Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Notes from Sunday Roast Podcast - 29 OCT 2023
https://www.ggpchat.co.uk/viewtopic.php?t=828
Thanks Goldworm\Bamps,
Obviously I was covering Tom's comments in the earnings call but what you're saying makes a lot of sense Goldworm if SEC reporting is less robust and they (and we) will need to maintain JORC reporting due to ASX and it is the most robust globally. Thank you for that, not the kind of insight most of us have :-)
Of course the CEO is going to proclaim they are more stringent than their competitors when it comes to any kind of reporting publicly. Fingers crossed it seems as if we shouldn't have anything to worry about. Will be interesting to see if they agree to peer review and\or how they feel about a GGP independent release given their own schedule for updating in their usual Feb updates isn't really that far away now.
NEM's CEO stated they'll be putting in place a Resource and Reserve Review Team (3R Review) from day one in November spending a few months by going into the 5 NCM operations to bring these to NEM definitions and from there establish resource models and develop mine/business plans to work towards and look to update all R&R in their usual February updates fro the combined portfolio.
He mentioned they report under SEC vs the JORC rules that NCM did so their are some differences and they tend to be quite stringent at NEM, but NCM too tended towards the same as we've seen in their reporting and studies as you'd expect from any corporation with multinational assets. So, I'm thinking we'll not see large differences when they complete this exercise although might see some reserves move to resources, but might be interesting to see how their reporting affected GoldCorp assets previously or try and see what metrics they use on their reporting vs NCM to assess that.
He also mentioned that they'd be moving away from IFRS to US GAAP accounting standards so definitions for stockpiles, sustaining capital etc.would change so there will be a lot to watch out for when the next quarters reporting is conducted in how it's affected NCM assets and NEM's overall position on initial integration but obviously will be a lot of follow up work including optimisation.
It is interesting as we know GGP is planning to ask them to peer review their MRE and Shaun and co. would have assumed much of the above and perhaps why Shaun decided to hold off as it became clear the transaction was confirmed. It is very clear NEM plan to update R&R's in Feb next year themselves so will they be happy to work with GGP on their independent MRE by peer reviewing or ask them to hold and wait for Feb when they plan to update their combined portfolio in the usual annual update and have brought NCM into the NEM models.
*Transcript Highlights from NEM Q3 Earnings Call*
https://www.ggpchat.co.uk/viewtopic.php?t=825
Bump...
There were a lot of really interesting bits of information yesterday in how NEM plan to integrate and manage the NCM portfolio, accounting and reporting of reserves and resources etc. yesterday.
*Newmont 2023 Q3 Earnings Transcript - Highlights*
https://www.ggpchat.co.uk/viewtopic.php?t=825
Newmont 2023 Q3 Earnings Transcript - Highlights
https://www.ggpchat.co.uk/viewtopic.php?t=825
Slides:
https://s24.q4cdn.com/382246808/files/doc_earnings/2023/q3/presentation/Newmont-Q3-2023-Earnings-Presentation_Final.pdf
Webinar:
https://events.q4inc.com/attendee/362063644/guest
The way i look at it is that nothing Sisu is saying is something that you couldn't just dream up as a theory using an anonymous ID, not one thing and hasn't been able to predict anything that has then played out so personally I'm not treating anything said as fact. Perhaps it turns out Newmont taking up a position... but you don't need unquantified rumours to make that leap for yourself.
p.s sAs - I picked up on the film link on the first web search after he turned up and aded it to my watchlist, looks like it has a decent rating and storyline, so thanks Sisu :-))
Fair enough CP, not suggesting they'll list out which assets they are divesting of course, more so an update on progress of integrating NCM assets into Newmont's corporate structure, early progress on synergies and further plans as obviously they'll combine some of the management etc. where they already had a presence and perhaps outlining some idea of geographical focus etc.
One burning issue for the new combined shareholders will surely be what they intend to do with Telfer, will there be arisk of a gap in ore from Havieron with the slight delay to ETA from the LCA issue as 2024 rumbles on and if they plant to retain both assets at all. However, I do think over the next few months NEM will be reviewing and firming up a pre-planned strategy to start executing. For instance they moved in months 6 to 9 meet post GoldCorp targets against an overall timeline of 18 months for completion.
