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Wishbone Gold PLC: DEEP DIVE

Wishbone Gold sees opportunities across operations as strategy pays off

With operations in Honduras back on track and costs coming down, Wishbone's margins are set to rise.
OVERVIEW: WSBN The Big Picture
Investors should look out for a streamlining of debt, firm cash flow, and improving sentiment
  • Production ramps up in Hondurus after parnter receives licence to operate plant and equipment on first mining and processing joint venture site

  • Margins set to rise as reverse integration strategy begins to bear fruit

  • Opportunities seen in all areas of operations


What Wishbone Gold does:

Wishbone Gold PLC (LON:WSBN) is an AIM and NEX-listed firm operating in the precious metals market.

The company is organised into three operating divisions - exploration in Australia, gold trading in the United Arab Emirates and gold production in Honduras.

What Wishbone owns:

The group holds four large scale exploration licences in North Queensland covering over 34,000 acres in an area known for significant mineralisation. These operations include the Wishbone II, II and IV licences and the White Mountain project.

In Honduras, Wishbone has a joint venture with Sion Honduras SA for gold production in the area.

In Thailand, a new entity, Asian Commerce and Commodities Trading (ACCT), has been set up as a joint venture between Wishbone and a local Thai partner with connections to the royal family. This puts the trading element in the country firmly in place. 

The group owns Precious Metals International Ltd and its wholly-owned subsidiary Black Sand FZE.

Based in Dubai, Black Sand FZE trades precious metals and provides capital investments to small and medium scale mines to help improve their cash flow and increase production. The business currently operates in Columbia, Honduras, Chile and Peru.

Inflection points:

  • Wishbone’s Honduran partners, Sion Honduras SA have received a license to operate the plant and equipment on the first Honduran mining and processing site under their joint venture. Now it has obtained the licence, the venture has accelerated production and Wishbone expects to be shipping product to Dubai in the first quarter.
  • Wishbone in December raised £300,000 before expenses through a share placing to support the plan to accelerate production from the newly licensed Honduras gold facility. It followed a £567,000 share placing in October to pay off its equity stand-by facility with financier D-Beta.
  • In 2017, Wishbone's sales almost doubled to US$8.2mln, driven by the expansion of its operations in Africa. 

Blue Sky:

With operations in Honduras back on track and costs coming down, Wishbone's margins are set to rise as its reverse integration strategy begins to bear fruit.

Wishbone has said it sees opportunities in all areas of operations, particularly in Central America, Africa and Asia.

“The geographic spread is beginning to provide some resilience to our trading and, as we complete the reverse integration process, supplying expertise and equipment to artisanal miners, this will serve to lock up the supply chain to a greater extent and improve margins,” said chairman and chief executive Richard Poulden.

“With this spread of sources of gold over multiple continents we have a solid trading base for the future."

Investors should look out for a streamlining of debt, firm cash flow, and improving sentiment.

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Wishbone Gold PLC Timeline

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