Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
QED
You are erroneously conflating two mutually exclusive issues, namely 1) exercise of warrants and 2) disposal of shares received from the exercise of warrants. Your comment "VendorX will inevitably want the price as high as possible at the point of exercise......who wouldn't?" is misinformed because there are perfectly valid tax reasons for *not* wanting the price to be as high as possible at the point of exercise if you intend to hold those shares beyond the exercise date and expect the price to rise further.
The warrants *will* be exercised before expiry because they are heavily in-the-money. What happens to the shares received by the warrant holder after he exercises those warrants is a complete unknown.
Just a few balancing points to these recent posts -
Lenigas was also in GGP very early, made similar comments about Havieron and was proved right. He worked at Telfer mine and ran Artemis Resources so he knows the region extremely well. He is a massive stock ramper but occasionally he calls these things correct. Basing any buy/sell decision on his participation in a stock or comments he makes is probably not wise, but he does add some useful insights from time to time.
The comments about warrants seem to imply underhand dealings but are a complete non-issue imo. We know Lenigas owns shares in Wishbone thus has an undisputed incentive for the shares to go up - what's the difference if these shares are presently held in the form of warrants or ordinary shares?
We have no way of knowing who owns the unexercised warrants you mention, but they are heavily in-the-money so will certainly be exercised before expiry. The main reason for not exercising warrants until their expiry is because it creates a taxable event and may incur an income tax charge assessable on the holder when exercised regardless of whether the holder then chooses to hold the stock or sell it. Typically holders will wait until just before expiry to exercise warrants to retain upside to the stock while also delaying as long as possible this associated personal tax liability which is assessed at the exercise date.
QED - the thing Wishbone has in its favour, that very few other similar AIM listed explorers can claim, is that the Chairman/CEO is a very large holder of the stock (he holds 16%). This is a big positive as he is highly aligned to other shareholders' interests and has a big incentive to minimise dilutive raises as far as is possible.
I personally think you are correct that Wishbone will raise within the next 12 months, rather than relying solely on an uncertain cash infusion requiring the triggering of accelerator clauses on existing warrants. A raise would guarantee the necessary financial resources to perform sufficient drilling on its tenements so that it can have a reasonable understanding of the size and commercial viability of any mineralised ore bodies found.
With regard to long term plans for a discovery - Wishbone has a very small team and outsources all of its exploration to third parties. The Chairman/CEO is no spring chicken and has experienced the pitfalls of mine development in his past life at Sirius, so I am reasonably confident that his preferred outcome would be to prove up a resource then sell 100% to a large mining company.
As others have mentioned, I think it's telling how quickly Wishbone acquired a second drill for Red Setter this month. I think this has all the hallmarks of early collaboration with Newcrest, who would be the obvious acquirer of Red Setter given the proximity to Telfer. Newcrest has been vocal about its interest in finding the "next havieron", so it makes sense that they would facilitate access to a drill rig in order to build friendly relations with companies operating exploration assets of interest to them. To me, this also suggests there is some confidence that the mineralised system they have found could be commercially mineralised - if there was significant doubt, I would have thought Wishbone would stick with the single rig until initial assays were received back to keep their cash burn rates as low as possible.
If/when there is a raise, my base case is that it will be done after initial assays, at levels higher than today's share price, with commitments from institutions and/or sophisticated investors with longer term time horizons than most PIs (e.g. Newcrest, Sprott, family offices, etc.). If this happened, I would view this as a very positive development.
QED - another possibility, which has not been mentioned here yet, is that Wishbone may negotiate with DDH1 to partially fund the exploration drilling through the issuance of Wishbone stock. This would reduce the cash burn and extend the run rate for Wishbone's cash on hand. DDH1 had a similar arrangement with Greatland Gold during their early drilling of havieron, so there is precedent for this move.
In Dec 21 the company was utilising a rig capable of RC drilling but not DC. We know they swapped the old rig out for a DC rig. The reported mineralisation is at depths beyond most RC rigs' capability, so perhaps the mineralisation was simply deeper than anticipated and the original interpretation of geophysical modelling was wrong?
Cela, you are simply wrong. Your inability to comprehend the key points from a handful of simple sentences is astounding. It seems you are saying, in your infinite wisdom, that you know better than the manufacturers of XRF technology. The paragraph I posted before was a direct quote from one of the main manufacturers in this space. Indeed, contrary to your suggestion, it would be highly misleading to mention XRF readings in relation to gold readings in an RNS due to the risk of a false positive. As the last paragraph I provided was clearly too taxing you to understand, I will repeat a couple of key points on XRF for you (quoted directly from an XRF equipment manufacturer, my emphasis added in CAPS):
1) "handheld XRF analyzers DO NOT support direct low level measurement of Au in geological samples"
2) "interference from other elements (e.g., As, Zn, W, and Se) CAN YIELD A FALSE POSITIVE Au determination"
Everyone understands this is an exploration play with risk attached. My complaint with you is your repeated cross ramping of stocks (which subsequently perform very poorly) and your demonstrably false claims about issues relating to this stock. The problem is your commentary may sound credible to unsophisticated investors and cause them to make misinformed investment decisions - like I said before, worse than useless.
Ignore Cela’s misleading and erroneous posts, instead focus on facts. Cela is confused and his nonsense posting might cause people to believe him and make poor decisions. Per a manufacturer of XRF tech:
“ It is common knowledge that handheld XRF analyzers do not support direct low level measurement of Au in geological samples (e.g., low ppm and ppb). The lab-based fire assay technique is commonly recognized as the method of choice for Au analysis. Au L-level X-ray lines are located in a very crowded area of the X-ray fluorescence energy spectrum. In this part of the spectrum, interference from other elements (e.g., As, Zn, W, and Se) can yield a false-positive Au determination.”
