The other day they released an investor presentation. I noted the following
View attachment 988672
Thought it was a bit strange when they already claim to have the most reserves by any test compared to its peers.
How about increasing the EPS 5 Times by 2020.....
The next announcement was that they had purchased a 250M USD stake (effectively leveraging up with borrowed money) to buy stake in Lundin Gold) plus extra spend over the following years.
Clearly they are keen to spend money, and given the deal and their new idea to have exposure, there will be more money borrowed and invested, plus then you have big upcoming spends in PNG with Wofi.
spending those credit lines at a time when rates are rising, you already claim to have so much more reserves than everyone else doesn't seem to make much sense to me
Anyway This is they bought into
View attachment 988681
Look at the line specifically, ESTIMATED PROJECT COST INCLUDING CONTINGENCY 669M ($CAD)
a few quick searches and you see that the project was totally financed last year
In May 30, 2017
Lundin Gold Announces US$400 - $450 Million Project Financing Package for Fruta Del Norte
Okk so they had finance, whats the big deal.?
Well the finance is estimated on the feasibility. They make out that they were being conservative
This finance package was draw down and used.........
Plant still not built
Then they mortgaged the plant a month ago and raised another 300 M USD, so they have churned through 750M USD........that's way way more than 669 M CAD, what else is wrong on that feasibility?
Then after securing the development loan of 300M USD just one month ago, they now need another $400 USD M in the form on an equity placement,
I thought maybe the new equity was going to pay out the secured loans just a month old, but no its being used in addition to finish the fine.
View attachment 988729
That's a huge use of cash, way way over existing the feasibility estimates including contingency and the mine isn't supposed to be finished till 2020, so wont be adding to NCM earnings anytime soon, got to wonder what they bought into, what was the urgency of paying 13 Percent more than the prices were trading at the Friday before, what was the idea of paying 37% more than they were averaging just before the secured a secured 300M loan a month ago, why buy equity at a premium when a company is in need of more cash, or a company that has under estimated the costs?
The market has not followed them , the deal was announced after close at 4.81CAD, NCM is paying 5.5CAD,,,,,,,,the shares finished last night just above $5 CAD,
View attachment 988717
looks like NCM is gearing up to me............
1 Down , 4 more assets to buy
