RE: Silver13 Apr 2022 17:23
Q: No not at all, I guess from your perspective it's and please do stop me if I’m not right here is actually if and obviously it's a massive if, if the company chose to go down the route of a venture with somebody else further along the line you would actually have more information, more data and more stuff to present to them to say THIS is what we have?
- 100%, look I’ve been involved in some decent-sized M&A in the mining sector and here’s a couple of things that don't happen, I wish they did, trust me I wish I really wish they did but big companies don't come along and write junior companies massive cheques for unproven ideas - it doesn't happen, if you're running a 40 billion gold company you have board processes etc that mean you have to base your valuation on something.
- I think we're seeing a good example of this at the minute but I’ll stick with my story, you have to create some value there you know, you can do a joint venture and let them take some exploration risk but I can't think of some circumstances under which we would do that before we've drilled a decent amount of holes and made a discovery, why would I? So the point is , so yes to burst a few bubbles you know big companies do not come along and write billion dollar cheques for companies that have some interesting ground and some ideas, you've got to put some meat on the bone.
- I'll give you a great example, when we said Kalahari and I was a director of extract at the top, we did a hundred million dollars’ worth of drilling to drill that project out, we already had Rio Tinto as a major shareholder and a Toshi group etc, but funnily enough you have to allow people to be able to - if you want to sell you have to allow them to be able to buy you - so you have to create some value, you can't just expect them to come and write a blank billion dollar cheque for some ground, it doesn't work that way.
- So our plan is really really simple , make a discovery, keep drilling, drill it drill it drill it, make it bigger, make it bigger, make it bigger and then you can sit down and have a grown-up discussion in real corporate land where people say well I can pay X for a reserve ounce, Y for a resource ounce, because I’ve got a good reserve and resource, I can pay Z for your exploration.
- You can sit down there, you can come up with your model and I’m sure we know of a company that's probably doing something like this right now over a certain five percent stake and you know that's how you create value and so you know, I'm a huge fan of the team for Greatland because that's exactly what they're doing, and so that's our plan and that's what we're going to execute.
Perhaps that gives you a bit of insight into the work required to attract a JV but also why there are advantages to working up a prospect to a level where Bill can get a deal that is best for shareholders in the long run as either a production partner or a bigger payoff in the event of a sale outcome :-)
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