SafetyinNumbers Posted September 11, 2017 Author Share Posted September 11, 2017 It looks like there was some decent insider buying the last few days ahead of what may be some decent catalysts and after some very good news with the labour settlement. The insider marker shows about 40k shares purchased in total over the past couple of days. https://www.canadianinsider.com/company?ticker=GCM#ui-id-7 There has been no filing on SEDI yet, however. In terms of catalysts, there is expected release of the Marmato drill results which I'm hoping come before the marketing beginning next week at two Colorado gold conferences and finally there is a chance that the company finally gets some analyst coverage. We have SEDI confirmation. The buyer was, Hernan Martinez, the former minister of mines of Colombia who sits on the BOD. He actually bought a little more than 75k shares. He owned less than 1k before. It's hard not to see this as very positive. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted September 14, 2017 Author Share Posted September 14, 2017 More insider buying the last two days but still waiting for SEDI confirmation. Marketing starts on Monday morning in Colorado at the Precious Metals Summit. Webcast details below. http://www.gowebcasting.com/conferences/2017/09/18/precious-metals-summit Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted September 18, 2017 Author Share Posted September 18, 2017 More insider buying the last two days but still waiting for SEDI confirmation. Marketing starts on Monday morning in Colorado at the Precious Metals Summit. Webcast details below. http://www.gowebcasting.com/conferences/2017/09/18/precious-metals-summit GCM presenting at 12:45pm ET at the link above. The company also put out some drill results today. I have no expertise in assessing drill results but anything that can extend the mine life is positive. It will be interesting to see if the insider buying continues today. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted September 19, 2017 Author Share Posted September 19, 2017 The insider buying did continue today and there was a filing today for Thursday and Friday's buying of almost 60k shares by the same director, Hernan Martinez. That's a total buying of ~135k shares over the last week and the buying today appears to be at least 32k shares. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted September 19, 2017 Author Share Posted September 19, 2017 Anyone else still reading these rantings of a mad man? It looks like there was some decent insider buying the last few days ahead of what may be some decent catalysts and after some very good news with the labour settlement. The insider marker shows about 40k shares purchased in total over the past couple of days. https://www.canadianinsider.com/company?ticker=GCM#ui-id-7 There has been no filing on SEDI yet, however. In terms of catalysts, there is expected release of the Marmato drill results which I'm hoping come before the marketing beginning next week at two Colorado gold conferences and finally there is a chance that the company finally gets some analyst coverage. Why do you think the stock is a better play here than buying '20 or '24(my preference) debentures? Basically you are buying leaps that pays 6%/8% with no mandatory conversion. Talking about conversion , I can't figure out why the '18 debs are mandatory. Who would ever buy that at 70 when the mandatory conversion is at CAD $2.37 , a 45% premium? Just a day's work so please correct me if I have missed anything. Just thought I should update and mention that I have sold all of my common and replaced with X's and U's. The X trading down while the stock has moved up so much, especially in US$ terms makes little sense. The stock value alone is around 77 in the debentures. Paying 84 for an 8%, security and optionality seems like a good deal! Also, GMP, did a big trade at 84 and I think must have come out long so it provided the opportunity. Link to comment Share on other sites More sharing options...
