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I bought in here at 3p and sold out again at 11.5 thinking the SP had done quite a lot.
I personally think that PALM does not have the fuds or balance sheet to start a proper drilling campaign and they need to JV / Farm In and probably raise a significant amount of cash to get to a MRE on any of their prospects. So i am holding off until this becomes clearer to me.
Happy to receive any counter views if you think there is a different strategy here.
Thanks Blue
Thanks for the reply.
I looked at the investor update on the web site, I think it's dated November so PM prices are updated. They implied the free cash flow starts in 2022 after an investment period in 2021, basically new processing capacity. That's what I based my statement on.
I am still holding GGP but I am looking around for some alternatives when I sell my first 25%
Wow £1.35 - so it will rise in value from a market cap of around £30m today to £10.1 billion to become one of the worlds largest mining operations all in a year. Thanks Scoutt - i am definitely buying heavily tomorrow morning now.
Unless you mean 1.35 pence or a 3 x ish rise from 0.4 pence?
Thanks Blue
I think this is one to get into towards the end of 2021 as the cash flow model doesn't RMM have published shows the investment in capex not hitting the margins until 2022.
You may miss the early investor discount - but - this is probably dead money for a year.
Thanks Blue
Julian - i was about to write the same - also they use a big dose of an Oxidising agent too - hydrogen peroxide - so that would also attach to Carbon i think to create CO2 - Wabu can you check my homework here please - i only managed GCSE Chemistry!
Thanks 'cracking' information Wabu.
Imagine having read the PHE Brochure BEFORE investing !!
Thanks Blue
And thats your opinion is it Lenz ??
Lets keep this polite please.
WABU - so do they have to purchase CO2 contracts to release the CO2 created during processing / cracking? Thats a very interesting point you make - thanks Blue
ExtractAuDust.
Movement of ja people.
Thanks Blue
JET47
Years ago I worked for an Aussie broking team in London flogging small miners, late 80s early 90s. One of our teams Dad was running Fosters in the UK. They were new Perth money. They rented a big house near Chalfont. They had an old dairy in the garden and it was lined with original Delft tiles. The sons ordered a beer fridge, pool table, big stereo and turned it into the bar/den. One afternoon they took a sledge hammer to the tiles to modernise it a bit and make it look more modern. They smashed around 400 tiles off one wall. I told them they were rare but they didn't get it. Their old man had to pay a huge compensation fee to the owners of the house. I always wondered what a Delft dairy was valued at, any ideas??
I think that now the MRE is out there then some new investors who cant invest due to fund rules pre MRE should become involved on the share register now. Same later with the mining commencement - then GGP is in production not just exploration so its a different investment grade and can be bought more widely.
Thanks Blue
Not sure this is an issue - waiting for the production cash flow - any bank will issue a bond against future cash flows - don't even need to issue equity - just get some debt in place and issue some HY debt. Once MRE is in place then its a formality i would think. Could probably do it now but its better to have an asset estimate to lien against. I would guess - and i mean guess - that by March 2021 we may see some debt in place as a mining operations fund. Debt is simply future cash flows pulled forward.
Thanks Blue
I also agree - why not go to the market and say - look at our track record and asset base - we want to raise $30m to explore the final targets and then use the data as a position of strength to negotiate a true JV with a miner / Newcrest. To be honest with the future cash flow predicted from HAV and the cost of money so cheap it would also have been easy to create a debt issue and do it that way. With all the funds currently buying in top GGP placing new capital wouldn't be hard to the tune of £30m or so. Its what their brokers are for - selling shares to investment funds.
I dont know it just seems a weak strategy to me - and yes Redirons i agree its been great so far but i think could have been better. By the way for reference many years ago i was a junior on a broking trading desk with Tony Mahalski etc - look him up.
I agree - its not a great deal for GGP and possibly too early to make a deal too.
Does this maybe mean that Scally is a duster?? because if its not then why the pressure on farm in agreements right now.
Also the value of the farm in is quite low - and it should have some steps in it - use $25m and find 1m oz get 80% - find 2m oz get 75% etc ... say down to a 50/50 at 10m or whatever.
It suggests to me that GGP will be sold after the next 12-18 months of exploration.
Not a bad thing of course but could have been much better I think.
Thanks Blue
What time Thursday, because I have to go out between 10am and 11.30 to Tesco.
Thanks Blue
The chances of a takeover are Minimal. The board have already agreed to a reverse takeover (ahem 'merger') with a US listed company and the plans are to get this done around Q1 next year - so just for accuracy there is the lowest probability of a takeover.
Thanks Blue.
Broker Note
Yes i agree Dillon - in my experience you dont really want a broker note in an AIM stock as it usually means they are revving up for some corporate action - normally a capital raise of some sort - the brokers write the note to support the raise - its part of the corporate finance commission deal.
Brokers dont write notes for free!
The house broker will certainly write an update twice a year and i guess when MRE is out there - but they get paid for this in their annual broker charges - plus they get to inform the institutional buyers first ring about anything that needs buying / or selling of course.
A Natural Resources / Mining Specialist Team may write a note on GGP - but thats - you guessed it - because they are paid to do it - probably by funds who like the research team and pay them a fee each year for their wisdom - and / or via some trading commissions.
Thanks Blue
The AIM market has very poor liquidity - even in the favourite stocks NOVA, GGP etc ... there is very little. Its all OK if the market is more or less 'matched' so a few sells go to a few buys - the MM are happy because the take their spread and PIs are happy because they can buy and sell. But once the market gets 'FAST' yes thats a term and when it gets our of equilibrium and into Auction - then there more or less is zero liquidity.
MM dont have a huge risk allowance in individual AIM stocks and there is no derivative market to offset risk - i mean Options here - so if lots of Sell or Buy trades hit the market then the MM get long / short very quickly - this is why you get those great days when the share jumps 15% in a session and terrible days where it falls down the lift shaft for a few sessions.
The market is currently long of stock, too many sellers, but this overhang will go as buyers arrive at lower prices and as any investment funds that can buy AIM shares - and there are not many especially after Neil Woodford basically ended his career trading in AIM -via his Fund - start to review their price targets given the 40% haircut we just had.
That said - i still think that NOVA is a very strong investment case, is debt free, has hockey stick growth, huge international distribution channels, has a diversification plan, and is probably trading at 2x cash / NAV which makes it a target for a takeover and also makes it a candidate for a serious rerating.
The big Gorrilla is - does the current Covid testing revenue disappear - and if something remains what is the low tide mark and how do the sales/revenues curve down to meet the demand change - given the business runs at around 50% Net Margins - then each £100 that disappears from the revenues also £50 disappears from the profit before tax.
My opinion is that international travel, corporate events, 'rona cluster breakouts all will continue to require testing, as will populations post vaccine - unless its 100% effective and the virus does not mutate too much - and then what is flu and what is rona? Winterplex is a great product too.
Anyway - thats my view i am holding - Blue
Its based on Future Assumptions, given that a share valuation is the predicted and discounted total sum of future cash flows.
Thanks Blue
Yes Spud i agree with you - and as you know i have been in here since it was 3p - just keeping it honest for new arrivals.