I have no intention of selling, but am hesitant to throw more money in until I have a clearer picture of what Banro's plan is and what its advantages or drawbacks might be. What might be best for the company longer-term need not be good for shareholders over the shorter-term.
"I'm hoping for either a sale or a JV because I'd like to see Banro move up above a dollar and out of this danger zone they are in. They are in a danger zone because the AMEX is affording them a lot of latitude in keeping them listed at their current PPS."
Which would seem to argue against a dilutive stock offering, I suppose. I've got some money ready to throw in, but want a better idea of whether we've hit bottom or not. Back up over .35? Or down to .25? I'm willing to sit on my shares for a couple years to see a return, but don't want to just dig a deeper hole.
"Banro's big problem is they need to cover $32M in debt charges over the next 12 months including dividends for preferred shares.
A streaming agreement could be timed to kick off only once a certain production target is reached, so that near-term returns could be dedicated to lowering the debt load.
[Been on vacation, thus the delay in responding.]
"I believe China is no longer as eager to loan us money not because the dollar is weak but because lenders make money on interest and interest rates are near zero."
My point was simply that I don't see China having any interest in sinking the dollar, which would only hurt their exports and drive up unemployment. (Providing employment is part of the social contract that under-girds the Communist regime.) Whether they or we like it, we're tied at the hip.
I do see them trying to protect their favorable trade balance against pressure from the U.S. and Europe for them to appreciate (or strengthen) the Yuan. That their response to a weaker U.S. dollar has been to further weaken the Yuan reflects that concern.
Making trade agreements such as with South Korea, allowing transactions using the two countries' currencies rather than the dollar makes them less vulnerable to a weaker dollar. I do think their motivations are primarily defensive, rather than aggressive.
I do think that inflation in the U.S. is inevitable, which equates to a weaker dollar. Yellen signaled she'd be prone to let inflation run without raising interest rates, as long as real unemployment remains high.
I'm far from claiming I have a clear picture on all this - just trying to connect a few of the dots.
Another alternative could be a capital infusion through a gold streaming or royalty agreement with someone like Sandstorm. That would avoid adding debt or diluting the stock. Or maybe they do a combination of all three.
With Namoya we're basically looking at delayed returns (1 to 1 1/2 years?) at a somewhat higher cost. Other than that, the gold is all still there. Selling it all off would be a bit rash - selling a small fraction of its eventual output, however, could cover current costs.
Not sure I entirely buy the "war on the dollar" thesis. Drops in production (supply) in China are largely due to lagging consumption (demand) in the U.S. Sinking the dollar would harm the Chinese economy almost as much as it would the U.S. economy, and could even end up sinking Communist Party rule.
China has pegged its currency to the dollar so as to make its exports more competitive, but is under pressure both internally (from a growing middle class) and externally (from the U.S. and Europe) to increase consumption and imports. The U.S., on the other hand, wants to increase production and exports. Doing either, however, could exacerbate unemployment in China and inflation in the U.S.
They were also assuming $1,500 gold...
Was that "all-in" or "all-in sustaining" costs?
Much easier to speculate on holes in the ground than actual production. Probably wasn't realistic to expect bringing two gold mines to full production in the eastern Congo touble-free. It was uncharted territory...
Like I said, he's a basher...
The numbers he's citing are from Fidelity Investments, which are way out of whack with any other source (Morningstar 81%, MSN Money 79%). See:
https://eresearch.fidelity.com/eresearch/evaluate/fundamentals/ownership.jhtml?stockspage=ownership&symbols=BAA
Over on the Yahoo board, some basher is claiming:
What's held BAA down is that the critics (analysts?) will hang on any "mixed" news, whether weather slowing production or debt threatening the bottom line. What's needed is unalloyed good news.
Production update next week? Last year it was on July 10th. Might that also be when we hear about Namoya?
Well, the longer-term trend (the last year or so) is for a weaker dollar, which is good for gold. What the "longer-longer" trend will be, say one to three years down the road, I have no idea.
I doubt that LNG/CNG exports will drive the value of the dollar, but a weaker dollar would help them be more competitive against Russian natural gas delivered by pipeline to Europe and Asia.
Euro vs the dollar is up 1.13% since June 11. That it is up 4.79% over one year argues that this is not just a short-term trend, and that the recent strengthening of the dollar (May 18 to June 11) is.
Plus a weaker dollar is moving gold higher.
Well, if you had invested in BAA and NUGT two years ago and held until now, your BAA investment would be down 87%, but your NUGT investment would be down 92%. Of course, we're not investing two years ago...
NUGT is, of course, a good deal more volatile than BAA, which is plenty volatile itself, which means the shorter the timeframe, the more inconsistent (and meaningless) the comparison.
And BAA.TO up...
That BAA can be moved down or up in intraday action means next to nothing.
According to the supplier's site, Banro required 600,000 to one million liters of fuel a month. Not clear to what degree the commissioning of Namoya might increase that requirement. See
http://dalbitpetroleum.com/mining.html
"I didn't apply correlation BAA to NUGT, which is not in
favor BAA as well."
Well, I'll wait and see how BAA does with positive earnings from two fully commissioned producing mines (soon), before deciding what is or is not "in its favor"...
Price/Book Value: BAA .24, GSS 2.99.
Book Value/Share: BAA 1.94, GSS .20.
Guess which has the MUCH bigger topside? Uh, not GSS.
I see it as a value bet, with the bottom a whole lot closer than the eventual top. I have no idea whether it is a $1, $2, $5, or $20 stock - all I know is I'm very comfortable with a good chunk averaged in under 54 cents. I have no timeline other than a one to two year horizon.
Saying that, minus good news, BAA needs gold to go up to appreciate is not the same thing as saying that BAA always goes up when gold goes up. BAA, due to its cap ex and geopolitical risk can stay flat or fall relative to the price of gold.
The closest co-efficient might be NUGT (3X gold miners ETF), which BAA has roughly tracked over two years, with BAA down 88% and NUGT down 92%, although NUGT is more volatile than BAA. Over the last month there is a significant spread between the two, with NUGT up 51% and BAA up 7%.
Sell the rumor, buy the news is better than
.
.
.
buy the rumor, sell the news.
Maybe they're buying gold to cover their fake transactions...
Over 1321...
Cost basis of $1.12, currently up 21%.
http://seekingalpha.com/article/2245563-a-few-simple-events-will-help-solitarios-value-immensely" rel="nofollow" target="_blank" >http://seekingalpha.com/article/2245563-a-few-simple-events-will-help-solitarios-value-immensely
And TGD, AKG, and RBY were all hit the same way at close, with price jumping back up after hours. Someone unwinding their speculative short positions, now that gold sentiment looks to have turned?
First post here, but have been lurking for a few months. Great DD.