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It's just now about what they can get away with.
Sad thing is if we had the project. With a very low amount you could prove we are on a 10 to 20mt deposit. So our claim might be limited to 6.7mt and some guessing blue sky.
Master stroke by indian gov
Have followed De Grey for some time as it has a world class discovery, although appears fairly priced.
Here is their DFS from last September for their 6Moz @1.5g/t Hemi deposit; https://degreymining.com.au/wp-content/uploads/2023/09/20230928-ASX-DEG-DFS-Equity-Raising-Presentation-lodgement.pdf
P11 has the key info, at the DFS gold price used of $1800 it has a post tax NPV5 of A$2.9b (£1.5b)
De Grey's market cap today is A$2.4b / £1.25b
Bhukia at 6.7Moz @1.945g/t is certainly comparable to this, although obviously in a different jurisdiction with many unknowns regarding infrastructure & cost to mine etc.
£3.00! to clarify!
Allenby Capital reckon around 3.00 per share if I remember correctly.
I will take a 20 to 30% swing on that either way!
I think Bhukia is much much bigger than we think, it's not until they start working on it that they may find it's true value, but as long as we get our share that's OK by me.
I doubt we will get the full post tax npv.
Maybe the market cap of similar companies with similar deposits.
The NPV assumes certain prices, excludes operational issues. It will be smaller than this. Degray is 1.5bn mkt cap. Their npv is probably 5bn?
The pre tax NPV will be far higher than $1.2b with gold prices at $2150 and rising, and I suspect that is a good part of the reasoning for the apparent gov strategy.
A brief review of the history of this deposit provides further clues as to why we are where we are;
From the PAT website;
"In 1993, Hindustan Zinc Limited (HZL) applied for, and was granted a PL, completing 4,000.3m of shallow diamond drilling which resulted in an unclassified resource of 8.7 Mt at 2.0g/t Au. Initially the focus of HZL was to see if there was the potential for mining the oxidised mineralisation processing via heap leach. The trial was not successful and the findings by HZL led the company to let the licence lapse in 2001"
When Hindustan Zinc got the PL in 1993 the price of gold was around $400oz, gold traded lower throughout the 1990's,and bottomed out at ~$250oz in mid 2001, they almost certainly let the license lapse because the economics wouldn't have made sense at $250oz, especially not via heap leach...
Indo gold picked up the Bhukia license in ~2003, when gold had recovered back to it's early 90's prices but was still in a 20 year downtrend... between then and 2008 that changed in a major way and I suspect Hindustan Zinc's feasibility studies looked dramatically different with gold at $900/oz!
15 years have then gone by to reach where we stand today, and now gold sits nearly 10x higher than when Hindustan held the license, the assets won't have changed one bit, but the economics will have utterly transformed.
A fascinating special situation the likes of which I've never come across before.
They key here is. Will the sale cost be taken as valuation of potential damages.
If there is a risk the gov can sell for 500m, but we claim 1.2bn. Then it becomes a pressure situation for the gov.
Is the 500m is taken as all we are entitled to get then they have no risk.
This is rhe key point i think
Sorry Gallmat
Gallant
Probably reality has not sunk in that they might have to pay out say $1.2 B which may wipe out the NPV arising over the lifetime of the mine
OR
They think they will just turn a blind eye to the international tribunal award in which case we should be able I believe to go after the state owned assets wherever situated - I.E. BANKS
This has to be the most bizzare situation.
Someone is going to sue you for stealing an asset.
But you are going out and telling everyone how valuable it is !.
Some further media coverage of the impending auctions;
https://myind.net/Home/viewArticle/first-ever-e-auction-for-gold-mines-initiated-by-rajasthan-government#:~:text=Geologists%20from%20the%20Geological%20Survey,an%20area%20of%20940.26%20hectares.
"Anandi remarked that with the auction of gold mines, Rajasthan will now be recognised on the world map as a gold mining state."
Given the rhetoric in that article, is it any wonder that the local court dismissed our case?! Can you imagine the pressure that the judge would have been under...
I have watched gold stocks for long time. You cannot read accross like this.
1. What is recovery
2. Grade
3. Strip ratio
4. Access to infrastructure
5. Processing flowsheet.
All i think is if indian gov said could be worth 1bn, you use that as the floor in your calc.
Wow, so they paid 12.55% of 2016 spot, if they used the same calc here with gold at $2100 they would have to pay $263/oz... base case on the JORC resource of 1.74m/oz would value it at $457m, however based on the 6.7m/oz defined by the GSI it would be $1.4b.
Looking good to me
I looked at market comparables.
degray mining. aussie deposit. Slightly larger resource, lower grade, no by products. 1.3bn usd
greatland gold: aussie deposit. 30% interest in project. underground mining up to couple of km so harder/expensive. 350m gbp.
Just read an article ..(bit out of date feb 2016!)
Vedanta won India's first auction for gold mining..they paid 12.55% of Indias Bureau of Mines gold price of $1087 per oz.
I have email from ceo. He is OOO until 18th with limited access to email.
Nothing will happen until CEO is back in office so time to chill probably for 2 weeks.
If you email him you will get same response :)
I think in an rns pat said noa in qtr 1 ..so anytime now.
No way they would hand it back after all this.
So that is why i think we might put damages in soon
Notable that it's being sold as a mining license, tells you everything you need to know about their plans going forward.
£18k registration fee to access the docs - presumably they will have to disclose the size of the resource...
I am trying to ask lcm if the bid would have any impact on claim. But moat likely it has to be no comment
Maybe or maybe not Etj...they might keep the winning bid private?
Auction is 8 weeks today - that'll come around quick enough. Am expecting an update from PAT before then, but equally I wouldn't be surprised if the NoA is held back until after the auction, as there will be a definitive value on the prospect by that point.
Unrelated but there is a lot of buzz around Enviva currently. The market is pricing in bankruptcy for next week, 20% short interest.
A lot of their shares are held internally or by institutions. If they don't go bankrupt on Monday, those shorts need to cover, and there aren't many shares to do so.
If they go manage to not go bankrupt, there should be a short squeeze next week.
The best case is arbitration in my opinion. Who wants to work with a government that's spent nearly 20 years cutting you off and betraying you? There's no trust left. If Mark Bolton of all people couldn't get a successful negotiation, there's no point.
If by some miracle they granted the license, they'd find another way to cut us out. PAT need to get the money via arbitration, and say goodbye to Bhukia.