I completely concur. One note regarding book value though. In my opinion, it is not a compelling reason to invest in this company, lured by the apparent value of the assets. Namoya is still capitalized for 390 M on the book. That is a joke. I had run a DCF model based using the assumptions of the Deloitte analysis updated with the new production schedule, and the value of this mine at current gold price is under 200M. That does not even take into account a massive discount for the DRC location and risk premium.
Honestly, in a liquidative event, common shareholders are likely to recover zero if assets are put for auction.
The fact that they have raised a net 60+ M in the first half in new financing and have essentially already entirely spent it (50+20+20+10-40 for backstop = 60 net) says something about the concern they have for the cash balance. They are pushing investment and ops at all costs, regardless of the dire liquidity situation, and this worries me that they have little concern for the shareholders. They are basically all in, "if it goes and we can avoid running out of cash, great, if it breaks and we have to file, that's ok, we'll restructure, wipe the commons, keep our cushy jobs, and operate the mines with a leaner capital structure".
The only saving grave, I feel, is a sustained and significant rally in gold prices needed extremely soon (like yesterday), and there are less risky miners out there with much less leverage that would also see similar upside in that scenario, with much less downside risk if gold prices stay depressed for longer. Just my opinion, but I feel there are better opportunities in the mining sector. I bought CDE a couple days ago under $3.00 and have been lucky to see a nice bounce back. Also, IAG under 1.20 was a great opportunity to benefit from a rebound in gold prices, although I missed that one.
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