Divestments or acquisitions take many months to negotiate and finalise so they would have opened up talks a few months after taking GoldCorp over with relevant parties on their planned deals to have met these timeframes you'd think? So, IMO if they try and achieve the targets in half the stated period again (about a year in this instance) then ideally they'd want to start negotiating on some of the planned deals from around 3 months after taking over and I do feel Havieron/Telfer is one they need to think about sooner rather than later...
CP - no need to imagine - just check the IR section of their website, slide 7 of their latest Oct Corp Prez for instance:
- Feb 2024 - Newmont to provide 2024 'guidance' for the combined company so they may not have decided and probably won't detail which assets are for divestment but they will give more detailed guidance on overall strategy as shareholders will be expecting some. Of course we don't know which assets and when the timelines might fall exactly.
Also, they have given a 2 year timeline and a target of $2bn for optimisation and $500m in synergies, they'd met their 18 month timeline and up to $1,5bn divestment targets stated post Goldcorp within half the timeframe. Likely given specificity of targets given again they have a very definitive idea already of assets high likely to divest, I'd expect them to be fairly rapid and look to meet quickly again.
I've done a more detailed post a while ago on their post Goldcorp activity.
@CP - it's been more than vocalised as also in the timelines in presentation slides etc. if you go and check from NEM website in the IR section. Therefor I think it's a fairly strong indicator of some level of clarification - tomorrows earnings call may give more clues (3pm-ish) but yes, not 100% certain but their shareholders will be looking to understand and gain more detail on their plans and the'll have had 3 months or so to confirm whatever they have already outlined and assessed.
@Culpepper I'll reply to you in this thread vs that negatively themed one and not many folk use the thread view on this forum I imagine.
Newmont will still be working with a lot of the existing staff they inherited so they'll be able to quickly tap into the existing understanding and there is an ongoing DFS being completed so plenty of information contained therein. I do think and have been in the camp that there isn't a current deal being discussed as NEM will take over and then confirm any draft plans before opening talks with potential suitors for any assets marked for divestment.
Also a good case being made by a few that why not buy GGP out and then divest without any complications but of course not easy perhaps with Wyloo in play and the hassle of a takeover attempt. But saying that I do think NEM would like to release a clear outline for their update planned for Feb so they may well use that as a target date. They've got that $2bn target from having a draft list in mind vs needing to start from scratch and of course if divesting any of their own assets, they already have everything to hand for full consideration.
That's a simple exercise I reckon CP, if a longer term viewpoint is considered against the near term gola of meeting thatn >$2bn USD target then...
Within a decade it's production profile with organic growth should meet their Tier 1 description
Gold mine with a high copper exposure aligns with their plans too, in fact most Gold majors seem to want increased copper exposure given the future demand
Safer Jurisdiction is always a plus
A lower industry AISC which is hopefully confirmed in DFS
The mine itself will be modern and focused on ESG requirements from the outset than an older mine needing updated
Just a few there :-)
QF - So they mothball Havieron and Telfer and start running up costs in doing so when they could either divest both as a package deal for X hundred million or finish developing Havieron with telfer in situ ready to process the orea and once you add additional bulk or selective mining would fit their categorisation as a Tier 1 operation.
Whilst it is a preference to run tier 1 operations amongst majors I assume, a profitable Tier 2 mine with organic growth towards a Tier 1 with plenty of copper in the mix and a multi decade LOM would perhaps suit Newmont too, certainly an alternative viable theory. If not, GGP seem keen to acquire with Wyloo looking to be very supportive too and no doubt more than happy to assist in partnering up for sole ownership given their enthusiasm for Havieron to date.
You'll see some churn of administrative and more executive staff perhaps as part of the synergies of merging staff in geo's where they already operate, but I'm sure NCM were running a tight ship operationally at Telfer given the slimmest of margins to work with.
You don't just buy a company's assets, you're also buying the skills of their workforce and in some respects they'll want to retain certain key staff because of their understanding and expertise at Telfer and block cave mining expertise is something they've identified as a real boon for them in buying NCM too.
As for Hav being bought off us, I'm sure some of those who attended the last TH said Shaun would probably consider a 90% divi if this played out but be looking for another suitable role and I suspect the same for the BOD, they are looking at building a mining company not go exploring.