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On price of gold, one might consider that the original bank prospective lenders, also subject to FS criteria, required some gold price hedging to protect repayments. I can easily imagine similar requirements for more cash from them. It should not prove onerous during full production.
Morning Speedie, I concur with what you say regarding the POG, and hopefully making greater profits once producing. But what I was disagreeing with, was your mention of possible interest rate rises, which of course would burden us if they were to ever happen.
All I was trying to say was that even if they did increase, then just as folk shop about for a cheaper mortgage deal, then so do businesses, or at least they will try to negotiate with their current lender a better deal. Upto now I don’t know the terms of which the borrowing was undertaken, whether it was at a fixed or variable rate, but one thing I do know, is, if the POG remains at this price or as you and many believe, goes onto new ATH’s, then it shouldn’t really make any difference if the interest rate does increase a couple of percentage points, as gold will have risen a whole lot more.
Hope that clears up why I posted what I did. It wasn’t because I was having a dig, as for the many post you write I agree with. It was just your mentioning of possible interest rate rises continuing, that I took umbrage at.
ATB
It’s pretty apparent that a good result for acquisitions and up to 100% capex for more than the market cap for a company with no cash to speak of and no income, would be to get the cash and pay for it after commercial production occurs. It’s maybe a tall order.
The ‘heavyweight’ board has work to do.
Hi SAS. You need to screw your neck back in. This is just a debate about the possible funding routes that SD could take and at no time are we painting a bleak picture. I am convinced that gold is going higher thereby increasing profits when producing but we are not yet producing and will need funds to buy back the farm. Not much else to discuss at the moment while we wait for news. ATB Speedy
Newmont are an example, mentioned in Q and A’s. Reduce debt by these divestments, and improve shareholders eps by 1bn. dollar buyback ( though I think that latter may still be under review )
Share buy backs are a multi faceted tactic.
It reduces the number of shares in issue. This should recalculate the value by spreading the same market cap over a lesser number of shares.
It uses some profit that would otherwise be available for dividends/investment in the business. This is tempered by the expected increase in value of the remaining shares.
I do not have enough knowledge to gauge if there is any tax benefit (or cost) to the company, but for PI's it will exchange some (taxable) dividend income for (only taxable if realised) capital gains.
It may have an effect on liquidity. Assuming that the II's generally see buybacks as positive and hold onto (even increase) their holdings, then the buybacks have to come from the market, thereby reducing the number of shares in the (more liquid) pool of private investors. This, in turn, can feed into increased value. Of course, if the company can negotiate a block purchase from an II, then this may well increase liquidity and reduce value.
Consideration should be given for a consolidation before a buyback scheme is implemented.
Generally, I would love a defined buyback scheme being introduced. it would encourage me to (at least) hold and likely to increase my holding.
Can’t see the fuss. Authorities renewed at AGMs. Won’t have anything to do with terms on which any funding is raised, though there for later use if appropriate. In passing, it’s about the only way shareholders can own a bigger slice of the company without buying more shares - something Mr. Day may have been alluding to at one of the town halls which I think caused minor confusion on here.
Further to my previous. Before the naysayers get in with their doom and gloom.
I indicated that the SP should increase as the buyback is performed in order to reflect the increasing share proportional holding for the same MCAP. I do recognise that as the cash is reduce to perform the buyback then the MCAP should also reduce and therefore, the buyback should be SP neutral.
However, the buyback will likely reduce free float and therefore improve strength of demand abd it will also improve the future dividend per share..
ATB RA
Sorry "by dumping " 😲
China is the big buyer of gold right now buy dumping US debt and buying gold .
As long as gold continues to climb or stay at these levels , then Greatland's share price will catch up at some point 👉 👈 ! I'm holding right the way though this journey ! Good luck folks 👍 DYOR etc., etc..
https://www.fxstreet.com/analysis/china-is-dumping-us-treasuries-and-buying-gold-202404212302
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