Member Info for Dip666

I know it's crazy TT :-)

Funding a project for a company like GGP transitioning from explorer/developer to producer is usually secured after the project has had the usual feasibility studies and MRE's finalised so potential lenders can assess economic feasibility of the project to make a decision on top of aiding NCM/GGP in assessing whether to take it beyond planning into development.

But ...the decline is a production ready decline, not one that will be utilised for further assessment alone and that was always a strong indication of the DTM being very likely from the outset.
Shaun has stated Tier 1 banks were happy to agree term sheets based off the 2mtpa PFS and perhaps Shaun may partially or even fully fund our share of costs before the DFS and certainly the potential cross listing on ASZ should not be forgotten as an option to aid funding.
If utilising a DFS that increases production profiles by 50% to 3mtpa can lead to a loan with better repayment terms then surely it makes sense to wait a few months despite increasing interest rates - Shaun has the background, experience and contacts to best make a decision on this.
I imagine we'll get an interview next month to discuss options as summer hols come to an end - reminder on his last statement in regards to funding :-

Excerpt from LS3 Webinar - 21 July:

* Okay so Chris’s next question also it just flows on how far off are we to announcing bank financing for our share of 70 million you know for the capex and you will need that there
- yeah good question Chris well look yeah we continue to engage with banks
- I think typically people would understand that you don't bank pre-feasibility studies, you bank the bankable feasibility study
- the feasibility study itself, I think in our case that might be particularly the case because remember our PFS isn't an approximation of the final feasibility study, we've actually taken a 2 million ton PFS and we've recommended a 3 million ton study into the feasibility
- so you are going to see that 50% bigger which obviously does have some impact on the cash flows and the production profile you're forecasting
- offsetting that this is a pretty special opportunity, you know here we are with a world-class ore body, tier one jurisdiction next to existing infrastructure with a global major as our partner
- now that perhaps gives us the opportunity to outperform that but I would always recommend and if someone asked me when you can fund a project I’d talk about it at the time after release of the feasibility study but equally we have a lot of interest now and we continue to pursue and understand it and seek to optimise their outcome for our shareholders.

25mins onwards for GGP

Finally some attempt at a revaluations from them:
https://mcusercontent.com/d9ebd7c1aa0f3dbc5fab42eca/files/42f2b2f3-ca50-b1dc-1a5d-7091e0971566/AlienMetals_24_8_2022_FINAL_BG.01.pdf

Ahead of this, TPI’s valuation (before factoring in today’s agreement to lift its Hamersley participation from 51% to 90%), still nevertheless indicates c.200% upside potential, which may be reflected in Alien’s share price as it responds to anticipated news flow in the coming weeks and months.

$85m offer was before price determination I think....so perhaps SD's game theory at play :-)

GGP offer $85m for a 5% stake and get NCM wondering where you're coming in for the independent valuation exercise, along with the GGP MRE, make them think about pushing up a bit perhaps?

GGP still takes a conservative stance though taking into consideration the ruleset around the option exercise and we won out and even more luckily. seems like pushed it out of a value NCM would purchase at.

Amusingly I'd predicted (in a small TG group where a handful of us made a sportsman's bet) that I expected NCM to win via the valuation process at $55m having been forced upwards by GGP with their independent MRE and GGP had probably come in at $65-85m dependent on whatever stance GGP was taking along how conservative the ruleset was, so if GGP won we'd be looking at that range as the price tag but I 'bet' NCM would win at $55m.

So I underestimated by $5m for the amount, and it was GGP who won but below my lowest value for their range by $5m - I won the competition but as one guy said - you won nothing and I definitely felt that at the time lol

But I disagree now... retaining 30% is a huge win in my book as NCM have declined to purchase the 5% and the NCM loan payments start after production commences so great if we can pay it off before but not the end of the world if we can't.

Shaun has always stated confidence in hopefully retaining 30%, disagreed with the 5% option ever being agreed by previous management and stated confidence in getting us funded. As my earlier post around his response to using the DFS's increase in production profile shows, I think the funding will soon be be announced post DFS which I expect either for NCM September quarterlies in October or their AGM in November as they seem to like announcing things around pre-set events.

And surely the GGP team are having a well earned break right now and no doubt we'll have a webinar once Shaun is back working as he must be needing to speak to banks again now the funding requirements have been determined around expectations in DFS etc.

Shaun and team have played a blinder around the GGP MRE and winning the price determination and managing to retain 30% - the majority here seemed to want to retain it 9 months ago?!

So, I am befuddled at why the panic when Shaun has a very viable project to discuss with banks that have already been shortlisted from term sheets using the PFS. It makes sense to negotiate with a DFS that offers a 50% increase in production profile :-)

Oops - try again!

My personal expectations since the last webinar when Shaun was questioned about funding now that the price determination had been completed is that he would wait for NCM's decision on whether or not to purchase of course and then utilise the FS to finalise funding based on the increase in production rates probably assisting in negotiating the amount and timeframe around funding.

