The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Thanks for sharing Paddygall. Top of the ore body in May sounds good, Shaun did say how much faster the decline was going now. Fan drilling is going to be a big plus, especially saving the drill time from surface. Hopefully they also try to find just how deep Havieron goes.
Let's see what Newcrest and GGP have to say. Exciting times.
Not sure where you got cash strapped from Taverham. Their latest half year financial results (17th Feb) talks about their strong balance sheet.
“Significant liquidity at 31 December 2021 with $3.2 billion in cash and committed undrawn bank facilities”.
I don’t know about the idea of a takeover attempt but wouldn’t describe NCM as cash strapped.
If you want to assume the 5% price for your valuation then that is up to you. You just have to ignore the opinions of Shaun and Sprott who both say the it did not meet FMV. That’s up to you. Shaun and Sprott are more credible though.
From the Sprott note
Minority 5%: the JV process has concluded with an independent ruling putting the 5% residual share of Havieron at US$60m. Greatland notes this represents a 5.3x / US$1bn increase in the value against the 4Q21 PFS published by Newcrest, with the price determination done just 64 days after Newcrest published their study. Newcrest now has 30 business days to exercise this option. The process to decide the value was based on an independent taking a binary choice, rather than reflecting the actual value, with inputs such as commodity price impacting the ability to advocate for a higher option price, and excluding results since 4Q21. A final DFS for the Crescent Zone sub-level open stoping (SLOS) mine currently under construction (decline only) remains on schedule for 4Q22.
Buy-out: being near precisely in line with our forecast US$57m, an average of our NPV for 3Mtpa and the market cap, today’s pricing is a great result. The implied asset valuation – and being very specific here – of the existing reserve (ie, ‘only’ existing reserves) comes in at US$1.2bn, implying US$300m / £250m, lifting to £300m with cash against ~£450m market cap of Greatland. Why we see this as a great result is that this valuation is on the existing 2.0Moz @ 3.7g/t (at spot) 4Q21 reserves. Why this is so impressive is that our own +6Moz of high-grade from infill and depth extensions to 200m past today’s (pre-reported) deepest hole, and another +6Moz AuEq of ~ 1g/t caveable material, are conceptually valued at just £150m or just US$20/t. Of course Greatland / Newcrest would need to define these resources then reserves, over time, which is far from given, but the value upside if done is clear in our view. That said, the existing 1Q22 reserves of 2.9Moz @ 3.0g/t AuEq would theoretically already underpin the entire market cap.
Didn’t Shaun just recently say 20Moz?
Ask Shaun today at the Q&A. He’s talked about wanting debt finance, not equity. Also will be interested to know how much of the loan facility from NC was actually drawn upon so we can know the balance of the 5% sale (assuming NC take it).
Shaun has stated repeatedly that he has term sheets from the banks for funding.
Hopefully Shaun will confirm how much is being paid back to NC this afternoon. I don’t believe that all the facility has been drawn down so there could be a substantial amount left.