Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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A possible vehicle to monetise Havieron
GGP could (once proven) demerge it's "Havieron Gold & Copper mine" into a separate company and effect a capital reduction to facilitate the spin-out and new listing of the "Havieron Gold & Copper mine" as an independent entity.
Following an initial MRE and feasibility study of the proven "Havieron Gold and Copper Mine"; GGP could announce that they consider the results of the Havieron project and the progress made substantiate the viability of the "Havieron Gold & Copper mine" as having the potential to be a standalone business and accordingly intend to proceed with steps for a spin-out, by way of demerger, and listing on a public market of a new independent company focused solely on the "Havieron gold and copper mine" business.
The rationale of this decision is that, as a standalone proven Gold&Copper Mine into a separate legal entity, " Havieron" could:
· Secure separate financial resources, with the goal of enabling accelerated development of the Havieron Gold and Copper mine;
· Allow Shareholders to benefit from both Greatland Gold's very exciting other tenements (yet to be proven) and GGP's proven "Havieron Gold & Copper mine" and the standalone value of the "Havieron mine" as it progresses through its own development milestones and the path to commercialisation and allow shareholders to receive the maximum potential value from Havieron Gold & Copper mine as a standalone entity.
The GGP Board would take the necessary preliminary steps in preparation for a potential spin-out, including the incorporation of a new subsidiary to hold the relevant assets. The Company will also put proposals to shareholders to obtain the approval necessary for a capital reduction which will be required to implement the demerger.
The approval of the capital reduction will enable the Board, in due course, to declare distribution in specie of shares in the new "Havieron Gold & Copper mine" entity to existing GGP shareholders.
Under this method, GGP reduces the corporate stated capital of its common shares by an amount equal to the fair market value of the "Havieron Gold & Copper mine" common shares, and distributes the common shares on a pro rata basis to its shareholders.
They could do the same with "Scallywag" if proven like wise all the other tenements if proven .
Just a thought - it makes sense because you can easily divest each separate legal entity on a full capital basis which I believe is tax efficient for the BOD and easier to assign value to each asset (tenement) as it becomes proven!
Just a thought ALB
Please share your thoughts with GH.
Hi 1gandhi - It's speculation but I really think this is a corporate structure that can accelerate value for shareholders as and when a tenement becomes a viable business - certainly maximises shareholder value including the key executives - anyway, I'm sure he has /is considering this type of exit strategy . ALB
ps. hopefully he reads this board - not all of it because some of it especially this evening is yet again being hijacked by idiots.
Bump back to top - discuss please
A possible vehicle to monetise Havieron
GGP could (once proven) demerge it's "Havieron Gold & Copper mine" into a separate company and effect a capital reduction to facilitate the spin-out and new listing of the "Havieron Gold & Copper mine" as an independent entity.
Following an initial MRE and feasibility study of the proven "Havieron Gold and Copper Mine"; GGP could announce that they consider the results of the Havieron project and the progress made substantiate the viability of the "Havieron Gold & Copper mine" as having the potential to be a standalone business and accordingly intend to proceed with steps for a spin-out, by way of demerger, and listing on a public market of a new independent company focused solely on the "Havieron gold and copper mine" business.
The rationale of this decision is that, as a standalone proven Gold&Copper Mine into a separate legal entity, " Havieron" could:
· Secure separate financial resources, with the goal of enabling accelerated development of the Havieron Gold and Copper mine;
· Allow Shareholders to benefit from both Greatland Gold's very exciting other tenements (yet to be proven) and GGP's proven "Havieron Gold & Copper mine" and the standalone value of the "Havieron mine" as it progresses through its own development milestones and the path to commercialisation and allow shareholders to receive the maximum potential value from Havieron Gold & Copper mine as a standalone entity.
The GGP Board would take the necessary preliminary steps in preparation for a potential spin-out, including the incorporation of a new subsidiary to hold the relevant assets. The Company will also put proposals to shareholders to obtain the approval necessary for a capital reduction which will be required to implement the demerger.
The approval of the capital reduction will enable the Board, in due course, to declare distribution in specie of shares in the new "Havieron Gold & Copper mine" entity to existing GGP shareholders.
Under this method, GGP reduces the corporate stated capital of its common shares by an amount equal to the fair market value of the "Havieron Gold & Copper mine" common shares, and distributes the common shares on a pro rata basis to its shareholders.
They could do the same with "Scallywag" if proven like wise all the other tenements if proven .
Just a thought - it makes sense because you can easily divest each separate legal entity on a full capital basis which I believe is tax efficient for the BOD and easier to assign value to each asset (tenement) as it becomes proven!
Just a thought ALB
@dave, not sure the point of copying the whole thing just to bump it, we're quite capable of checking the start of a thread to see what's under discussion. And for a long post on something that's not been discussed much, if you want a thoughtful discussion you might want to give people time to think about it before bumping it and demanding they discuss it.
That said, in brief, a spin-off is one of many possibilities. It may well be worth giving some consideration, but we still don't know if NCM is going to make an offer for our share of Hav, an offer for the entire company, or if someone else will come in and make an offer. Or even if there is going to be a bidding war. Or what the offers might be.
If someone wants to pay a high enough price, there won't be any need to take complicated measures.
@TMT - OK agreed - won't do it again - the whole point of my post is that you do this structure to entice a potential offer - you don't do it if you already have an offer - you place the asset on the open market and let the market give it a fair value .
ALB
For what it’s worth, I think deveri’s post is probably the most interesting post this month..
I actually remember reading - I think in the last set of GGP accounts on the GGP website that this type of exit strategy - monetisation of individual tenement assets was part of their stated strategy - might be wrong.
ALB
GH has mentioned divestment as a possible strategy to maximise shareholder value. They could start with Tazzy sites first. If successful could be a strategy they follow for other sites, though Tazzy sites appear to be regarded as “non core” at present as they are not Tier 1 sites.
''Our progress this year demonstrates our commitment to our five year strategy which remains to maximise risk-adjusted return on shareholders' capital by systematically advancing exploration across our key assets and seeking opportunities to monetise those key exploration assets whether through sale, joint venture or spin-out via initial public offering.''.....GGP Final Results : October 2019
The IPO reference is interesting and intriguing
Schlemiel - well found thank you ! I always remembered "Spin-out" - Makes so much sense for the reasons I stated
ALB
Hi Igandhi - it costs quite a lot of money to Demerge an asset into a spin off plus the BOD have to get shareholder approval - so I only think they will do this on sured up proven assets like Havieron - then hopefully Kraken, Scallywag et al
ALB
As per quote Schlemiel kindly reproduced, Board are keeping all options on the table, depending on what will “maximise shareholder value”.
That to me is very reassuring.