The comparison should be made against other gold miners and I can think of many producers that provide more compelling investments at this time. But just to avoid misunderstanding, in a gold bull market I see value everywhere in the sector.
Newcrest are earning 70% interest but they are not taking it through to production. I can't recall exactly what the terms are but it is likely either resource definition or FS. Considering that the market cap. is £370m now that is assuming a huge resource. The grades are great but it is deep so capex will be high.
I can think of several producing miners with decent deposits (much more than GGP's share will ever be) where you could buy them all for less than GGP's market cap.
I am not sure that most people appreciate the extent of KSK. BKM is the most visible aspect but only a small part. There must have been $100m+ spent on this so far and they have only scratched the surface.
RE: Not impressed with the Hedging!26 May 2020 12:36
I should point out that the hedge was rolled over for more than one quarter so the company had full exposure to the gold price at the time but the price of gold has remained stubbornly high so they are closing the hedge now. It is a short term issue but obviously one that puts people off.
RE: Not impressed with the Hedging!26 May 2020 12:32
The hedge was put in place to guarantee repayment of a significant amount of debt as well as being a requirement for part of the debt package. That said, it did appear to be extended beyond what was really required which turned it into a more speculative punt on the gold price.
I agree. I think the whole KSK contract here is amongst the prospective in the world. ARS have only scratched the surface so it would be a shame to sell the lot. Actually, it would be more than a shame. I have been waiting to find out what is in some of the targets for so many years that my hair has gone grey. Particularly Baroi.
RE: Cant believe this has even help above 80p07 May 2020 14:02
It's a traders plaything at the moment. Or at least it should be when the published spread is reduced. The death spiral loan notes will make traction virtually impossible from here when they can convert at a 35% discount to VWAP.
That is terrible. The subscription price is bad enough (but, given the recent rise, explainable although the reason for that rise.....) but the loan notes are really poor. I don't think that I have ever seen a 35% discount for a VWAP conversion price. Death spiral+++. Look at the impact to the shares in issue.
It is difficult to suspend something that has never happened. I would certainly agree that the whole dividend thing was handled badly. There was definitely a sense that a maiden dividend would be announced but in the end the dividend 'policy' merely said at some point a proportion of the free cash flow would be distribute. Now, considering the price of Vanadium collapsed around then and the company is still in the process of investing greatly to move towards its vision to become 'vertically integrated', there is no free cash flow to distribute - they feel that better things can be done with their cash. They may be right (and in the current environment the 'may' should really be 'definitely') but the whole dividend saga was rather disappointing at the time.
Simpy Wall Street is just generated from information that it can publicly access. There is no guarantee that the underlying data is accurate (it frequently isn't when I have looked further into these things previously). If you know the company well then you will understand the reality of the situation (e.g. director's share awards) and the reason for dilution when it has come (they actually don't dilute much at all unless there is a strategic opportunity where it makes sense to do so). I don't completely dismiss Simply Wall Street but I would ensure that I knew the facts before taking the analysis at face value.
For anyone using these sources of information to determine when to buy and sell shares, I recommend leaving your money in a bank!
It's incredible but the activity is mainly with the May futures that expire shortly. June futures for WTI are still around $20. Absolutely nobody wants to take delivery if oil at the moment but if you can store a couple of million barrels in your backyard, you might make a killing!
If the approach is to greatly suppress the spread such that very few people get the virus then you will be doing that every time the virus crops up (it will) for years to come which will have an ongoing and enormous impact going forwards.
Better to manage the spread such that those catching the disease have the best chance of recovery (I.e. without crippling the NHS) in one go.
With most viruses there is the potential for someone to catch it again but these cases are exceptionally rare. It doesn't mean that it has mutated significantly. It is not known whether the case in Japan was immuno suppressed.