Precious and Base Metal Investing Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Gold/Mining/Energy : Precious and Base Metal Investing

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: baystock who wrote (2907)	4/4/2002 11:31:52 AM
From: baystock	Read Replies (1) of 39344

Someone earlier falsely accused SEMAFO of having a poor balance sheet and I didn't have time to repond then. I just checked their latest financials ending 12/31/01 and here are some observations: Cash and cash equivalents beginning of year US$9.9 million Cash and cash equivalents end of year US$10 million As for debts, they have an $8 million bank loan at 12% interest repayable in semi-annual installement of $1.3 million. This loan was taken to finance the Jean Gobele mine construction.The minimum payments on this loan are as follows: 2002 $2.6 million 2003 $2.6 million 2004 $2.6 million Clearly this debt repayment schedule is manageable with their $6 million yearly cash flow and $10 million in cash balances. And yes they have hedged 3 years of gold production at $290 an oz because their bankers would have insisted on it. But the current situation of $6 million minimum (because of the hedges) yearly cash flow with no short term upside to the POG is much preferable to not developing their first mine and having no cash flow from it. The upside comes from the MILLIONS of undeveloped resource ounces in their multiple other West African projects. Also the Jean Gobele mine will last a lot longer than 3 years and cash flows from the mine will only go up after then. In conclusion, SEMAFO has done what very few juniors have done over the last few years of the vicious bear market in gold...bring a very profitable mine into production and maintained a very healthy balance sheet in the process. In the last calendar year their cash balance stayed constant at $10 million AND they didn't issue any new shares which stayed constant at 76 million shares outstanding (insiders control more than half these shares).

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next