doc75 Posted September 19, 2017 Share Posted September 19, 2017 Just thought I should update and mention that I have sold all of my common and replaced with X's and U's. The X trading down while the stock has moved up so much, especially in US$ terms makes little sense. The stock value alone is around 77 in the debentures. Paying 84 for an 8%, security and optionality seems like a good deal! Also, GMP, did a big trade at 84 and I think must have come out long so it provided the opportunity. I've been thinking about this, and wondering why the insiders haven't been scooping up some of the debs. At these prices it seems the obvious play. But I'm usually missing something! Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted September 19, 2017 Author Share Posted September 19, 2017 Just thought I should update and mention that I have sold all of my common and replaced with X's and U's. The X trading down while the stock has moved up so much, especially in US$ terms makes little sense. The stock value alone is around 77 in the debentures. Paying 84 for an 8%, security and optionality seems like a good deal! Also, GMP, did a big trade at 84 and I think must have come out long so it provided the opportunity. I've been thinking about this, and wondering why the insiders haven't been scooping up some of the debs. At these prices it seems the obvious play. But I'm usually missing something! The director who has been buying is a former Colombian Mining Minister so I imagine he is a Colombian resident and as I think Valcont previously noted, the debs can only be owned by Canadians or institutions. Besides that some insiders already own a lot of GCM.DB.X. This would appear to be an especially good opportunity for Canadians to take advantage of but there is some small risk that they get a cash infusion (sell stake in Marmato?) that allows them to redeem the bonds early. Next catalyst is the Marmato scoping study which may come before the Denver Gold Show, next week. Link to comment Share on other sites More sharing options...
doc75 Posted September 19, 2017 Share Posted September 19, 2017 The director who has been buying is a former Colombian Mining Minister so I imagine he is a Colombian resident and as I think Valcont previously noted, the debs can only be owned by Canadians or institutions. Besides that some insiders already own a lot of GCM.DB.X. This would appear to be an especially good opportunity for Canadians to take advantage of but there is some small risk that they get a cash infusion (sell stake in Marmato?) that allows them to redeem the bonds early. Next catalyst is the Marmato scoping study which may come before the Denver Gold Show, next week. Right - totally forgot about the restricted ownership of the debs. Thanks! Link to comment Share on other sites More sharing options...
valcont Posted September 19, 2017 Share Posted September 19, 2017 Just thought I should update and mention that I have sold all of my common and replaced with X's and U's. The X trading down while the stock has moved up so much, especially in US$ terms makes little sense. The stock value alone is around 77 in the debentures. Paying 84 for an 8%, security and optionality seems like a good deal! Also, GMP, did a big trade at 84 and I think must have come out long so it provided the opportunity. That was a good call Safety. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted September 19, 2017 Author Share Posted September 19, 2017 Thanks Valcont. The debs have to follow sooner or later but if the stock ends up correcting, I don't think the Vs and Xs don't have much downside as they haven't rallied at all. They should have a decent cash flow quarter in Q4 and will likely try to redeem more V debentures Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted September 23, 2017 Author Share Posted September 23, 2017 More insider buying by Director Martinez. https://www.canadianinsider.com/company?ticker=GCM Looks like he bought around ~240k this week. He went from owning almost nothing to over 400k shares in a few weeks. The company put out a press release indicating they weren't aware of any non public material information as to why the stock has increased with higher volume. Not sure how to take that as the Marmato scoping study should be out by the end of September. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted September 27, 2017 Author Share Posted September 27, 2017 My thesis that, the director Hernan Martinez, that has been buying tons of stock couldn’t buy debs appears to be false as he picked up US$365k of the 2018 bonds yesterday which is around 187k shares. They are presenting today at the Denver Gold Forum. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted September 29, 2017 Author Share Posted September 29, 2017 My thesis that, the director Hernan Martinez, that has been buying tons of stock couldn’t buy debs appears to be false as he picked up US$365k of the 2018 bonds yesterday which is around 187k shares. They are presenting today at the Denver Gold Forum. Link to Denver Gold presentation: http://www.denvergoldforum.org/dgf17/company-webcast/GCM:CN/ Link to comment Share on other sites More sharing options...
