The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
If my maths is wrong- show me where... onename. lol.
The recent drilling is encouraging for growing the deposit to circa 9 million ounces. There might be twenty million ounces there eventually... but I doubt any company intending to go to production has any intention of drilling it off anytime soon. Newcrest would of rather bought out GGP on the cheap- so there is little motivation to show how large it might get in the future.
Also the market also doesn't seem to care much about the drilling. The market knows it is large and getting larger- but at the moment the economics will be determined by the grade and the existing telfir mine.
I don't think GGP is really an exploration stock at the moment. ...But I agree that if there is a decent sniff that they will prove up twenty million ounces then we will be off to the races.
We might turn into an exploration stock if Newcrest back out- then there will be a load of drilling and dilution to keep the market interested- if that is what you want.
Interesting thought there lebuge. I am sure my maths is wrong and they will be intending to flow more like 700,000 ounces in the first years?
I am not good at grams, ounces, tonnes etc though- so I could be wrong!
Good to know. But isn't that still only 150,000 ounces of TOTAL production?
Let me phrase it another way. What do you think the NPV of Greatland will be at the start of production- assuming they have 30% of Haveron and what share price do you believe would be fair value for Greatland as a result? This IMO is no longer an exploration story... barring another massive find of course... but with the decline advancing fast- it is about how much it is going to cost to get into production- and what the production profile looks like.
I am a buyer of GGP- but a cautious one.
Ok so the mine will be tier one. That usually starts at around 400,000 ounces of production. How many ounces do you think will attributable to Greatland per year in the first few years? 10,000 tons at 2 grams isn't very much by my calculations. Obviously the deposit getting bigger is a benefit- but not really to the share price, since anything beyond 15 years of production does very little for NPV. Long term Greatland, if they are not bought out (why wouldn't they be??) could expand finding more deposits etc.
However I am concerning myself with the share price over the next two to three years.
I was hoping for more than 'Its a big deposit, Greatland shoud benefit'.
I own plenty of precious metal stocks, don't worry about me missing out.
Likely extraction rate 450,000 ounces per year- 150,000 ounces to Greatland.
Yes, circa 10 million ounces means 3 million ounces for greatland
Six months ago Greatland was going to be a mine. So certain was this fact that investors were willing to ignore the rich share price and jump on board with the expectation that the deposit and build would ensure it would grow into and exceed its share price.
Currently Greatland is shaping up to be a 150,000 ounce producer with a twenty year mine life- worth perhaps 1.5 billion US once built- so a potential three bagger- plus any exploration wins.
Now.... there is no certainty Greatland will be piggy backing. Instead there is a large possibility they will need to raise money at the lower share price- potentially eviscerating much of the potential gains of those that already bought in early on.
Add in uncertainty about what happens to Telfer and how it stacks up without Tefler- and potentially this is looking like a long and painful slog to profit if Newcrest gets bought out.
Understandably the share price is under pressure.
Discuss, anyone?
280p seems very possible before first pour to me. Some mine life extension would help things along.
Board comments are rarely useful for anything other than gauging sentiment. Clearly I am better off keeping my opinions for the investment club where the adults are. In my opinion, Judging from the characters live on this board there is insufficient new blood to be audible over the screams... so unfortunately that means the share price is still probably heading one way.... A drip feed for me. Perhaps the adults that make money are in room 101? I'll go see, nothing useful here.
Trippytaka that comment says more about your investment prowess than anything else you could have written.
You can justify closing a thread promoting a newsletter writers YouTube promotion because it was hijacked? I am not one to hang around forums without being invested. I owned Greatland shares on the way up and unusually timed a decent exit. People I know with careers in banking and the mining sector started buying in the 20's- so something has gone a bit pear shaped here. I was performing some sort of autopsy on the share price when I saw the irritating puff promotion piece and snapped. I think it's clear that Greatland is a very uniquely de-risked mining investment with a lot of potential upside and I will certainly be buying. Exactly how much and with what sort of tranches waiting to be deployed I am not sure yet. I may have scored well in Greatland but I took plenty of beatings over the last two years too. The junior market has been abysmal and a lot of money is going to need to flow in to the sector to rectify that. However, I suspect Greatland can do well regardless of the sector and that is what makes it particularly attractive to me.
Accurate at the time it was made that is...
I suspect a distracted Newcrest decided not to attach a price tag to Greatland with the hope that they could pick it up cheaper later on (probably correctly) and that the valuation is about right. I am in the process of assessing Greatland though...
A particularly British hero who combines professionalism with a gentlemanly air?
Which one?