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It would, but terms would need to be agreed beforehand and I can’t see GGP letting 40% go at the same terms as Hav.
There’s no doubt in my mind that NCM will want SW but I reckon they will want to sit back and see what drill results we get first, while concentrating on the MRE at HAV
Newcrest are soon going to have legal ownership of 40% of E45/4701 until the Mining Lease is signed. That means they have 40% of Scallywag, Havieron and Blackhill South at least for a while.
Ggp are about to announce drilling at Scallywag.
Would it not be very tempting for Newcrest to offer an extension to the JV and keep hold of the 40% rather than relinquish it
Hi RationalAssessor
I hope for option 1.
Newcrest got 70% of what is found on 12 allotments for free.
Yes they had to pay 65 million to prove it up, but that is an expense they would always have to spend to justify spending a fortune building a mine at Havieron.
They once owned the tenement but gave it up many years ago. There might be a bittersweet feeling of not getting 100% of the asset for that reason.
But they could also look at it differently and be very happy that they have managed to secure 70% for free, despite giving it up all those years ago.
And why not settle with 70%. Why is this idea floating around that they must ABSOLUTELY have 100%.
Sure 100% will give NCM the full revenue, but it will also increase their expense enormously.
When NCM has paid a fair price for 5% and brought their ownership up to 75% as you suggested, that will hopefully be because they have a self interest in GGP doing well. (and no interest in seeing someone else buying it)
We need to be able to fund our share of the expense for the mine and we also need cash to prove up all our other assets.
A thing NCM are likely to benefit from big time, if the 2 BOD's have a great relationship.
In my view selling our 25% share in Havieron is downright stupid. We cannot get a precise result on the amount of OZ in the ground.
We will never get the maximum value out of the asset by doing so. NCM's extra profit on the 25% is our loss.
When they started mining Telfer back in the 1970's, they did not imagine they would still be going (strong) today. If there was anybody selling a percentage in the mine back then, then they have been grossly under payed.
And we should not put our self in such a situation.
We can always sell our 25% halfway through the mine's life expectancy (or better yet, even later)
Possible we might get a tickle from PRE, reckon we cobble together a minimum 33/34p one way or other .
Spooky Mickey cos I was going to say 34p, but I do think that requires something out of scally and/or pre.
So should 18p now up to the 14/8 plus 8p drills x3 and 7p for the MRE = 33p
Good results from Scally +24p+33p=57p for Xmas
Above conservative
I reckon that’s near the mark Mickey. MRE will be in for sure and things should start hitting up
33p
Hi, JJmack. Folks have made the comparison between GGP and Great Bear Resources before, in reference to the dramatic growth in share price. But what Great Bear have done is drill, drill, drill.
https://youtu.be/Kum4NjX6VNs
Great interview with Chris Taylor where he discusses this. They are in a position to release an MRE, but they choose to continue drilling to fully extend the known size of their discovery. And in that respect they control everything and put themselves in a very strong position, reflected in the SP. But even he says that with a large resource discovery no junior can independently become a miner. So, moving forward, if SW is as big as the data would suggest, realistically I would hope that GGP drill the nonsense out of it, funded by our share of Hav (either from our 5% sale), or, as Mickey just suggested, from the sale of our 30%. And then comes the deal of the century....
GLA. Hold for Gold.
While we are in dream-mode, anyone want to hazard a 31/12/20 sp? :)
Welcome JJmack. We will never imo be a miners , Greatland discover and sell and have done a wicked deal with Newcrest . Shortly after the soon to be MRE sandeep will pounce and a takeover will ensue . aimho
Hello
I am new to the board but have been following with much interest over the last few months (my shares date back before the flood of 2008/2009 ) I have now topped up again and was about to consider a post asking exactly your question because the answer can change the future of the company (and our fortunes ) in a very significant way .
