How's this short going kray? Still in?

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MadMax69

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08/11/22

10:24

Post #: 64643517
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Originally posted by kray: ↑

I am shorting TIE. I am writing this piece to share information to new holders or existing holders.

The resource found is being hyped above its worth, the Abujar construction schedule is unrealistic and the costs may be underestimated. As a result TIE is overvalued.

1) TIE touts Abujar as 3.5MoZ gold operation. 2MoZ is based on inferred resource confidence which can be discounted due to lack of confidence. The remaining 1.5MoZ is mainly in indicated status (below the best measured status).

2) The orebody is narrow vein. This presents significant issues in dilution, modelling and estimation. SR 6:1 also does not help.

3) The 2021 DFS estimated $200m USD capex. This figure has not changed despite industry wide escalation in costs.

4) The company is reliant on share placements on funding. It is likely to do this again in the coming months as reality of costs bites in.

5) The forecast of Q4-2022 gold production is overly aggressive based on the site construction update pictures. There are still many facilities remaining to build and finalise. Then there is the timing of the ramp up or tuning the plant. I think even Q1-2023 could be an optimistic target, lots of potential delays.

6) TIE has ~1.1bil shares and options. At 60c per share the market is placing $660m valuation on this. For the same price you can buy better gold assets and producers. The above mentioned risk v reward is not justified at this valution. It is likely the company will come back to the market a few more times for funding. Even then the operations is high risk. Similar to SO4, lots of promises made and hyping and flops at the finish line when the moment of truth smacks it in the face.

DYOR

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How's this short going kray? Still in?

TIE Price at posting: 73.0¢ Sentiment: Hold Disclosure: Held
3 Upvote

0 Great analysis

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