Santana Minerals Limited

[Basil]

Just a very small flutter for me BP but the drill results do look very encouraging. Decades ago when Mineral resources owned the Waihi gold mine I got a ten bagger out of it.

This mine is a lot bigger so you never know, it might happen again or I might burn $30k with nothing to show for it.

Time will tell.

[BlackPeter]

Just a very small flutter for me BP but the drill results do look very encouraging. Decades ago when Mineral resources owned the Waihi gold mine I got a ten bagger out of it.

This mine is a lot bigger so you never know, it might happen again or I might burn $30k with nothing to show for it.

Time will tell.

I am pretty sure you will be fine, no matter how it will go (and yes, I do wish you good luck).

Probably more worried about the investors who can't afford to set 30k (or whatever sum they invest) into the sand.

I guess at the end of the day is mining for a start up like Santana Minerals just a gamble. And yes - nothing wrong to spend an evening at the casino (with a prior determined budget of money you can afford to lose) or to invest money into Lotto tickets as long as the money does not go from any other essential bills one needs to pay. So - absolutely no issue about putting money into a mining start up with little diversification, as long as one considers the invested capital not different to a Casino chip.

What I am more worried about is about the people who put money they can't afford to lose into such ventures ... and that's the reason I try to provide a bit of balance. The thing with mining is - its a high risk venture and it is easy to lose it all, but sure - it can be as well (if done professionally and with some good luck) a high reward game. Which one of these it will be, nobody can say in advance.

Just out of curiosity - do they publish a business case for their NZ venture ... and is it clear whether their NZ mine is financially decoupled from their other (money consuming) adventures in Cambodia and Mexico (one of the risks I raised above)?

At what point in time do you know whether they are successful (or not?) - and will at that point in time still be an opportunity for investors to rescue some of the money which they poured into the project?

To be honest - I noticed with surprise that even Simply Wall Street (the guys who paint everything in pink) agree with my concerns on this company. They point to high risks and a potential breakeven further than 3 years away, which is basically clear text for them having no idea whether they ever will make money.

Anyway - I am sure the ride will be fun for the people who are willing and can afford to pay for the ticket ... no matter where the cart ends up in the end.

[Basil]

Good work adding perspective BP and highlighting the risks of which there are many.
Might not even get consented by the Government appointed panel that's being set up- to review these things under the fast track process.
I think if / once they get consent they will be after finance for the capex for it and no doubt that will involve a capital raise and some debt.  Don't know much more about the process but yes, I'd be prepared to tip another $30K in if they make a very good business case., Not an avid Gold investor by any means, I just have fond memories of Mineral resources profits and am a bit addicted to watching the Gold Rush series on the Discovery channel.  Getting older so I thought I'd have a Gold mining adventure, without having to get my hands dirty.
As you suggest and is acknowledged. It really is a punt but the drill results do look incredible, so I guess I think the odds are in my favour a little bit. I suppose we all have a bit of "gambler" in us eh.  Thanks for your good wishes, I'll probably need them lol.    

[Basil]

Gold hit another all time record overnight on the US market, around $2,580 an ounce U.S.
Gold for December delivery over $2,600 an ounce and up 35% this year.
Interesting segment on Gold this morning on CNBC.  Since 1997 its matched the S&P500 and is up 700%.  Gold miners however, they had some major mining ETF on there, up only 55% in that timeframe.

Couple of thoughts I had.  Obviously, a lot of money gets spent on "picks and shovels" so to speak and those returns suggest very strongly you are better off holding the physical asset.

That said, compared to a lot of Australian mines which are extremely remote and dry, the rise and Shine prospect in central Otago with ready access to power, water and spare parts for machinery, (can be airfreighted to Queenstown airport only one hour's drive away), seems to have some significant advantages.

My ten bagger on Mineral resources which owned Waihi mine decades ago probably gives me more appetite to have another go especially seeing as this has the potential to be several times larger than the Waihi mine.  I'm guessing economics of scale come into play a lot.

Modern portfolio theory suggests having around 5% of your portfolio in alternative type assets.  I rather own gold or gold miners any day of the week, which has proven to be a useful store of value for thousands of years than crypto, tulips, deer, goats or whatever else is the latest craze.

Interestingly, my good friend who designed the water treatment plant at the Waihi gold mine told me the other day that technology has improved a lot in the decades since then and they can treat the water being discharged to a very high standard.  I'm no ESG enthusiast by any means but I know they use some nasty stuff to extract the gold so I am pleased to hear that.

Anyway, it's been an interesting ride so far, up ~ 50% in just 6 weeks.  Maybe on my way for a ten bagger again, let's see.

[Dolcile]

I've just had a quick look. So correct me if I'm wrong...

It looks like they are saying project NPV is NZ$1b (@10% NPV).  Firstly I'd say a 10% discount rate for an early stage gold mine, seems extremely low.

Secondly with a market cap of $430m relative to the project NPV (even at 10%) it doesn't scream 10 banger potential..

[Basil]

Waihi still going long after it was supposed to be uneconomic.  They can only estimate the resource based on the early stage drilling done to date.
10% discount rate not that high now but by the time this gets going and interest rates are a lot lower.