As a contribution to the debate it strikes me that one of the key weaknesses of the independent explorer is having scratch and scrape to fund every new endeavour and having found something then being unable to prove the true worth of any find for lack of funds .The end result is what we have today where GGP have an extraordinary find but are /were in a weak negotiating position lacking finance when it came to proving the find and thus may (NB may) have resulted in a less than optimum agreement .
If in future GGP were able to continue their exploration as their primary activity ( and at which they are very good ) but fund it in such a way that they were able to negotiate from a position of strength ie with more proving done without the necessity to come begging to investors (or worse money funds /Banks) it can only be a good thing.
My suggestion then to my fellow owners --- (thats what we are ) is to support any move that ends with GGP as a revenue earning entity able to raise its own finance to prove future resources
This seems to me to point to some sort of tolling arrangement and if this can lead to a + - 15 year life as a conventional revenue earner then so much the better --- if in the other hand its better to take the money and run then so be it
I look forward to the debate
Regards and good luck to you all
Hi, RA.
I'm glad TMT got in ahead of me...
SW is our Ace of Spades... If Callum can prove that SW is another find of note, even if some of our 5% FMV has to pay for the extra drill rigs, then it's nearology to Havieron will project us into the realm of full buyout...
Still too many variables.
1. Does GH believe the independent valuation is a good one? Taking into consideration the possibility of drastically increasing POG?
2. As big as this resource appears to be, how confident will we be able to be in the value at that point in time?
3. What's happening at Scallywag in this scenario? Have we found a significant resource there? And how much cash is needed to develop it if we have? And what kind of agreement is on offer from other majors to develop it?
4. If we do have a significant resource at Scal, do we want to work with NCM on it, or not? If not, what would it cost to buy out of their right of first refusal, and can we get that release tossed in as part of the Hav deal?
I think if we have a resource worth developing at Scal and need funds to develop it, that would point towards doing a deal at Hav, rather than waiting for mining income to start coming in. If we don't need funds because we are going into another JV (with NCM or someone else) then there might be a case for holding the 25%.
I don't think NCM needs the other 25%. Not to say they wouldn't like to have it, I'm sure they would. But as long as the ore rolls through Telfer, they don't need to own all of it. So I don't think your #2 is based on a sound premise -- I don't think it is "worth more" to NCM. And I don't think they will pay more than they think it is worth to others.
One appealing option is to sell most of it to NCM and use the proceeds to pay a really nice dividend, but retain a large enough percentage to comfortably fund future exploration efforts. "We'll be glad to sell you another 15% but we want to retain 10%."
Hi RA
If I was in Sandeep's shoes I would want to hold back what funds I have and keep to the 70% at Havieron.
When the exploration drilling slows up I would offer Ggp the rigs free of charge to drill the rest of E45/4701 for another joint venture.
I would play the waiting game though to see what Scallywag has to offer before making a move.
That way I would have 70% of a much larger area closer to Telfer probably cheaper than the 5%.
Well that's my ramblings after a glass of Red :))
OK, let's move on a few months/years and assume that the MRE and PFS has been completed, an independent valuation of Havieron has been completed and calculated that, as a whole, Hav is worth £2Bn. NCM has decide to take up the option of the additional 5% and paid £100M to GGP and now owns 75%. NCM wants to negotiate with GGP for the final 25%.
What does GH do?
1. Does he push back and decide to retain the 25% and wait for the income stream 3-4 years downline and continue exploring the remaining tenements with a larger cash pot.
2. Does he try to negotiate a higher than £500M valuation for the remaining 25% on the basis that the remaining 25% is worth more to NCM, the risk being that negotiations falter and relations with NCM turn sour.
2a. If he decides to sell the remaining 25%, what does he do with the money? Retain a certain amount to fund exporation of other tenements whilst distributing the remainder by means of a special dividend.
Not wanting to debate the valuation of Havieron as that is a completely different discussion just trying to gauge the feelings on what should be done once Hav is confirmed as having a "significant value".
Bit of fun to debate on a balmy Saturday evening.
Regards
RA