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Jiffybag.
Agree that we're some way away from deciding what to do with any profits, however would suggest that your views on share buyback are a little cynical.
The raison d'etre of publicly listed companies is to improve the value for its shareholders.
This can be achieved by either distributing profits via dividends or by improving the share price....or both.
A share buyback scheme would normally require the prior approval of shareholders and, it would benefit shareholders in two ways:
Firstly, all other things being equal, a share buyback should improve the SP. A 10% share buyback should improve the SP by 11% as the same market cap is now covered by the remaining 90% of shares.
Secondly, any future dividends which are distributed should be greater (per share) than if there were no buyback. In the scenario above, future dividends should increase by 11%.
IMO, share buybacks are not simply to reduce dividends.
ATB RA
Matty,
Yes agree, except the principal reasons for those whom are pursuing such strategies ie Shell, et al, is to make a saving on paying out dividdends in the main, I would strongly suggest.
Spade - not bleak at all. I think you missed the point, which was for any future funds raise, of which there will almost certainly be (that's not a bad thing btw), my preference is for that to be weighted towards debt rather than equity. That was all.
Jiffy - share buy-backs are what lots of companies do when they have excess cash - they buy shares on the market (i.e., take them off the market) and that means fewer shares out there, higher value for remaining shareholders. It's a good thing.
Before that happens, IF at all.
Nothing like a 'Word Soup' essay to concentrate the mind?
Re: Buying back shares?...what would that be for then?
Only case in my mind for that would be a saving on paying out dividends, no where near that stage as of yet , many hurdles yet to be got over before that happens, it at all.
Overall, I personally prefer debt rather than even more share dilution.
Jeez Matty & Speedie, you don’t half paint a bleak picture for GGP going forward.
Firstly Matty, who’s shares are they gonna buy back ? Mine, yours, or just some imaginary ones that seem to be floating around inside your head.
Speedie you say “Debt is ok with low rates but no one knows if rates will go into the teens or even higher”.
All forecast are for interest rates to start to decline in the not to distant future, not as you portray, by going into the teens.
And let’s say you are correct, and they do go to say 10%, it doesn’t mean GGP won’t be able to service the debt. I think you may have forgotten what it was like to live before 2007/8 when interest rate borrowing was anything between 8 & 17%.
The very low interest rates that we have been accustomed to over the last 17years are not the norm as you well know, they have returned to the mean average of what they have been historically for quite some time, and you more than anyone else here should recognise that fact, especially when for as long as I can remember, you have been stating that the POG would go parabolic if gold returned to the mean average of peoples investments.
I stated some weeks ago that I won’t get drawn into any discussions regarding what the future of GGP entails, until I here it from the horse’s mouth about what the BOD’s plans going forward are. All this speculation about the if’s, but’s & maybe’s serve no purpose at all. It’s akin to the old proverb “If my aunty had balls, she’d be my uncle” !
I just don’t understand why so many of you get your knickers in a twist over things posted here, that haven’t come from the management.
There’s a time to act & react, but right now it’s not that time. Until news filters through to us shareholders, there’s absolutely nothing to do except be patient, unless of course you believe in conspiracy theories, of which a few here try to convince you they exist.
Chill. SD has been in this situation before. Talks take time, we have good backers and a great asset. It’s just a matter of time.
Speedy - I hope at some point in the future we are able to buy back shares with excess cashflow (or use it to keep building out asset base), but you'd also like to think the cost of buying back shares would be much greater than the cost of servicing debt - certainly the case if this goes where we think it can. As you say, I'm sure SD and the team are all over the financing options - and equity likely a part of that as lenders will likely insist, but as a retail share holder I'd like to see the near term (1-3 year) risk put onto lenders, if things go as we hope we'll rue the interest payments but be more than happy with the impact of long term, undiluted, cashflow on share price.
StRuDeL
>>>> comma, the apostrophe
Go and take the pi somewhere else, is this a chit chat for investors or a place for asking to have tea with the KING as you are impliying?
2.52m
Hi Zoros I should have explained calcs. At the moment we still only have 30% of 8.4m oz so approx 2.8m oz tho I think we will have between 20m and 50m oz if we attain 100%
Majorsuccess - how much gold do we have? Try again please?
Z
Thanks for your reply (as ever) Speedy - fingers crossed we see some true positives to the SP by Q3 2024.
Hi Matty. Not if stock is bought back with excess cash flow. Debt is ok with low rates but no one knows if rates will go into the teens or even higher. I am no expert on high finance but SD is and i assume he will do the best deal. ATB Speedy
Sorry I forgot $£ exchange rate make that $125 in ground price but still incredible
2nd try at posting! I’m very confident that this will rocket in the near future. Our mcap is now only 280m and we have 2.8m MRE so that values us at $100 in ground per ounce. Has to be the bottom of price range now just incredible imo
I’m very cofedent
Raising through equity effectively dilutes cashflow in perpetuity, raising through debt does so until debt is repaid. I have a strong preference for any raise to be debt heavy - not least as I believe cashflows will cover the interest easily and allow the debt to be repaid - or as we see in most companies, refinanced - typically, once a company is up and running with steady cashflow, only the cost of servicing the debt is reflected in share price, the assumption being that any loan can just be refinanced as and when needed.
Hi Malva. I have always preferred equity over debt and with current interest rates even more so. Having said that, the idea of short term debt to get to production then an equity raise makes good sense. I am sure SD has all bases covered to achieve the best deal for all. ATB Speedy
Hi Red. That is the big question. The RNS announcing 100% Hav and Telfer ownership deal for (insert 1 of 20 possible funding parameters) along with the FS and DTM, will "blow the bloody doors of" Just for fun 1st Sept. ATB Speedy.
Hi SocialistB,
I think the bank syndicates will require some equity for additional debt but I like your main point for being more debt heavy and paying this down faster with excess cash flow. A 50% cash sweep on excess cash flow is already agreed on and this instinctually feels like a good option.
Thank you for your post.
I’ve often thought in the event of a raise Convertible Loan Notes may be one of the ways to go, alongside others - borrowing the cash from Wyloo or somebody and paid off/converted to shares at a later time.
I think that GGP has been negotiating with Newcrest for buying Telfer and 70% Havieron for sometime and now Newmont that is why SD has been improving his BOD and other bods before NEM came in the scene. The change in the debt facility was also negotiated before NEM TO of Newcrest. My feeling is the decision on Telfer/Havieron will come soon and should have been sooner if the ponds didn't start leaking and now the stop in production has thrown the spanner into the works so to speak. If the boundaries of the TO had been sorted but not signed then for sure GGP will want sureties on the additional cost of repairing the ponds and restarting the plant.
Don't forget NEM have to produce the FS and decision to mine which are contractual and would affect the TO price if not resolved.
The good news is my Storks came back to the nest after disappearing when GGP share price plummeted some 3 years ago so i presume the SP will now increase when they lay the eggs as they did before, fingers crossed. DM
@Malva
May I suggest full on debt first.
For the first 6 months to a year, maybe 2 at a stretch.
As we we will be the 100% owners of Havieron and getting gold out of the ground, the share price should hopefully be multiple if today's share price.
In my view it would not be to bad to issue extra shares to pay down on the debt at that point.
Yes, we will be diluted, but we will also have dealt with the debt.
Greatland can then later on always buy up shares when they fall below a certain price and that way around both help to stabilise the share price and reduce the numbers of issued shares.