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Basically, Newcrest Mining have the option to acquire an additional 5% interest at fair market value as soon as Stage 4 is completed. Achieving all of the Stage 4 requirements completes the Farm-in Agreement.
Crystal ball reading here today let's be honest its pure speculation, Khyrsos you become an exspert over nite give all a break!!.
Nice one bronson.
I don’t see the mcap being that much of an issue in negotiations personally unless NCM decided to go for takeover in which case it wouldn’t exactly be difficult for GGP to extract more value with talk of future earnings from HAV… fair market value of an asset will take into account everything including what it’s gonna be worth should we not lose that 5%. I think NCM would give a fair price especially if they thought that in doing so we would use the money for further exploration and be deeply embedded in a relationship with them, why bite the hand that feeds so to speak.
Just opinion of course.
Notrader . I didn't say that .. that is copied direct from the GGP website
I think it’s the 27/10/21.
Hi Mr Bronson, That's a fair point you make, but another potential risk and I stress potential, would be for NCM to want to exercise their option immediately after publication of PFS and well before upgraded MRE.
Now I'm not suggesting NCM would do that, but it would be a pure commercial decision.
Could someone please tell me if it’s two weeks today - uk time - that we get the next results?
Thanks
Can we do a sweepstake on how many questions he starts his answer with "Look, ...."
I reckon 85%
Hi notrader,
Thanks, maybe this is a question we ought to be raising with SD at the next Q&A session as posted by TallchapJG yesterday, I would certainly have thought so.
https://twitter.com/donaldleggatt/status/1445417120691630083?s=21
Jiffy, Mickey - the NCM document you refer to is not the detailed agreement, merely a press release outlining the key points of the JV. There is much more detail in the GGP RNS of 30 November 2020.
To clarify the point in my earlier post; once NCM qualify for the additional 10%, it also qualifies them for the additional 5%, but there is no reference to a timescale for them to exercise it.
Lenz - you posted "Earn an additional 10% Farm-in Interest and qualify for 5% additional option
Within 24 months(from Stage 3)"
In the GGP RNS of 30 Nov, (https://polaris.brighterir.com/public/greatland_gold/news/rns/story/w1je54w) the 24 months refers only to the additional 10%. The 5% is referred to in the next line "Newcrest retains its option to acquire an additional 5% interest at fair market value" and there is no limiting timescale attached.
Thanks, Mickey
Been reading the 5% Conudrum thread and all a bit grey, but is it?, Just hope GGP were not to desperate at the time of signing up with NCM :O)
'The Havieron Project is operated by Newcrest and under the terms of the Farm-in Agreement which commenced in May 2019,
Newcrest can earn up to a 70% joint venture interest through the expenditure of US$65 million and the completion of a Pre-
Feasibility Study over a six year period. At the end of the farm-in period, (May 2024 ?) Newcrest may acquire an additional 5% interest at fair market value.'
To me in my simplistic way of thinking , the above statement infers, it is most likely that a decision unless agreed by both parties to bring forward as such , will NOT be agreed before May 2024, and so by which time the 5% of the whole of the Havieron gold and copper asset value will be worth considerably more than it is today will be evaluated.
One would have to see the nitty gritty details of such an agreement to make a valid conclusion etc. Obviously both parties require sufficient time as others and Hydro have already pointed out since it will take some considerable time and much further drilling to arrive at the value of Havieron resources/reserves in order to arrive at a FMV at the appropriate time that will require a third party / JORC valuation? IMHO.
Found this very interesting for anyone curious about all the numbers and projections of taking a large find to production. From DeGrey, the other big Oz resource find of 2020.
https://hotcopper.com.au/threads/ann-mallina-gold-project-scoping-study-investor-presentation.6329627/
Here it is again ....
STAGE 4*
Newcrest incurs an additional US$20m in expenditure in relation to the Tenement Blocks and delivers a Pre-Feasibility Study
US$65M
Earn an additional 10% Farm-in Interest and qualify for 5% additional option
Within 24 months(from Stage 3)
70%
(POST-STAGE)
Newcrest must have met the milestones in the four-stage Farm-in
Option to acquire an additional 5% interest at fair market value
75%
Zoros, that's not what is on the GGP web site I copied earlier, once stage 4 is completed but it states they have 24 months after stage 3 to get the 5%. so the way I look at it stage 4 is the completion of the PFS and they have about 18 months left of the 24 to purchase the 5%
Very clever Loggy, like it (thumbs up emoji)
Stillbemused - Thanks you are nearly correct, I think it is 5/30 ie16.6% of GGP to get the 5% they can get at FMV.
Separately from any calculation of FMV this means for anyone to get 5% of GGP and by virtue of that 5% of Havieron the cost is today, £626 mill *.17 = £106 mill, prior to any increase that this buying would create, I suspect because of the minimum number of floating shares that the price would soon double to 32p, making it £212 mill or there abouts.
I have no idea if this is more or less than FMV but I assume it still under values the 5% at FMV substantially, personally I do not see that NCM will buy the 5%, although it would put a real value on Havieron and GGP
There seems to be an assumption amongst many that the 5% FMV consideration from NCM will involve a cash payment. There are alternatives, and given that most people seem to recognise the problems of determining values for future exploration, one that seems likely to me is that there could be a negotiated agreement for ongoing payments for a period, perhaps extending to the life of the mine. For example, there could be a lump sum payment, followed by annual royalty style payments of up to 5% of revenue (or perhaps profit) from mine output. This could resolve the problem of trying to forecast future resource growth.
My anagram machine told me:
Havieron PFS Out?
Au? Hope Nov First
Well Max, put it this way, replace loaf of bread with bananas and maybe it would be more fitting.
ATB, only kidding
Viking
27/10/21 when we receive Newcrests quarterly results.
Pmsl nice one
Someone will win the kudos lottery and will predict correct day for the PFS.
Someone will predict it every day until it happens!
Put me down for November 16th.
Serendipity guys, serendipity!!
Christmas... unexpected gifts. HOLD TIGHT,