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See on twitter from paddy that NCM could be a takeover target. Interesting times ahead.
https://twitter.com/financialreview/status/1622071534658506752?s=46&t=2t8LW8Ps1YRslnIcIOxnuA
We have a highly engaging MD and a good comms dept.
Anyone genuinely concerned could / should ask for comment directly from either of the above.
If there are any legs in the story the company will have to react to the media speculation at some stage.
This is one take on how we stand today.
Updated note from Sprott. Shows strengthening of the balance sheet with small impact to cash.
“Ticker: GGP LN Market cap: £$437m REC. (unc): BUY
SCPe PF cash: ~A$25m Price: 10.4p/sh
TARGET (+1p): 18p/sh
Project: Havieron Country: Australia (WA) RISK RATING (unc): HIGH
Value up, with minimal impact to cash, is the short story. Recall earlier this quarter the residual 5% of Havieron was independently valued at US$60m as at December 15 2021, implying at US$1.2bn valuation for the 4.3Moz AuEq at the time, or US$276/oz. Firstly, this implies a simplistic US$1.8bn value for today’s resource, or £537m for Greatland’s 30%, showing good upside to the current £437m market cap. However, we estimate a NAV of ~A$5bn based on an enlarged high-grade operation (SCPe 9Moz converting unclassified, infilling, and pro-rating 200m past deepest hole) and potential bulk operation (SCPe 6Moz adding lower-cut-off bulk material, and adding 50% and 100% to the Northern and Eastern Breccia footprints). Although very much long-term objectives, if achieved that would value the 5% at >US$170m, making this a great outcome for Greatland. Value isn’t just about NAV though, but also about share count, so it is pleasing to see that Newcrest’s decision has little impact on cash. Although we think most our estimated ~A$90m funding (plus any exploration spend) will be funded by debt, a condition of any NCM buy-down was that proceeds must be applied to the NCM US$50m loan to Greatland, leaving Greatland only US$10m lower in cash now, but as much as A$250m higher NAV based on our enlarged high-grade, and bulk mining, scenarios. Even at spot 0.6xNAV, this equates to an immediate net accretion of ~US$50m / £50m / 1p/sh, making this accretive on a short- and long-term basis. Removing the US$60m cash takes 2p off our valuation, but adds 4p to our 1xNAV, with 1p lost from FX movements. As such, making no changes to our DCF, we maintain our BUY rating lift our PT from 17p to 18p based on 1xNAV5%-1850 of a 9Mtpa SLOS operation at 668koz pa payable AuEq on a 9Moz inventory, plus a nominal valuation of half this (per ounce) on a 6Moz caveable estimate. With 86m @ 3.1g/t the deepest hole to date, and the Eastern Breccia potential emerging as a high-grade, not bulk as we model, centre given 82m @ 3.0g/t AuEq drilled recently, plus potential base-metal zone there given 1% Cu, we retain our enthusiasm for depth extensions. Similarly, with the 5% share valued at over market cap, we see no repercussions to Newcrests’ M&A interest. Looking ahead, drilling and the year end DFS remain key catalysts along with potential debt/funding of GGP’s share of the build”
SD and Sprott certainly think so!
https://sprott.com/media/5604/220819-ggp-scp-mre.pdf
That’ll do for me.
Just keep going Bamps and ignore the trolls. If I’ve learnt anything in life it’s that when people resort to personal insults in a debate/ discussion, you’ve already won!
Smile on when they attack you it just reinforces your point.
Hope to hear from you again soon!
Whilst I don’t trust NCM as money always corrupts, I do think this is a generic statement made in many presentations by many companies.
They can’t announce anything materially different at any conference unless it has been RNS’d to the market as price sensitive information.
Time to worry is if they are trying to say the same at the end of this month when they give their updated figures.
This share will find true value soon
Think Shaun was aware of a possible low ball offer when he did the placing. Whilst I wasn’t happy at the time in hindsight I say all credit to him and the Bod. This has put us in a good cash position on the balance sheet and bought us time to reject/ negotiate any silly offers made which may not have been the case if the cash was not there to move forward.
Also that cash gives other options for debt finance moving forward should NCM try to tighten any screws, if they even are.
I like many am grateful to the previous management for the path they set GGP on, but am totally convinced the current Bod with Shaun’s shrewd financial understanding will get us to a destination dreams are made of.
Mining is a slow, laborious and costly journey, but for those that get there the riches are incredible.
Patience will be rewarded
All IMHO
Havieron is without doubt going to be an historic find, talked about and compared to in the mining world for decades to come.
I really hope we get to see the end, not only to mine it and reap the riches, but also see the final size of the beast.
The strategic importance of this find to the future economics of not only Telfer, but possibly the future of NCM itself (ie them being able to fend off a takeover of their own) can not be overstated. They will want full, not just strategic, control.
SB knows it, their BOD knows it and and their shareholders should know it too!! Like some on here I expect this will see NCM make an offer for Hav, in the region of £2-3 billion.
For those able to hold should know that 25% of Hav alone will be proved to be worth in excess of £1billion, whatever games may or may not be being played for this 5%.
25p buyout this is not!!
Also remember, as listed by many on here ,especially @Bamps, Ggp has a number of other fantastic opportunities to commercialise once Hav is generating cash flow.
Again, 25p buyout this is not!!
I’m comfortable that SD and the Bod have played this situation well so far.
SD is clearly not a fan of this 5% clause and possibly can see this going to a drawn out arbitration process. Whilst not initially happy with the placing, it has put significant cash on the balance sheet that we can let this play out and not be forced to take a low ball offer.
This is what SD was brought in for.
IMO.
In my opinion SB tried his luck hoping SD and GGP would roll over and let him get away with it.
As it is he’s stirred a hornets nest, clearly upsetting both SD and the majority of shareholders both here and in NCM.
As it stands I think he’s made a tactical error that will come back and bite him.
He’s left us still holding 30% of the biggest gold/ copper discovery in recent memory, if not ever, which even he can’t stop the world seeing get bigger by the day!
I do believe this will be short term pain for Our long term gain!!
AIHO
The positive for me with NCM not updating the market as expected is that all well telegraphed “news” dates have passed. Traders have been using this to their advantage for months!
News for MRE2 and 5 % could drop now at anytime. Hate to be on the wrong side of the trade when it does!!
IMO