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Thanks for posting that, GGPThruandtru.
Much appreciated.
SoS
You make a lot of sense, Tex. I can understand CYA. And I like the fact that SD is quietly and efficiently getting on with the job.
I haven't sat on them lately, so - sitting on Paddy's hands.
ATB:)
Jet, the second a broker puts pen to paper it is always a cover your own backside excercise. Risk factors, EV, conservative ounces. Fine. Blanket / grey statements about other discoveries (and putting a value on them) is the same. For the broker, there is always an out.
They are now using the term ‘developer’ and ‘multiple re rate’, purely iro of HAV. We can see their valuation method, and we all know that 12m oz is going to at least double. So does the broker, they are smart people. They can’t say right now, for example, that a good portion of a 30m oz + ore body will be over 2g/t and 0.3% copper. But they know, and so do we.
Developer and multiple re rate. I’ll take that for now.
Neither a hint etc. It’s just a fact. Hit somewhere else and it’s game on. Basic common sense.
Thanks, T&T.
Re this line, 'Should the regional exploration programme across the Paterson discover another Havieron style project then we believe that this would be transformational for the shares.'
I'm not sure how I take that. It's either a big hint or leak regarding upcoming news of another 'discovery' [ours or someone else's?] or they're saying that the current Havieron discovery isn't good enough [for the 'market'] to warrant raising the SP by a 'transformational' amount. Havieron is a stand-alone de-risked Tier 1 world class asset. What don't they get about that?
A very long way of saying this will be £ not pence. I guess JBER must be nearly done then ;)
GGPthru.. 26p @ $646/oz . With the new price of gold that will be 29.25p @ $714/oz and that is with a 50% risk ..( which I believe is way too high) so on 12m Oz we are worth roughly 60p per share unrisked :-)) .. that is a huge laugh as we will be well above 12m Oz ... try doubling it !
This would be nice while we wait for Havieron to be developed
"Should the regional exploration programme across the Paterson discover another Havieron style project then we believe that this would be transformational for the shares"
Thanks for this. It really is an easy share to accumulate at these levels and then just sit and wait for the re-rate.
Continued...
We believe that the market is now anticipating a continuous stream of positive exploration results from Havieron but see significant upside as the resource is updated and the pre-feasibility study completed. Should the regional exploration programme across the Paterson discover another Havieron style project then we believe that this would be transformational for the shares.
End
Continued...
Catalyst rich – Stock offers numerous short-term catalysts as Havieron continues to be drilled and progressed further; to date, exploration results have been positive with the most recent set further suggesting that the resource has potential to grow. The main catalysts for the shares should be the results of the ongoing 65,000m drill programme that is planned for 2021 at the project and resultant updates to the resource. We expect a pre-feasibility study for Havieron in H2 2021 – this will be key as it will put some weight behind the numbers – followed by a feasibility study next year.
Entering the next phase – Mine development commenced in February with the box cut 90% complete and the surface works 85% complete. Mngmt expects development of the portal to start over the coming weeks; Newcrest is continuing to progress the approvals process with an objective of achieving commercial production within three years (aggressive but feasible given existing infrastructure and Newcrest’s track record in large-scale underground development). Another key element in the company’s transition to a developer, Shaun Day was appointed new CEO recently, taking over from Gervaise Heddle. His previous role as CFO of Northern Star Resources, where he oversaw the company’s market cap expansion from AUD700m to AUD8bn over five years, positions Mr Day well to lead Greatland into its next phase. We expect this new phase to merit a developer multiple rerate.
Building towards a multi asset company – Greatland holds 560km2 across the Paterson region; outside Havieron, projects include Juri (also JV with Newcrest), Scallywag, Rudall, and Canning (all 100% owned). The discovery of a second Havieron-style target would be transformational for the company. Beyond the Paterson, the company has a portfolio of wholly owned projects spanning across c1,160km2 with a mixture of gold and base metals (Ni, Zn, Pb, Cu). Greatland’s growth vision:
Juri JV: progress exploration programme at Juri which commenced in April 2021,
100% owned tenements: unlock value by systematically progressing through priority targets, and
M&A: complement inorganic growth.
Copper exposure – c20% of Havieron revenue is estimated to be derived from Cu, providing diversification benefits.
Valuation:
Our price target of GBp26 is based on an EV/ounce of USD646/oz, assuming that Greatland ultimately retains a 30% interest in Havieron and 12Moz is ultimately delineated with a 50% risk weighting. While the stock receives pushback on its premium valuation, the average USD EV/oz value for the Australian mid-tier miners is now USD714/oz, following the rally in the gold price, which is a premium to the global peer group. This is typical for Australian gold miners with domestic assets because of low security and operating risk and tailwinds through weak currency (especially those with a major JV partner).
Small note sent from Berenberg...note the “multiple re-rate” - mentioned twice...Mr Shaun “multi-asset” Day is working for us and we just need to sit back and relax. Great note in my eyes and still conservative.
Revisiting the Buy case for Greatland Gold (GGP LN; market cap £818m)
Greatland is a gold and copper developer advancing its flagship Havieron deposit in the Paterson region of Western Australia in a JV with Newcrest (the largest Aussie gold miner). Havieron, and the surrounding region, remains one of the best exploration targets globally in terms of scale and is also located in a low-risk jurisdiction with a tier one partner. Greatland was one of the best performing shares in the market last year but has been trading down c40% ytd. Jonathan Guy recently upgraded the stock to a Buy as the sell-off in shares seem overdone given that positive drill results have continued to highlight the world-class potential of the asset. We think the pullback in the share price presents a good entry point with new leadership spearheading a multiple re-rate.
Here is why:
Strategic commitment from Newcrest – Havieron is set to replace Newcrest’s Telfer mine; it is located in close proximity (45km) to Telfer, where existing infrastructure can be leveraged to process Havieron ore under a toll-treating agreement. This will not only expedite the path to production and deliver optimised project economics, it addresses Newcrest’s production decline as Telfer nears the end of its life. The farm-in agreement with Newcrest should take Havieron through to feasibility study for a minimum of $65m in expenditure. Newcrest holds a 70% interest in the project with the option to grow this another 5%. Significantly, juniors that have a major JV partner, trade at a material premium to those that have attempted to self fund and self develop – Greatland’s decision to partner with Newcrest was the correct one.
A significant discovery – The Paterson is one of the most prospective provinces in Australia for the discovery of world class gold-copper deposits. It is fairly underexplored but has become an area of exploration focus with discoveries of Rio’s Winu project and Havieron (opened up by modern geophysical techniques). We expect Havieron to be developed as a large-scale underground operation with the deposit likely initially developed as a high-grade sub-level open-stoping operation (bringing CF forward) and that a block cave could be added later once the operation is fully developed. The potential here is substantial with an initial resource estimate of 52Mt @ 2.0g/t Au, 0.31% Cu for 3.4Moz Au, 160Kt Cu or 4.2Moz @ 2.5g/t AuEq. Havieron is possibly the best exploration asset out there ticking all the boxes with both grade and scale and in a tier-one mining jurisdiction; if of similar scale to Telfer, then we are looking at a 14Moz producer with c400koz of production annually over 36yrs. The resources remains open at depth.