[teabag]

I guess at the end of the day is mining for a start up like Santana Minerals just a gamble. And yes - nothing wrong to spend an evening at the casino (with a prior determined budget of money you can afford to lose) or to invest money into Lotto tickets as long as the money does not go from any other essential bills one needs to pay. So - absolutely no issue about putting money into a mining start up with little diversification, as long as one considers the invested capital not different to a Casino chip.

Quite agree with your tenor BP, but think visiting the casino is different - you know before your visit (or should:), that your expected return is going to be negative, the price you will pay for a few enjoyable hours of ambiance and flashing lights.  I expect, on average, to get a return on SMI, but as you say, history shows that most gold miners go belly up (or get absorbed by another) after some years, eating thru a lot of capital before finally giving up.

If any of you have time and patience, visit the New Talisman (NTL) thread on the other site for an example.

[BlackPeter]

Quite agree with your tenor BP, but think visiting the casino is different - you know before your visit (or should:), that your expected return is going to be negative, the price you will pay for a few enjoyable hours of ambiance and flashing lights.  I expect, on average, to get a return on SMI, but as you say, history shows that most gold miners go belly up (or get absorbed by another) after some years, eating thru a lot of capital before finally giving up.

If any of you have time and patience, visit the New Talisman (NTL) thread on the other site for an example.

Good reference to the NTL thread. While I never really followed them, I remember that the thread has seen many years of (groundless) hope and increasing frustration coming through. Certainly another great resource for hopeful investors to do their research before the plunge - just to help managing expectations.

And yes, you are right re the casino comparison. One would certainly hope that the average return for gold startup's is positive (rather than at the casino, where the odds are always against the player). However - to be honest, I don't know whether this is true. I only found in a brief research a reference that the chance to turn a promising anomaly (i.e. promising drilling results) into a money making mine is less than 1% (another reference said 0.1%).

However - I don't know, where on that path Santana sits. I understand they invested already into several sets of drillings, i.e. their odds should be definitely better than that, and I don't know either whether the total money invested by all gold startups is smaller or larger than the total money made by all gold startups.

The latter would be an interesting point for prospective gold mining investors. Does anybody know and have a reference?

[Basil]

Gold hit another all time record overnight on the US market, around $2,580 an ounce U.S.
Gold for December delivery over $2,600 an ounce and up 35% this year.
Interesting segment on Gold this morning on CNBC.  Since 1997 its matched the S&P500 and is up 700%.  Gold miners however, they had some major mining ETF on there, up only 55% in that timeframe.

BP, that's not start-up's per se, but the major gold mining ETF CNBC quoted was only up 55% since 1997 with the physical commodity itself was up 700%.  All the evidence you really need that you are better off holding bullion than gold mining shares.  I have some silver bullion already so this investment, while acknowledging is more speculative, sits alongside that position.

In terms of it being a ten banger, it is already for those that got into this in the early days in early 2021 on the ASX for under 20 cents.   How much more juice since it was listed on the NZX a few months ago, time will tell but it's a huge resource and is already, based only off very early-stage drill results, said to be more than twice the size of the Waihi mine.   Waihi has been going for decades and was as mentioned earlier, very lucrative so I am happy to ride this for quite a few years and see where it takes me. 

[Left Field]

Anyone interested should check out the back story of Macraes Mine Otago (NZ's largest currently active Gold mine producing over 5 mill ounces of gold since 1990.) 

Suffice it to say as I recollect it, the Aussies got a bargain at NZ shareholders expense.

After listing on NZX circa 199O and attracting NZ shareholders $'s
https://natlib.govt.nz/records/22186830?search[subject_text]=Macraes+Mining+Company&search[path]=items

Around 1993 threats of closure and hard times drove down the SP and led to the company exiting NZX (and takeover by Oceana as I recall)

https://www.nzherald.co.nz/business/hard-times-for-oceana-gold/ZDTD5UJT76554VSIXGWZ44NO5Y/

Once the shift to ASX and OceanaGold was complete..... Oceana started finding fabulous 'new' reserves.....
https://www.mining.com/oceanagold-extends-mine-life-boosts-reserves-at-macraes/

I wish investors well.  I'm happy to give this one a miss. (JMO...GLH's)

[Basil]

The back story on the Wahi gold mine.  Interesting times in the 1980's with Mineral resources and was quite an adventure.
https://www.waihigold.co.nz/education/history/timeline/

[Basil]

3:1 share split is all go
https://api.nzx.com/public/announcement/438845/attachment/428065/438845-428065.pdf
Santana shares on fire.  I'm up just on 70% in less than 2 months.  If only all investing was this lucrative.

[Basil]

Great to point out the risks but back stories about how overseas companies have diddled Kiwi's are pretty common and that doesn't stop us investing in all sorts of things now.  Besides, I can't sell this being in such a strong uptrend because I'm too scared KW will give me a really good thrashing if I do lol  (price at time of editing, $2.65).  3:1 stock split will take it back under a buck...for a while.  Once they get consent for the mine, I think we're off to the races and this will end up being several times bigger than the Waihi mine.  What could possibly go wrong lol

[Basil]

Annual report.  https://api.nzx.com/public/announcement/439077/attachment/428336/439077-428336.pdf

[Basil]

Santana made the cut for fast track approvals process.  Page 7 item 2 in the PDF included in this article.
https://www.nzherald.co.nz/nz/politics/livestream-government-to-make-fast-track-approvals-announcement/EJ4QKFMPTRD3RGHT2ZBUF4Z5F4/