Ann: Sale of Bibiani Gold Mine for US$90 million in cash, page-9

Net debt drops to USD130m in 12 months once they get all the funds from the sale of Bibiani - that does not look too bad. It will also save some $5-7m in C&M costs per year.

But at some stage they will need to find the money for the Tabakoroni underground mine (cost around USD100m) for which they will not have been generating enough surplus cash unless the gold price goes higher/Syama sulphides operation is fixed). So while they are building that mine net debt will increase.

The Mako mine should be back to generating a lot more free cash flow next year, or perhaps late 2021 given the advanced state of the cut back currently being undertaken. However, Syama's roaster will have a significant shutdown period this year and there is no certainty that they will have resolved the low head grade from the underground mine so I doubt there will be much surplus cash generated in the rest of 2021.

IMO the Bibiani sale to the Chinese firm failed because the locals in the region objected to working for them, given their tougher approach to managing their overseas operations in Africa/Ghana.

I am a bit heartened after the listening to the two conference calls (local and UK) that things may improve operationally at Syama underground and the total costs may be brought down as a range of improvements are made. I liked the new COO who is headquartered in Europe but is currently on site at Syama providing a down to earth summary of their actions to improve the operations. However, I am not yet convinced that the ore grade issues can be easily resolved and are merely a temporary ore dilution problem, and its the ore grade that will have s big bearing on the amount of gold recovered and cost per ounce of gold produced.

It seems best to wait and see the extent to which they can actually resolve the problems at Syama - there is no hurry to buy shares and I can not see the market moving the share price up for some time, especially as the gold price may at best just chop around for another six months.

What the COO said about the hiring of new technical staff confirms the view of one poster who indicated that quality staff had been leaving Syama due to JW's mismanagement. That would explain why they had a major roaster breakdown and a pit wall failure that put the finances of the company in jeopardy. It has also probably been a key factor in other operational issues that have driven costs higher. But I do thank JW for promoting RSG so well that I was able to sell my shares at $2.12 in 2016. I wish I had then just moved my money onto EVN rather then trying my luck again here, at much lower levels, with only one trade making a useful return.

GLA.

loki