RIO, MAI
Rio2 aka RIO released a brief update concerning the Fenix gold project currently under development in Chile, or rather, not under development because a newly elected government delayed the permitting process. They highlight how that government lost a referendum on revising the constitution, in response shuffled the hard lefties out of cabinet, and are now aggressively trying to increase foreign investment in ways that could benefit the Fenix development process.
As well, we hear that long time CEO/President Alex Black is moving to Executive Chairman with the current VP taking over his former jobs. I don't mind this, as long as this management team with a great track record is still on the job, albeit with some different titles by their names.
We also got news that RIO had closed the sale of a non-core royalty for $5M, which will help tide them over the period until they get the permits and restricted cash becomes available.
(The IKN newsletter this last weekend also includes an extended discussion on how the Chilean government is now backing off its anti-mining stance, to the extent it is getting internal criticism from its own left wing. There are no guarantees, of course, but this bodes well for RIO getting its permits later in 2023 as the process wends it way through the bureaucracy.)
Message 34095636
Mexican gold miner/developer Minera Alamos aka MAI did not PR this, but they did file their Q3 financials on SEDAR the other day, so you can find them at that website of via the Investor section on MAI's website.
The bad news is that they did not have a bang up quarter at their newly operating Santana mine in Sinaloa, and hence have not yer declared commerciality. But given the difficult circumstances they have been dealing with in terms of Covid, inflation, and weather extremes, producing and selling 4236oz Au in Q3 is not so awful. (That area normally gets zero rain in the summer but instead got 400MM of rain in August, which interfered with both mining operations and the leach pad. Also note that in spite of all that rain, the area remains affected by a longer term drought.)
The better news is that in spite of all this they were cash flow positive for the third quarter in a row, and managed to generate a net profit of over $3M. They remain in good financial shape with almost $15M in cash, and their credit facility remains unused. If things continue to go even just this well -- I expect improvement -- by the time they have the permits to develop their second mine, Cerro de Oro, later next year, they may have enough cash on hand to develop it without taking on the small debt load they have been talking about.
MAI's share price has been weak of late, and the IKN newsletter brings us news that this has been the result of a large institutional seller with 20M shares to dispose of, and there are only 4M left to be sold, so perhaps they will run out of shares at the same time as comerciality is declared at Santana and the price of gold takes off, creating a perfect storm that finally allows the value in the company to be recognized by the market. In the meantime, the selling pressure creates a great opportunity to accumulate shares cheaply. If I wasn't already so insanely overweight in MAI I would be tempted to buy more myself. |
