RE: Toll agreement21 Mar 2019 06:44
Not quite what I meant. I reckon that's the starting level of an offer *we couldn't refuse*. And very much IMHO obviously. Maybe bring that down to £2 if you like, given jurisdiction risks.
I don't actually think anyone will offers us that price at the moment - it's too big a jump from where we are now. Any publicly-owned company would have to explain to their shareholders why they're paying >8 times a company's current MCap. That would be a hard sell, even if it's still a good deal for them in the end.
Nor do I think that price will be reached in the short term, but my real point is that (full) production (if we can make it all the way) will be so profitable that selling up for much less than (say) £2 a share now would be missing out on the full potential of the project. Many here would go for a sale at (say) £1 a share or even less, but I'm not sure MC, JM and RB would - they know what's possible here.
In under 3 years, all being well, we'll be producing 120k oz a year. Very easy to justify a £2.50 valuation then, based on pretty conservative numbers (assuming dilution is kept under control - very important that, for a per-share valuation). I think there's the scope to scale that up to 200k oz a year in time. I also figure 5m oz total is very likely and more is very possible.
In all honesty, I'd like a quick return here too, wouldn't we all, but I've grown used to the idea that this is a slow burner, and I'm personally decided to wait it out, however long it takes, because the potential rewards in the end are too good to miss.
In the mean time, I don't blame anyone for taking a shorter term view. Buying and holding hasn't exactly been a rewarding strategy with this stock, but hopefully that will change one day. GLA, whatever your strategy.
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