Warmcamp seems to have a pretty good handle on valuing this company. I admit, that i have limited knowledge when it comes to mining stocks and their valuations. I understand cash flow is a big deal, but i'm a little lost on how to value a start-up mininng operation like Banro.
That being said, Banro is one of about 20 stocks i follow, in additon to the 13 that i own. I have been tempted to buy at these prices but waiting to see if gold prices will continue to hold at these levels, in addtion i want to see the completion of the plant. Political unrest is another big unknown but like you said other mining companies seem to be moving forward in the Congo. althoug every now and then you will see where a village has been attacked or some other such non-sense.
Question to Warmcamp and others, what kind of annual cash flow can we expect for BAA once the Tan. (not sure of the spelling) property/mine is up and producing?
First stage of Twangiza mine, using refurbished plant that currently arriving to the site, is supposed to produce around $100 KOz/year. It will likely process ‘good ore’ using relatively cheap crushing+CIL process, i.e. one may expect, at current gold price, around $300/Oz profitability rate (GAAP earnings) and up to $400/Oz free cash flow, i.e. up to $40M/year. If (big if) everything goes Ok then mine will be expanded, using this cash flow, up to 300 KOz/year production level. Mineral reserves allow achieving and supporting this level; they are very big.
Warmcamp, would you wait to get it, or put another way, I have heard the real experts (those that invest in commodities) and most think that gold is peaking, with that being said would you take a wait and see approach before going in?
I must admit, i never that they would find investors for the second offering a few monnths ago. They are moving equipment & plant to the site, it looks like the real deal.