Indeed, all quotes of mine. Good finds. So why has my tone changed a bit? Well, for one we JUST saw that they blew through $40M to pay back a loan. Great, they decreased LT debt. Not great, that's a shtload of cash that they could really use during the ramp up to production. Two, they haven't made a material dent in trades payable which is what they said they were going to do with the streaming money (what's the current and quick ratio? What's it been? Has it changed for the better?). Three, they have an $8.75M bond pmt due in 2 weeks, amongst other financing expenses, and $9M in cash as of June 30 though that amount is likely lower now. Four, they are not in a position to be blowing million$ on a trucking fleet when they could just continue to lease until they are in a more comfortable spot from a cash flow perspective. They continue to grow EBIT, so why not use a little more of that EBIT on increased lease pmts vs dumping half of your tiny cash position when you are not in a position to do that.They need $$$ in the bank right now, not a bunch of shiny new trucks that they can lease. Five, in reading between the lines it looks to me like Namoya commercial production won't be announced until Q4 - further delays.
My money is invested, not my emotions unlike some on here (TO THE SUN! RISE FROM THE ASHES LIKE A PHOENIX! BAA TO THE STRATOSPHERE!! LOLOLOL). I am just hear to share my thoughts, opinions, and research. I am not sorry nor will I apologize if what I say hurts your feelings, is not in concert with the blind faith you have in your dearly beloved Banro, or makes your butt hurt. I am and always have been willing and able to pivot from a position if fundamentals change.
Just calling it like I see it. My opinions - I could be wrong, I may be right, and it's certainly not meant to be advice. I am open to healthy dialogue and debate as to why any points I brought up are or may be wrong. I would love to stand corrected as I'm always open to learning.
The world changes, fundamentals change, management teams change, financial statements change, political regimes change, business environments change, so why to should your outlook or thesis on an investment not change?
I have always viewed BAA as a low delta, way out of the money (low relative value metrics & ratios) call option on gold.
All of that being said, I am still in BAA as I think gold could pop soon and I think BAA will outperform others when that happens, AND I think they can get Namoya to commercial production before sht hits the fan. When that happens it will rally hard - really hard - in my opinion. Though if Q3 ends with no announcement, and Q4 rolls along with no announcement and further deterioration in working capital I won't hesitate, nor will I cry or drown myself in scotch, to get out and wait on the sidelines.
Happy to see the growth in revenue, EBIT, EBITDA, though not to happy with working capital position and mgmts plan to blow half their wad on trucks.
Long, with one raised eyebrow.
Have a great weekend.
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