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Blue, what I don't understand given all the positive hype and good financial news (or so it appears), why is it that:
Institutional Ownership is only: 11.08%
Increased Positions is valued at only: $446,403
While Decreased Positions are valued at: $30,837,917
New Positions increased only by: 90,963 shares
While Sold Out positions increased by: 7,735,552 shares
Seems odd doesn't it?
Braised, unfortunately you are correct. Banro has a long way to go to get themselves out of this huge debt. They can do it but it's going to take several years and the biggest factor affecting whether they can do it sooner or later is the price of Gold itself.
If we only knew where the price of Gold was going to be in: 6 months; 1 year; 18 months; etc. :)
I have to say I'm very impressed with the management of this company. These people are playing this downturn very intelligently by reducing CAPEX in North Dakota and focusing a more limited drilling program in South Texas where costs will be lower. I truly believe that US Energy Corp. will weather this downturn in oil prices exceptionally well. At these prices USEG should be a very good buy and poised for a nice comeback as oil prices begin to slowly move back towards $70-$80 a barrel, aimo.
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2015 Oil and Gas Capital Expenditure Budget
On December 4, 2014, the Company's Board of Directors approved an $8.2 million oil and gas capital expenditure budget for 2015. Under the approved budget, the Company currently plans to participate in the drilling of four wells located in South Texas during the year, comprised of two Eagle Ford wells with Contango Oil & Gas Company and two wells with U.S. Enercorp. The formation targets with U.S. Enercorp are yet to be determined pending the evaluation of our recent drilling in the leasehold.
Currently, the Company has not allocated Capex for the development of our portfolio of drilling locations located in Williston Basin of North Dakota during 2015. However, we will continue to monitor the economics of the basin and our drilling programs in particular, and if wells are proposed during the course of the year we could allocate additional funding for the drilling of these wells on a case-by-case basis. We currently participate in fifty seven 1,280 acre units in North Dakota and all of these units are held by production.
Actual timing of drilling and completing wells and the anticipated number of gross and net wells to be drilled could vary in each of our prospects. Amounts budgeted for each drilling program are subject to change based on a number of factors including, but not limited to, commodity prices, well costs, drilling and completion success, availability of capital and weather-related issues. The Company plans to fund its budget from cash on hand, cash flow from operations, and borrowings under its secured revolving credit facility with Wells Fargo, as warranted.
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Yes, correct. Didn't someone just say that the bond prices went up? Obviously it's not because they are low risk but rather because prevailing bond rates have gone down since the inception of these particular bonds.
Yes that's true, the higher the chance for default the higher the bond price will be but also because prevailing bond yields have fallen since the inception of these bonds, if I'm not mistaken.
Yes but like I said, this will only compound their debt over time because by borrowing money just to make the debt payments means additional interest compounded on top of the existing debt interest. A lot of things have to happen smoothly i.e. high enough Gold prices, maintaining a very low all-in-costs, etc., in order for Banro to eventually be able to pay off all their debt but that won't be for many years, IF everything goes smoothly.
Braised, just curios but why are you asking? If Banro's bond prices have increased it's only because prevailing bond rates have fallen but as you know, this doesn't affect the rate that Banro pays i.e. the coupon rate of 10% doesn't change.
Yes yes but again, they have $261 million in payments to make in the next 1-3 years and best income scenario puts them only at $63 million income per year but this income level would not start until 2016. They will continue to borrow money just to be able to make the payments for the existing debt. This only serves to compound their debt. It will take them 10 years or more with Gold at $1200 ounce just to pay off this amount of debt.
you're right I missed a 0! good catch. So it's $63.7 million per year. Much better obviously but it's still going to be a challenge for them no doubt.
First of all you are too high on the monthly production. As per Banro's last press release the goal for Namoya is 8000 ounces per month beginning in mid 2015. The 2014 production guidance for Twangiza, was 90,000 to 100,000 ounces...that's 7900 ounces on average per month. Thus, the total monthly production for both mines is: 15,900 ounces/month, not 20,000.
Second, you have to know the "ALL IN COSTS PER OUNCE" to produce the Gold. Based on Banro's last information provided in November 2014, the "All In Costs per Ounce" was $866/ounce. Using a Gold price of $1200/ounce gives: $1200 - $866 = $334/ounce of income (less operating costs). At 15,900 ounces per month that gives an income of: $531,000/month, or, $6,372,000 income/year. From this amount you have to deduct taxes and a few other non-operating related costs and you can see that this amount of income is nowhere close to what they will need to cover their debt.