Excerpt from LS3 Webinar - 21 July:

* Okay so Chris’s next question also it just flows on how far off are we to announcing bank financing for our share of 70 million you know for the capex and you will need that there
- yeah good question Chris well look yeah we continue to engage with banks
- I think typically people would understand that you don't bank pre-feasibility studies, you bank the bankable feasibility study
- the feasibility study itself, I think in our case that might be particularly the case because remember our PFS isn't an approximation of the final feasibility study, we've actually taken a 2 million ton PFS and we've recommended a 3 million ton study into the feasibility
- so you are going to see that 50% bigger which obviously does have some impact on the cash flows and the production profile you're forecasting
- offsetting that this is a pretty special opportunity, you know here we are with a world-class ore body, tier one jurisdiction next to existing infrastructure with a global major as our partner
- now that perhaps gives us the opportunity to outperform that but I would always recommend and if someone asked me when you can fund a project I’d talk about it at the time after release of the feasibility study but equally we have a lot of interest now and we continue to pursue and understand it and seek to optimise their outcome for our shareholders

https://www.ggpchat.co.uk/viewforum.php?f=54

My personal expectations since the last webinar when Shaun was questioned about funding now that the price determination had been completed is that he would wait for NCM's decision on whether or not to purchase of course and then utilise the FS to finalise funding based on the increase in production rates probably assisting in negotiating the amount and timeframe around funding.

Excerpt from LS3 Webinar - 21 July:

* Okay so Chris’s next question also it just flows on how far off are we to announcing bank financing for our share of 70 million you know for the capex and you will need that there
- yeah good question Chris well look yeah we continue to engage with banks
- I think typically people would understand that you don't bank pre-feasibility studies, you bank the bankable feasibility study
- the feasibility study itself, I think in our case that might be particularly the case because remember our PFS isn't an approximation of the final feasibility study, we've actually taken a 2 million ton PFS and we've recommended a 3 million ton study into the feasibility
- so you are going to see that 50% bigger which obviously does have some impact on the cash flows and the production profile you're forecasting
- offsetting that this is a pretty special opportunity, you know here we are with a world-class ore body, tier one jurisdiction next to existing infrastructure with a global major as our partner
- now that perhaps gives us the opportunity to outperform that but I would always recommend and if someone asked me when you can fund a project I’d talk about it at the time after release of the feasibility study but equally we have a lot of interest now and we continue to pursue and understand it and seek to optimise their outcome for our shareholders
- yeah good question Chris well look yeah we continue to engage with banks
- I think typically people would understand that you don't bank pre-feasibility studies, you bank the bankable feasibility study
- the feasibility study itself, I think in our case that might be particularly the case because remember our PFS isn't an approximation of the final feasibility study, we've actually taken a 2 million ton PFS and we've recommended a 3 million ton study into the feasibility
- so you are going to see that 50% bigger which obviously does have some impact on the cash flows and the production profile you're forecasting
- offsetting that this is a pretty special opportunity, you know here we are with a world-class ore body, tier one jurisdiction next to existing infrastructure with a global major as our partner
- now that perhaps gives us the opportunity to outperform that but I would always recommend and if someone asked me when you can fund a project I’d talk about it at the time after release of the feasibility study but equally we have a lot of interest now and we continue to pursue and understand it and seek to optimise their outcome for our shareholders

https://www.ggpchat.co.uk/viewforu

@Chester - I think it should be Sept 8th as 7 weeks at this time of year and it was 9th last year for interims from NCM.

@ace - there is no need to join the forum, it can be viewed without an ID and @tony link below is Zoro's latest update on key dates/events:

https://www.ggpchat.co.uk/viewtopic.php?t=430

The decline pace is increasing as the ground improves and somehow you think that this will slow production commencement?
I think it likely that production will be pushed to Q4 2023 in the FS and perhaps even achieve Q3 if ground conditions improve more and they will anyway as they get lower in actual vertical depth, the decline redesign seems to have really helped to date.
And Shaun can always retain the existing NCM loan which can be paid back during production if unable to fund enough to cover development costs and the NCM loan but were I a bank happy to lend to GGP, perhaps it might lend enough to pay off the preferential lender as well and become the sole lender if you like the project economics for your lending portfolio.
As mining investments go, potential client becoming potentially the second lowest cost gold company globally, partnered with a major in Australia, existing infrastructure to utilise for processing ore etc. surely make it very appealing VS many other mining projects.

The 'plan' was to repay NCM was it Mumbo..... only if you authored and/or agreed to that option exercise - which Shaun didn't.
Shaun was very clear that he inherited the option exercise from Gervaise and co, that he didn't like it as due to the prescriptive nature meaning NCM had the advantage to obtain 5% cheaper than actual FMV due to conservative price decks etc.
He has been very consistent in wanting to retain 30% into production and attempt to fund and wasn't happy we'd lose the 5% as thought likely NCM would buy so the silver lining was at least we pay some/all of the loan off was his consistent narrative.
Shaun's always seemed confident about wanting to retain 30% and funding into production, we'll find out if his confidence is well-founded in the near future but the team has the experience and skills to get this done IMO - have a good weekend all.