doc75 Posted October 2, 2017 Share Posted October 2, 2017 Safety & others who care to comment: I see the potential value here, but management sure makes me nervous. How did you get comfortable with Iacono / de la Campa / Martinez after their sordid history with Pacific Rubiales? Or do you just hold your nose and look at the metrics? These guys are pretty much the epitome of the famous bad behaviour in the mining/resource sector. How or why do you trust them now? Not trolling. Serious question. Thanks! Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted October 2, 2017 Author Share Posted October 2, 2017 Safety & others who care to comment: I see the potential value here, but management sure makes me nervous. How did you get comfortable with Iacono / de la Campa / Martinez after their sordid history with Pacific Rubiales? Or do you just hold your nose and look at the metrics? These guys are pretty much the epitome of the famous bad behaviour in the mining/resource sector. How or why do you trust them now? Not trolling. Serious question. Thanks! I definitely think it's a fair question. I don't know the history of PRE too well, except I think they gave themselves a ton of options, used a ton of leverage and got lucky with a very strong oil price only to have it collapse on them. Luckily for them, they cashed out a ton of options before that happened. In this case, the cheap valuation certainly helps. The low share count thus far means they haven't been able to issue too many options (on a fully diluted basis) and the ones they have been at the C$ equivalent of the debenture conversion price. I think that demonstrates the influence of the independent board members. We will have to watch as the board likely changes as the 2020 debentures are retired. They also own a lot of stock/debentures so are aligned but we will have to keep an eye on them as the capital structure becomes more equity heavy. Personally, I have moved most of my exposure to GCM.DB.X (but I own all classes of the debs) as that is what Serafino mostly owns as well and while he really wants to buy back GCM.DB.V, I can't imagine him selling the GCM.DB.X for par. Link to comment Share on other sites More sharing options...
doc75 Posted October 2, 2017 Share Posted October 2, 2017 Safety - thanks for the response. I've been reading more about the PRE story and it certainly leaves a nasty impression. From abuse of workers and all the stuff you sadly "expect", to inflated reserve estimates and a sketchy restructuring of their options program that perversely benefited management. Far less innocent than getting caught like so many others with too much leverage to the price of crude. There seems to be plenty of evidence that you can't really trust promotional guys like Iacono and Guistra with capital. Objectively speaking, past performance of management and the BOD here is weak at best, and the major players seem to be of questionable integrity. I see the value. I see the insider ownership and purchase. But if they're not honest brokers, then who knows what's really going on with local mining relations, reserve estimates etc. So I was wondering how you address that type of risk in your price model, since it seems like you have a substantial position in this name. Do you discount your numbers in any way? Or do you just handle the "black box" risk through position sizing? FWIW, there's some interesting/colourful and potentially quite biased reading about Iacono and friends available at http://incakolanews.blogspot.ca . Just search the blog for Iacono or GCM. Again, not trying to troll or bash. Just trying to negotiate my fears. I have a position in the X debs based purely on the numbers, but have kept it small because of the question marks. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted October 2, 2017 Author Share Posted October 2, 2017 I don’t think my risk approach is always very scientific. Of all of the allegations I have read on the BOD, none have suggested they misstated financial statements. I suppose with any resource company, I have to trust the reserve engineers as well. At least there is production here. I feel more comfort in owning the debt than the common which allows me to have a bigger position than I normally would if only the common were available. For example, I think JAG.TO is a very cheap gold stock (albeit with a checkered past) and I like the new(ish) CEO. I own less JAG than GCM because there is only common available. I have read IKN’s comments on GCM and he seems hung up on the contract model as not being real production for some reason but the cash flow does appear real. The risk mitigation will be to begin selling the position as it approaches fair value long before it gets there if that makes sense. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted October 4, 2017 Author Share Posted October 4, 2017 Marmato resource estimate is finally out. It seems enticing to grow production here to 125koz/yr for at least 12 years but with no cost estimates yet, I can’t get too excited. The stock’s value is entirely supported by Segovia so if Marmato is proved to be economic with a further PEA expected then that would be a nice bonus. http://www.grancolombiagold.com/news-and-investors/press-releases/press-release-details/2017/Gran-Colombia-Gold-Announces-Underground-Mineral-Resource-Estimate-for-Its-Marmato-Project-Commencing-Scoping-Studies-for-Underground-Mine-Expansion/default.aspx Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted October 12, 2017 Author Share Posted October 12, 2017 Q3 production numbers are out and while I was expecting a decline from last year, the September numbers were incredible and the grades for the quarter as a whole were also incredible. http://www.grancolombiagold.com/news-and-investors/press-releases/press-release-details/2017/Gran-Colombia-Sets-New-Monthly-Gold-Production-Record-in-September-2017-and-Remains-on-Track-With-2017-Annual-Production-Guidance/default.aspx The highlight to me was production of 16,664 oz in September which was a record and if they can keep that pace means 50k oz in Q4. I'm not expecting that but it sure would be impressive if they get there. I have been using 170k oz for next year but it seems light given their performance but that at $1295 gold (current price) produces EBITDA around US$75-80m and every 10k oz in additional production adds another US$5m in EBITDA. Recall fully diluted share count is ~95m and peers trade at 7x so even trading at half of the peers means a ~C$3.60 share price or about double the current price. Also, if that happens, there will be no interest costs and tax rates are on there way down over the next two years so FCF generation should be very good. Link to comment Share on other sites More sharing options...