Unfortunately, the financial picture for Banro is VERY grim!
Hey guys, I hate to be the bearer of bad news but you better learn to read the financial statements; the total debt is actually $192 million and the payment requirements are clearly shown on page 19 of 35 on the last Financial Statement from November 2014. They need to pay $18,483,000 in less than on year and $242,641,000 in 1-3 years (total P&I payments equals: $261,124,000; all due in 1-3 years!!!).
Banro Corporation
NOTES TO THE INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the three and nine month periods ended September 30, 2014
(Expressed in thousands of U.S. dollars, except per share amounts) (unaudited)
Offering Facility Total
$ $ $
Balance at January 1, 2013 154,685 - 154,685
Accretion 3,914 - 3,914
Balance at December 31, 2013 158,599 - 158,599
Debt Issued - 29,460 29,460
Accretion and Capitalized Interest 3,342 678 4,020
Balance at September 30, 2014 161,941 30,138 192,079
The table below details the timing of payments for principal and interest on the long-term debt:
Payments due by period
Less than one One to three Three to After four
Total year years four years years
Offering debt $ 175,000 $ - $ 175,000 $ - $ -
Offering debt interest 43,750 17,500 26,250 - -
Facility debt 30,700 - 30,700 - -
Facility debt interest 11,674 983 10,691 - -
Baystock, the chart link that you provided has nothing to do with the general point you are trying to make in your post.
This gold/oil chart was generated simply for investors/traders to try and create some correlation between gold (silver) prices versus oil prices. This was especially popular since the 1970's due to turbulence in oil prices during that decade (see link below).
The fact that the current ratio is in the 20's (currently 24), is not a good thing, actually it's a bad thing. As you will see from the original article and chart provided in the link below, a ratio above 21 indicates that Gold is overvalued and Oil is undervalued. Anyway, the real importance as to where Gold is going has everything to do with Gold demand vs supply, and nothing more. The Gold/Oil ratio is a nice piece of information to know for historical purposes but that's all. The chart will not tell you anything other than past historical ratio of Gold vs Oil.
Now, your point about fuel costs being lower and therefore benefiting users of energy is obviously correct and a logical argument but the chart you attached has nothing to do with this argument. The actual amount of fuel savings to Banro is yet to be determined and I'm sure they will mention something about it in the next quarterly financial report.
http://www.bullionbaron.com/2011/08/goldoil-ratio-where-is-it-heading.html
lol, this is a typical "Day Trader" tactic as well. They put up fake "ask" orders so they can pick up shares cheap...then remove the fake "ask" orders and the price goes up by a couple/few cents. Too funny how you desperate Day Traders play around with these penny stocks in order to make a few bucks.
However, Gold is not a rare earth metal. Just thought I'd point that out.
Gold is and always will be a defensive play. So don't worry, just hold and wait and see what happens when the stock market bubble bursts. It's not a matter of IF but when, and according to most experts it is expected to happen in 2015. Remember, TIME is all it takes. It's already begun via the price of oil. Do you think that oil can drop from $100 to $55 and have no other repercussions other than a drop in the price of gasoline?? The price of oil is a leading economic indicator...meaning that when it changes drastically like it has for the past 6 months there will be other market indicators that will soon surface and the full impact will be felt i.e. loss of thousands of energy jobs, further sink into deflation, etc. Keep in mind two things about the employment numbers we are fed these days:
1) they DO NOT include the millions of jobs lost during the past 5 years because most of those people are no longer job seekers and therefore are not being reported as un-employed.
2) Most of the jobs that have been created in the past 1-2 years have been in the (drum roll please)...ENERGY INDUSTRY...when oil prices were in the $100 range!!!
So what do you think will happen with a sustained $55 (or lower) oil price???
Yes, fasten your seat belts is right but not because Gold is expected to go much lower, no, but rather because of what is to come economically as a result of other market forces i.e. bursting of the "OIL BUBBLE", and with it, bursting of the stock market's current valuation.
I'm ready to buy a ton if this goes much lower.
Huh, China to help Russia and wean the world off the dollar!
http://finance.yahoo.com/news/china-s-got-russia-s-back-162022063.html
Can someone please tell how this would NOT be bullish for Gold???
