Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Really great confirmation today. Farm-out done, news pending on next steps and farm-out process for next c.25% reinitiating.
To my mind other potential farm-inees should take great comfort from the NEO deal completing and moving ahead. This is a great endoreseemnt for JOG and will hopefully encourage a deal forwards. I can't think of many /any other companies with this risk/reward profile at this current valuation IMHO
The SP lingers, but as we know with JOG it doesn't take much to ignite it - and there's a lot of newsflow to come
It seems strange that BEY hasn't appeared to put up much of a fight in all this. Discussions have been seemingly hush hush or behind closed doors, there's been no PR or external comms exercise to help drive the company or put pressure on Ryan. LOGP has come out beating its chest a bit more with threats of international arbitration and there hasn't been anything here. I'd have thought Goodman would want to take this through the courts/judicial review.
A couple of very positive reminders about value creation in the results. Both suggest further news of an additional farm-out could come in the months ahead.
"JOG will retain a 50% working interest in the GBA following completion of the farm-out (with 12.5% of development costs carried by NEO) and to catalyse further shareholder value, the Company intends to farm-out additional GBA equity such that it ultimately retains a 20-25% fully carried interest in the development"
"The Company intends to farm-out additional equity in the GBA licences in order to ultimately retain a 20-25% carried interest in the development. Discussions with companies potentially interested in non-operated stakes have been underway as part of the farm-out process and these remain ongoing."
FrazerJ, to me it reads the company intends to farm out further equity so that by the time FDP happens JOG will be retaining 20-20%. I don't read it as saying JOG will wait till after FDP to then farm out the next tranche.
"In my view this is an excellent deal which delivers a base case of value through development of the GBA with significant upside via farm-out opportunities if it moves from a 50% stake to 20-25% on a fully carried basis. And make no mistake, these are good terms, under the circumstances I really couldn’t have expected anything better.
That is because a 12.5% carry on a development of this scale plus cash and of course the optionality I have discussed above is monumental. Perhaps more important is the industry validation and endorsement it brings, credibility for the project that has always been there for JOG management in whom I personally have always believed.
Overall this deal unlocks the value that the GBA has promised after all these years and that is worth a great deal in this market place in which 2026 production will in my view be worth considerably more on these metrics. Placing a value gives a significant multiple of today’s share price, the market has not assessed the numbers correctly and consequently I am putting a target price of £10 a share on JOG."
While things have been frustratingly quiet on the lease undertaking front, raising this amount from the market suggests they have a reasonable expectation that they will need it for something sizeable - like an appraisal well. This is not just a keep the lights on fundraise for a couple of million and fingers crossed some positive progress is taking place behind the scenes.
NEO are a sizeable player backed by private equity money. They would only farmin here if they saw future value (which means value to JOG too). This deal underpins that from JOG's perspective. I like that the 12.5% carry to production alone is worth more than JOG's mcap. Plus this sets a price floor for JOG farming out a further interest of its remaining 50%.
This should get some good coverage in the press. Farmout in the current climate is positive
Regardless of when LP drops, the confirmation of V'raptor drilling here hopefully puts a catalyst on the SP, and underpins things from here. Which means the next three months could get v v exciting. We know V'raptor will drill, and in the meantime the LP could come in at any time. And even if it doesn't and there are more delays, the Vraptor drill keeps the SP very interesting and optimistic IMHO
That's my reading JC. Last time there were told multiple interested counterparties were on the scene but nothing more concrete that that. This time we've been told there are heads of terms in place and an exclusivity agreement - feels pretty far along in terms of progress
Let’s see if this rockets today.
Bought themselves another month. Clever idea to put the exclusivity in there - I think the very least was needed to placate shareholders. Interesting to see how the share price will move throughout April
If there is any link with Ithaca - and, based on JOG's non-execs that's surely within the realms of possibility - Ithaca's results next week would seem a reasonable time and place for farmout news to appear.
If conversations had materially broken down i'd have thought an RNS would be required. In the absence of that, one can only infer all hands must be at the pump trying to get something over the line
Since Dec 2018 this has oscillated between 2p and 8p - and each time MATD has a bit more to say for itself. First it was the rise for the Heron/Gazelle, which was a discovery but the price fell back, then it was the rise for the exploitation authority, which was awarded and still price then fell back due to delays. I added each time but no doubt like other LTHs was frustrated to see the SP slip back towards 2p. Now, though, we have the rise for the land permit and Vraptor - both with monumental potential. The point being - we are in a totally different place to 2018 when this hit 8p, we are cash rich, have bags of potential ahead, and if the company felt undervalued in 2018 or 2020, it sure does now. IMHO/DYOR of course.