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ASX would be a good move and I have no doubt SD is well and truly down the funding road; either way Bamps another road block out of the way. It has been very good day irrespective of a 3.67% dip
With this scenario in mind of Ggp retaining the 30% is why I asked Shaun in London if there was going to be a dilution would us Private investors be able to participate and he went through the options saying the Rights Issue route is expensive and laborious, the Primary Bid route is not ideal for PI . The Australian system is far easier.
I personally wouldn’t mind a dilution to clear the debt if we could participate.
He was quite forceful in that he would rather see a reduction in the share issue and repeated a few times about numerous high street banks wanting to lend him the money.
I think debt is going to be the way forward.
I am biting my nails cos I can see Panorama going for a farm in. There’s so much happening all around it and nothing happening on our licence. I don’t want that to happen.
There you go Freddie that is one brokers take on it - sprott did not waste any time on making their assessment.
This is one take on how we stand today.
Updated note from Sprott. Shows strengthening of the balance sheet with small impact to cash.
“Ticker: GGP LN Market cap: £$437m REC. (unc): BUY
SCPe PF cash: ~A$25m Price: 10.4p/sh
TARGET (+1p): 18p/sh
Project: Havieron Country: Australia (WA) RISK RATING (unc): HIGH
Value up, with minimal impact to cash, is the short story. Recall earlier this quarter the residual 5% of Havieron was independently valued at US$60m as at December 15 2021, implying at US$1.2bn valuation for the 4.3Moz AuEq at the time, or US$276/oz. Firstly, this implies a simplistic US$1.8bn value for today’s resource, or £537m for Greatland’s 30%, showing good upside to the current £437m market cap. However, we estimate a NAV of ~A$5bn based on an enlarged high-grade operation (SCPe 9Moz converting unclassified, infilling, and pro-rating 200m past deepest hole) and potential bulk operation (SCPe 6Moz adding lower-cut-off bulk material, and adding 50% and 100% to the Northern and Eastern Breccia footprints). Although very much long-term objectives, if achieved that would value the 5% at >US$170m, making this a great outcome for Greatland. Value isn’t just about NAV though, but also about share count, so it is pleasing to see that Newcrest’s decision has little impact on cash. Although we think most our estimated ~A$90m funding (plus any exploration spend) will be funded by debt, a condition of any NCM buy-down was that proceeds must be applied to the NCM US$50m loan to Greatland, leaving Greatland only US$10m lower in cash now, but as much as A$250m higher NAV based on our enlarged high-grade, and bulk mining, scenarios. Even at spot 0.6xNAV, this equates to an immediate net accretion of ~US$50m / £50m / 1p/sh, making this accretive on a short- and long-term basis. Removing the US$60m cash takes 2p off our valuation, but adds 4p to our 1xNAV, with 1p lost from FX movements. As such, making no changes to our DCF, we maintain our BUY rating lift our PT from 17p to 18p based on 1xNAV5%-1850 of a 9Mtpa SLOS operation at 668koz pa payable AuEq on a 9Moz inventory, plus a nominal valuation of half this (per ounce) on a 6Moz caveable estimate. With 86m @ 3.1g/t the deepest hole to date, and the Eastern Breccia potential emerging as a high-grade, not bulk as we model, centre given 82m @ 3.0g/t AuEq drilled recently, plus potential base-metal zone there given 1% Cu, we retain our enthusiasm for depth extensions. Similarly, with the 5% share valued at over market cap, we see no repercussions to Newcrests’ M&A interest. Looking ahead, drilling and the year end DFS remain key catalysts along with potential debt/funding of GGP’s share of the build”
Hi All. Best to leave the funding route to SD he is the best man for the job. ATB Speedy
Hi Goldenl. You are correct but would you want to pay LIBOR+ 8% if LIBOR reaches 10% or higher. Also bank funding would be at harsher terms with outstanding debt. ATB Speedy
Was it not agreed that the USD50m plus interest would be repaid gradually from ore mined and treated at TELFER, with the permission to repay early?
The 'plan' was to repay NCM was it Mumbo..... only if you authored and/or agreed to that option exercise - which Shaun didn't.
Shaun was very clear that he inherited the option exercise from Gervaise and co, that he didn't like it as due to the prescriptive nature meaning NCM had the advantage to obtain 5% cheaper than actual FMV due to conservative price decks etc.
He has been very consistent in wanting to retain 30% into production and attempt to fund and wasn't happy we'd lose the 5% as thought likely NCM would buy so the silver lining was at least we pay some/all of the loan off was his consistent narrative.
Shaun's always seemed confident about wanting to retain 30% and funding into production, we'll find out if his confidence is well-founded in the near future but the team has the experience and skills to get this done IMO - have a good weekend all.
Hi Mumbo. Easy peasy. Raise $30mil with equity issue (to SHs) buy back stock at a latter date. Give our partners the used funds back and then raise a further $100mil via debt with good terms. In 2024 we will be receivers of substantial amounts of gold @$2500/oz if not higher and all will be good. I have an suspicion that SD will come up with something slightly better. ATB Speedy
The 5% for 60mm deal wasn't a good one for GGP - a legacy of the buy-in that's now gone away.
There will be a need to repay the loan from NCM and to raise further funds. The REALLY good news is that if we were to dilute in order to raise funds it will be from a base of 30% hav ownership, not 25% - that's fantastic news for all of us shareholders I reckon! Certainly in my mind I'd factored in we would be at 25% when/if there was a fund raise via a placing.
The plan was to repay NCM and remove the charge from the asset. Does this charge have any material impact on terms of the debt funding going forward
I don;t understand what you appear to be implying when you say, "GGP not being able to clear this debt"?
The debt is scheduled to be 'cleared', as always was the case, via repayments, which will occur once production commences at Havieron, and not before.
The 5% that we now maintain, and not 'gifted', IMHO, to Newcrest Mining, clearly increases our value, which is positive.
With NCM electing not to opt to take the option and subsequently GGP not being able to clear this debt. This means NCM charge against GGP's share will remain. GGP may find it difficult or may not get favourable terms for debt funding from institutions, forcing it to raise funding via dilution. They will now have to start the process pronto.
Could this be the hand that Sandeep is playing to acquire GGP on the cheap?