Yeah but the problem is that the SP has been going down steadily since its inception on April 2012 even though energy has been going up since that time (except for the past 3 months), so why is that?
Told you guys to hold. Told you guys that the production issue was a mere hiccup typical of commissioning activities. But did any of you listen...nooooo! Oh well, live and learn.
That's the irrationality of the stock market for you. By the way, what happens on Wall street or the stock market is NOT representative of real America or what real Americans are going through and experiencing. This bubble will eventually burst just like past bubbles. Wall street has perfected the ability of creating one bubble after another, how do you think they make themselves rich. When they're ready to get out of the bubble, they will, and that's when the bubble bursts.
So far today I see around 2,350K shares on the BUY side and 1,000K shares on the SELL side. Buying out pacing selling by 2.35 to 1.
lol, yeah let's ALL short a 15 cent stock!!!!! My gosh.
Instead of relying on all of the BS spouted on this board read for yourself and do your own DD. You can start by reading the last Banro communication from October 7th:
http://news.banro.com/press-releases/banro-provides-q3-2014-production-update-for-its-t-nyse-mkt-baa-201410070971734001
Oh boy, that doesn't sound good. Should we call the FBI?
Tech, you also need to ask yourself: IF those 26 million shares were sold, then who BOUGHT those 26 million shares. Even at $0.15 per share, that's still $3.9 million!
When will you guys learn? Gold miners don't move up and down hour by hour, day by day with Gold prices. Gold is a commodity and like all commodities, the price can fluctuate drastically on a short term basis. Gold miners, yes they mine Gold, but they are also Companies which run their businesses as do other non-mining Companies i.e. they aim for stability in everything from production to labor force to finances. In other words, a good Gold miner will establish their operations such that they will be able to absorb some volatility in the actual Gold prices. That's not to say that some Gold miners won't go out of business if Gold drops to $1,050/ounce, some will, but most have built in policies and practices to absorb this price volatility and avoid going into bankruptcy so easily. You guys need to get a clue and understand how things work and stop thinking that your constant spin on this board will impact the price of Banro.
Here's the recent news about China's economy surpassing the US economy:
http://www.businessinsider.com/china-overtakes-us-as-worlds-largest-economy-2014-10
Here's why Gold's future looks very bright: As everyone has heard by now, China's economy has now surpassed the US economy as the world's largest economy. What do you think will be the next logical step given this recent news? Eventually, the US dollar will cease to become the world's international currency. China's currency will take its place, it is a natural and logical progression when such major world economic changes occur. What else do we know about the relationship between the US dollar and Gold? The dollar goes up, Gold goes down. The dollar goes down, Gold goes up. When the US dollar loses World Currency status and gives way to China's currency, the value of the US dollar will sink and Gold will rise. In addition, and unlike the US, China will take us back to the Gold standard and they will back their currency (the new world currency) with Gold. Folks, this is no longer a matter of "if", it is now a matter of "WHEN"! Invest as you wish but I for one am in Gold for the LONG haul, Gold's future is very bright.
Be confident in what you know. You made it out of the quicksand correct, and so likewise you will make it through this too.
Yep, and according to NASDAQ the Institutional Holdings is holding steady, no drop, no increase and the Short Interest is the lowest it's ever been for Banro. BTW, the NASDAQ Institutional Holdings should update soon, sometime in October I would think.
I completely agree with you and that doesn't even take geo-political risks into play. I am here for the LONG haul!
Very promising reply from Naomi. I'm waiting to see the new rebalancing numbers. Also like the "All early indicators point to a less expensive fix than we had originally anticipated " makes sense to me. As I pointed out when we first heard about this that it would probably be blown out of proportion simply because 99% of retail investors haven't a clue about what is involved in commissioning mines.
Excellent post KoK but don't hold your breath, there is a large group on this board that has no interest in talking facts.
Agreed. I'm holding strong.
I bought at $0.19
I will definitely buy at $0.19!
Yeah, from 330K shares to 477K shares...means nothing when you consider that this represents only 0.1% of outstanding shares. Short interest on BAA is not even worth mentioning.
Well well, so it looks like huge buying today, I'm sure Jhnvtjll is VERY disappointed!
...and BlackRock is holding 27.8 million shares of Banro.