Notes from Proactive Interview regarding NCM not taking up 5 percent - 19 Aug 2022

https://www.ggpchat.co.uk/viewtopic.php?t=470

I think NCM's BOD will need a lot more official proof of prospectivity on top of a DFS to be able to get a bid past their own internal red tape given how this 5% played out such as a much larger resource estimate once they can drill from underground - I now think the risk of a bid/takeover is lower personally.
Main risk is if Shaun can't fund us into to development but he wanted to retain 30% so I presume he fancies his chances :-)

Well Freddie - it's a good job I don't:

- focus on SP predictions
- my conclusion after studying process, valmin code, valutaion methods was it's too hard to predict unless an industry expert and binary nature adds a real wild joker element
- take up on NCM has surprised me but their 'excuse' of hurdle rate of return is actually viable given the nature and size of their company and my own experience in PMing in corporate environments and I am happy to retain 30% as outlined in other posts
- Couldn't care less about Gervaise, was never a fan boy, I won't care less if Shaun leaves in 5 years time to become a CEO in a larger company as long as he delivers while here. Staff and managers move on, I'm not a 'fan' of GGP, as if they are my footie team of choice - I'm an investor.

This link should work so the article can be read :-)

https://12ft.io/proxy?q=https%3A%2F%2Fwww.afr.com%2Fcompanies%2Fmining%2Fcagey-newcrest-baulks-at-havieron-gold-price-tag-20220819-p5bb5b

Zoros - the forum has become a great encyclopaedia for GGP related research and a fantastic tool to share it, look at the information on there from Bamps in regards to tenements as an example.
I don't do 'activity' and like to read something that adds to my knowledge on shre chat boards, totally fine if others use them for socialising and general passing of time but never been my main purpose for share chat boards, perhaps when older and retired but even then I suspect I'll be a busy bee :-)

@Antigua - I still post here infrequently as else not everyone will access my notes from interviews etc. as a small minority prefer to just read this board, but otherwise I have been very infrequent here since the forum was set up.

The truth is the truth - this board has lost most of it's prolific and more informed posters over the course of this year.

I'd prefer to retain 30% and run the funding gauntlet rather than give away 5% at what could have been a price far below $50m and my thinking seems to be in alignment with Shaun's on that regard - I'm happy with how things have played out personally.

I'm not responsible for your investing decisions Freddie - you are - you took the risk of investing when you did, now own your risk and perhaps you can post something one day that helps others understand the company etc. You prefer to criticise other peoples efforts than provide any useful insight yourself, criticising everyone else's efforts is easy.

IMO a far worse scenario would have been NCM winning the price determination and the 5% being priced far less and absolutely trashing the SP and then even if NCM took up the 5% we'd still probably have the NCM loan not fully paid off, an even lower 5% outcome and probably a far lower SP than we did after the $60m to try and work back up from.

As I said, I'm happy how thing have played out despite this awful option exercise Gervaise agreed to and provided plenty of well thought out rationale on how I got to that conclusion and have put in plenty of work I've happily shared around understanding the process, Valmin code, valuation methods and information to help understand the GGP MRE around Simple Kriging etc. as I tried to increase my own knowledge.

@Antigua - I apologise if I came across condescending or arrogant, was not my intent :-)

@antigua - I think Shaun and the rest of our team are not that stupid that they did zero planning or discussions with banks around NCM not taking up the 5%. Anyone with half a brain would have discussed various scenario's for consideration in relation to term sheets such as:

a/ Loan only partly paid off and 25% retained for development funding
b/ Loan fully paid off an 25% and 25% retained for development funding
c/30% retained for development funding

I have to say I am definitely not missing posting and reading here regularly any more, most of the analysis and research focus has gone for good.

Notes from NCM Full Year Results for 2022 - 19 Aug 2022
https://www.ggpchat.co.uk/viewtopic.php?t=467

My viewpoint very much that I was always annoyed NCM would potentially get the 5% cheap with this option exercise and the ridiculous rules within it despite the funding assistance and am 100% confident that Shaun can work around the decision, the SP matters when I decide to slice/exit etc. and that isn't pre production and Shaun himself stated he'd never have inserted or agreed to this option exercise into the JV.
Surely a far worst scenario would have been NCM winning the price determination and the 5% being priced far less and absolutely trashing the SP and then even if NCM took up the 5% we'd still probably have the NCM loan not fully paid off, an even lower 5% outcome than Shaun was able to achieve and probably a far lower SP than we did after the $60m was declared to try and work back up from.
Definitely very feasible that GGP pushing up the valuation to this level meant that the financial protocols set within the company meant that the hurdle rate of return for the project tolerances was exceeded making it very difficult for the BOD to get the transaction authorised, on top of which they were having to justify a valuation higher than they themselves put forward for the option exercise.
As for NCM deciding not to sell us 5% for $85m.....probably because they know that longer term 5% returns more than $85m, I would focus again on the fact that it is the hurdle rate of return being exceeded outside project tolerances that was stated as the main reason for not proceeding.