CNMC - Gold Mining Company on SGX

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30 Aug 2013 02:57 #15892 by erelation
I will suggest those who have missed the rebound in gold price to look at CNMC. The other gold mining company, LionGold have moved more than 60% this month from $1.15 to close today at $1.725.

Fundamentally it is positive for Gold as US debt ceiling problem coming back in Sep/Oct. Although there has been talk about QE tapering but it may not happen as China and Japan are selling US treasury... the FED has ended up as last resort to buying over US treasury debt...

Higher interest rate will spell big problem for US government as well as US companies. Detroit has already funded for bankruptcy.... other city like Chicago is not in good shape financially.

CNMC management have done a great job as they have never issued any new shares at current low price... which prevent dilution in interest for existing shareholders.

The latest conversion loan is done at significant premium to current market price which signal confident in the company's long term prospect.

Company has been ramping up capacity and July production of gold bar already reached 1389 ounces.

If we exclude the new capacity which they are building up now.... taking 1389 x 12 months = 16,668 ounces a year.

Chris Lim, CNMC's CEO, said the firm's cost of production is estimated at $450-$550 per ounce, way below the current market price of spot gold which is around $1,650 an ounce.

Assuming a cost of production has increased to $800 per ounce and a gold bar price of US$1300. That will be a profit margin of US$500 per ounces.

Profit = 500 x 16,668 = US$8.3 million.

This compare to latest quarterly result of US$21,245.... sit tight and wait for more quarterly result to wake up this sleeping beauty....
The following user(s) said Thank You: Susie, ghseow

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30 Aug 2013 04:22 - 30 Aug 2013 04:26 #15893 by GEO
CLARIFICATION ON NEWS ARTICLE IN LIANHE ZAOBAO
In respect of the statement that “in the second half of 2013, the Group is expected to mine between 400,000 and 500,000 tonnes of ore and produce between 300 and 350 kilogrammes of gold doré bars”, the Company wishes to inform shareholders that, barring any unforeseen circumstances and subject to favourable weather conditions, the Company is cautiously confident that the aforementioned mining and production levels are achievable, given that:-
(i) the gold doré bars produced in the month of July 2013 increased to approximately 1,360 ounces of gold doré bars as compared to 1,154.86 ounces of gold doré bars produced in May 2013 (as disclosed in the updates on the Company’s gold production’s announcement on 7 June 2013). This reflects an increase of approximately 18% in monthly production.
(ii) production capacity is expected to increase by approximately 200% in the second half 2013 following the completion of construction of second leach yard with approximately 140,000 tonnes of ore stacked, the construction of the third leach yard with a projected leaching capacity of 70,000 tonnes which is expected to be completed by fourth quarter of 2013, and the addition of newly ordered gold deabsorption equipment which will be installed by the fourth quarter of 2013; and
(iii) there has been further improvement in production efficiency in the second half of 2013 arising from the Company’s continuous effort to enhance the leaching process.

Commentary from half year results:
The Group’s performance may be affected if gold prices continue to fall in the second half of 2013 (“2H 2013”). However, the Company is anticipating an increase in gold production volume in 2H 2013. The production capacity is expected to increase by approximately 200% in 2H 2013 following the completion of construction of second leach yard with approximately 140,000 tonnes of ore stacked, the commencement of construction of third leach yard with a projected leaching capacity of 70,000 tonnes per leaching cycle which is expected to be completed by the fourth quarter of 2013, and the addition of newly ordered gold de-absorption equipment which will be installed by the fourth quarter of 2013. Upon the completion and operation of the three leach yards, the estimated annual capacity of 1 million ores per annum will be achievable.
As the heap leaching and technical services agreement with China Gold continues to bear fruit and positive outcome, the month of July 2013 saw the Group’s records it highest monthly gold production of approximately 1,360 oz of gold doré bar since the start of the Group’s gold production in July 2010. Barring unforeseen circumstances, the Company is anticipating an increase in gold production volume for the second half of 2013.
Last edit: 30 Aug 2013 04:26 by GEO.

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30 Aug 2013 04:56 #15894 by GEO
Gold production volume for CNMC is expected to increase significantly subject to favourable weather conditions, successfully deployment and operation of the leach yards plus China Gold technical support. The price of gold and cost of production shall be the key factors in determining whether CNMC will make profit or loss.

Current price of $0.255 is near to the previous lows of $0.245(21 Dec 2012) and $0.25(8 Jul 2013).

Wonder if domestic buying demand for gold from India will drop with the drop of rupee.

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30 Aug 2013 18:34 #15903 by erelation
I think India will continue to buy gold as it is deemed as a hedge against further devaluation of rupee. Furthermore it is peak season for gold now in India.

online.wsj.com/article/SB100014241278873...626420651144876.html

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20 Sep 2013 15:04 #16267 by erelation
Welcome to QE unlimited.... it has been proven that the FED has forced themselves to the corner and taper of QE3 is no longer possible as it will drive up interest rate and kill the US economy. They can't even reduce QE3 by US$5 billion.

Never trust all these funds and expert who issued advice to SHORT GOLD before FED announcement. There has been large BUY ORDER for Gold futures minutes BEFORE the news release by FED...

Buy CNMC before it is too late.... as Gold is a good hedge against hyperinflation.... The ramp up of production is well timed with the recovery of gold price.

The Chinese, The Indian and the Russia know the value of good versus the fiat currency...



Gold Deliveries From Shanghai Bourse Jump on Physical Demand - By Bloomberg News – Jul 15, 2013 3:43 AM MT

Physical gold delivered to buyers by China’s largest bullion bourse in the first half of this year almost matched the entire amount taken from its vaults in 2012, and was more than double the country’s annual production.

The Shanghai Gold Exchange supplied 1,098 metric tons in the six months through June, compared with 1,139 tons for the whole of last year, according to data from the bourse today. Output in China, the world’s largest gold producer, reached a record 403 tons last year, according to the China Gold Association.

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12 Oct 2013 15:35 #16686 by GEO
SINGAPORE, 11 October 2013 – In light of the recent unforeseen volatility in the Group’s share value, LionGold Corp Ltd (“LionGold” or the “Group”) is announcing the termination of the proposed placement of up to 180 million new shares at S$1.10907 each and up to 135 million new warrants at S$0.02 each, as announced on 14 August 2013. The termination of the agreement was mutually
agreed upon by LionGold and the subscribers of the placement, which include Platinum Partners PPLO fund, Carnegie Hall Group, and Spring Road Advisors.

With the termination of the placement ($1.10907 per share) by the reputable subscribers and the selling by substantial shareholders, in my opinion only, LionGold share price downward pressure to persist further and is currently in the oversold zone. CNMC share price on the other hand is also affected by LionGold depressed share price as LionGold a bigger gold company is now trading at a much cheaper price than CNMC.

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