I see Cela is back with spurious posts in an apparent further attempt to deramp this stock. I shall adopt my previously proven strategy of viewing this as the perfect contra indicator and I shall buy more WSBN on Monday.
Remind us Cela, as you are in the business of making predictions on this board, how much has WSBN *risen* since you told us you were selling your holding here and slated Poulden (I'll remind you, it's risen > +50% since you sold and posted about it). As a comparison, how much have those other shares *fallen* which you shamelessly cross ramped on this board - it's mixed, but it seems that pretty much all have fallen and some have been complete disasters like EVR which has been suspended for months and lost its BoD.
UKtrader - you can align yourself to the likes of Cela if you choose, but check out Cela's posting history. He has done precisely what you have accused 1DAYMAYBE of doing, ramping stocks across this forum but with a pattern of aggressive posting history against anyone who disagrees with his views. Unlike 1DAYMAYBE, who has been consistent in his conviction here and added some useful observations to the board, Cela hops between stocks posting his bullish proclamations along with superficial and poorly considered commentary. Fortunately for us, we can see he is a false prophet through a quick scan of his posting history - virtually all of his stock selections have performed like dogs.
Popolo - with respect, coming on here, telling others they are being misleading and then commenting about GGP when you don’t fully understand the history to that company is not helpful and makes you look pretty silly.
GGP delivered several mineralised drill hits, including a truly world class discovery hole, prior to any agreement with NCM. During JV negotiations, interviews given by Heddle and Baxter clearly indicated discussions under NDA with at least two major potential partners (the second was thought to be Rio given their interest in nearby tenements).
Your comment about GGP having 100% of nothing without the NCM JV is objectively untrue. Perhaps you should jog back over to GGP and do some more reading, instead of polluting the board here?
First two diamond drill holes have both hit visible mineralisation, which appears strikingly similar to Havieron. Not sure we could ask for much more at this stage. Buying pressure and share price rise on Friday suggests a leak from insiders who obviously interpret this to be good news as well. Great start to the week!!
Thanks for posting the links Silentalker, very interesting.
The reference to "revenue" doesn't seem plausible to me. I wonder if he was misquoted or if that is very specific to that one mining licence due to its historic production.
If Malawi adopts a broad brush revenue-grab on mining developments, I don't foresee that as a positive step for the country - external investment would fall off a cliff and it would encourage companies to adopt aggressive transfer pricing strategies, eroding opportunities for in-country investment in upstream processing which will create further employment/taxation benefits.
Hopefully common sense will prevail and an agreement is struck which is good for all.
Scipio - while I agree that the points you note are not the primary reasons for an investment here, there is some logic to those points which adds to the overall investment thesis. I don't agree that they should be written off.
"Nearology" is a bonafide investment consideration, especially in the Paterson where there are numerous major discoveries in a relatively small area. Not only are the odds of discovery somewhat increased by targeting geologically similar anomalies to nearby proven discoveries, there is also the consideration of vastly improved economics in the event of a discovery given that Telfer Mine's facilities could potentially process extracted ore. Of particular note in Wishbone's case is the previous drilling by Encounter Resources on the Red Setter tenement - they performed shallow RC drilling and the drill bit stopped just above one of the main magnetic anomalies and detected significantly increased copper and gold in the last few meters of multiple drill holes. At the time, Havieron-style deposits were not known or understood. Due to various reasons including site access difficulties, Encounter elected not to follow up the RC drilling with DC drilling. Despite your assertions that "WBSN has dust as far as we know", I'm not sure I would agree - the latest magnetics modelling in conjunction with known past assay results provide compelling evidence of an under-cover mineralised body. The level of mineralisation is of course the main question now, and that will only be revealed upon receipt of assays.
Not sure I agree with your comments about the CEO either. Personally I would prefer my money invested with a seasoned operator, who is a trained barrister and was educated at the very best academic and business schools the UK has to offer. In my book this is vastly preferable to 99% of other AIM CEOs / Chairmen.
Concerning the comparison to GGP, I think anyone with any significant investment in Wishbone understands it's an early stage risk-reward play - if they hit a Havieron-style deposit at Red Setter, it's likely to appreciate by multiples of the current share price. As you mentioned, GGP will end up with ~25% of a world class asset so likely has a floor price around current levels, but due to its current market cap is unlikely to see % share price gains of the magnitude possible at Wishbone.
Wishbone is a very different company to a few years ago - now 100% focussed on exploration (previously largely a gold trading operation), chairman holds 16% of share so should be well aligned with interests of other shareholders, presently drilling multiple high priority targets which each have multi-million ounce Au-equ. potential, no debt, cash on balance sheet, no in-the-money warrants so minimal immediate dilution concerns, and appears to have made a new copper discovery in Queensland. Historic consolidation was part of a large restructuring exercise and is simply not relevant to the current company outlook.
Even in this market, evidence of a discovery at Red Setter is likely to have a strong positive share price reaction given Greatland’s past performance and the super majors’ known interest in investing in the region. Potential for a tier-1 discovery in a tier-1 jurisdiction with ultra low capex.
trader6 - I'm glad you know exactly how things will turn out here, with a crystal ball like that you must be wealthy beyond my dreams.
I make no predictions here - I simply provided an anecdote about self appointed trading gurus on the LSE board who claimed to have insight into future share price movements and lost out big time compared to me and others that simply held stock.
The problem with trading is you can miss out on the life changing gains. Years ago, several posters on the GGP board used to sing from the rooftops about their trading prowess, trading out every time they made low double digit % gains. When GGP share price took off, rising hundreds of percent, those guys had sold early and missed out.
Like you said, trading a slice of your holdings might make sense, but trading the whole lot can be counterproductive and you might miss out on the big payday if a significant discovery is made.