doc75 Posted October 12, 2017 Share Posted October 12, 2017 Interesting that insiders were back in the market today. Another 18200 shares flagged today as an insider buy. I would have thought these pending production numbers would be viewed as material insider knowledge. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted October 12, 2017 Author Share Posted October 12, 2017 Interesting that insiders were back in the market today. Another 18200 shares flagged today as an insider buy. I would have thought these pending production numbers would be viewed as material insider knowledge. Yeah, I was looking at that too. I guess we'll see who it was but not sure if the whole BOD would be privy to the monthly production numbers before they are published. They do put out production numbers around the same time every quarter. It's not even clear its "material" by definition but the appearance should be enough for insiders to be careful. Link to comment Share on other sites More sharing options...
doc75 Posted October 12, 2017 Share Posted October 12, 2017 I'm quite surprised to see no market reaction to yesterday's production numbers. Surely they were higher than anyone expected, given the strike. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted October 12, 2017 Author Share Posted October 12, 2017 I'm quite surprised to see no market reaction to yesterday's production numbers. Surely they were higher than anyone expected, given the strike. With no analyst coverage, there aren’t any expectations! I guess they don’t have to worry about trading ahead of “material” non-public information. Next potential catalyst is results on Nov 15. I expect we’ll see another tender announcement on the GCM.DB.V as they should have decent excess cash flow this quarter. Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted November 3, 2017 Author Share Posted November 3, 2017 The GCM.DB.X has traded up to 97 so I have taken the opportunity to sell some bonds and buy the common at C$1.85 as the risk reward has become pretty compelling into Q3 results in a few weeks. The earnings on Nov 15 will coincide with the Colombian Gold Symposium in Medellin where GCM will present on their Marmato project. Personally, I find it a bit odd when companies advertise but in GCM’s case, I share their frustration about getting their story out there. I don’t think they hit on the salient points of valuation which I think are interesting but most gold investors just want a good story! This is a feature on the BTV TV show running on BNN this weekend. http://www.b-tv.com/gran-colombia-gold-btv-321-feature/ Link to comment Share on other sites More sharing options...
SafetyinNumbers Posted November 14, 2017 Author Share Posted November 14, 2017 GCM reported Q3. The details are in the press release below. The EBITDA number was a few million below my own estimate but it appears it's because the sold 3k oz less than they produced during the quarter (my estimate was based on them being equal). The excess cash flow was also below my estimate for the same reason. The important thing is that they kept full year free cash flow guidance at US$16m (implies US$8m in Q4). Also, super important is that they produced 17k oz in October and raised overall guidance for 2017 to 165-170k oz. With 139k oz produced in the first 10 months of the year, if they maintain the October production rate, they will beat the high end of guidance. They also signed up 7 mining collectives up as contract producers since the agreement signed in September. It's not clear what impact that will have on total production going forward. http://www.grancolombiagold.com/news-and-investors/press-releases/press-release-details/2017/Gran-Colombia-Gold-Reports-Third-Quarter-2017-Results-Raises-2017-Production-Guidance/default.aspx Link to comment Share on other sites More sharing options...
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