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Spot on Summit. Inflation in UK is not caused by a booming economy, the UK is probably already in recession. With a very weak economy. Supply shocks trade friction as the major cause, brexit, china shut downs, war in Ukraine/sanctions.
Central banks can not address the supply issues that are inflating energy which leaches into goods and service price increases.
BoE is expected to raise rates 0.5% in July. It’s widely accepted that interest rate rises take many months to have an effect. Therefore the rate rises today will take effect in a future weak, recessionary economic environment. Stagflation.
Central banks will have to course correct to stabilise economy.
This should be the moment that Golds bull run begins.
I think gold is holding up relatively well because the market can see this scenario coming.
But for GGP and developers the biggest challenge today is two fold:
1. Inflation will significantly increasing the cost of development. Which will likely result in more capital requirements.
2. The tightening financial environment making access to capital more difficult. This is going to be a big problem for junior explorers particularly.
GGP and NCM should update capital expenditure requirements and Shaun must as a matter of urgency secure the funding and that figure should be sufficient to account for projections of compound inflation on costs.
GLA
Gold is dropping and pound is being battered. A double whammy for net asset value of GGP traded in £.
Discounted future cash flow worsens as interest rate rises on capital.
Time to buckle up and brace for serious volatility.
Investors need the mental fortitude to deal with sub 10p share price.
Still confident in the long run things will be good.
Need to conclude 5% and confirm full capital raise without further share dilution quickly.
SD is a very competent MD. GGP are in good hands in my view.
Issue was probably the wrong word but I was referring to the divergence in valuing the asset from NCM and GGP.
Shaun has stated many times it is his and the team around him job to get maximum value for GGP.
Let’s see what value the arbitrator sets. If it’s low could be great opportunity to buy stock at a discount if it’s significant >$100Million the sp should react positively.
the catalyst for share price action are clear until they’re resolved the share price upside is paralysed.
Let’s hope GGP and NCM can address the issues which are undoubtedly holding the company back.
short term hurdle is the value attributed to the 5%. If the arbitration value is much less than $100Million that could be a short term bump.
GLA
How do you get p/e 6.5? Have you converted the $ to £s
£0.88/ (237,000,000/ 4,100,000,000) Best case assumes no further share dilution.
Do I think good things are coming for GGP? YES YES YES
Shaun has said his ambition is to make GGP multi billion company and I believe he will succeed.
Everybody here has to recognise that it will take significant time. Exploration and mining is not a short term play and fraught with risk.
Some peoples lack of understanding how long this could take is demonstrated when the sp falls and frustrations are vented on this and other discussion groups.
All will come good. GLA
Love it Tymers
88p, How do you get that valuation? And what is your time scale to reach that goal?
The Market cap at 88p is ~$4.6 Billion. That will require several discoveries and multiple income streams from mining activity.
For some perspective that market cap would put GGP in the same league as Pan American Silver $4.7 Billion
With Annual Revenue $1.7 Billion Earnings $300Million.
Please do not interpret me as negative, sometimes a dose of realism is required though.
I like the RNS today shifting focus onto exploration.
If you recall the share run up to 35p was driven by excitement and bullish sentiment around Scallywag drill
results and assumption there would be a discovery.
The disappointment at the drill results was the catalyst for sp decline.
GGP market cap at peak was a lofty >$1.5 Billion now retracted to ~$650Million.
Havieron is baked in to that valuation IMHO for the time being. As the resource grows over time this will clearly grow. However the ultimate size 20-30Moz needs to be drilled which will take time and money.
Patience is needed to realise the value to GGPs 25-30% of the Havieron asset.
I don’t have the time to wait but those who can will in my view be rewarded.
For now though I think it is a good idea to shift focus to exploration. GGP have staked some prospective tenements in elephant county.
The Geos and exploration team should communicate their exploration strategy from the data they have to date.
Ensuring they convey what their hypothesis is and what question they are trying to answer through the drill bit.
Excitement around exploration, resolution of 5%, improving decline progress and full funding for capital commitment are significant short term catalysts which will surely stop the rot.
GLA. Patience is a virtue
Every time I check in the sp has fallen further. Its down 3-5% every day. 9p seems inevitable. If that is breached could be looking at 7.
I didn’t think we’d ever see 10p therefore anything is possible with negative momentum in the stock.
For the record, if I had the cash I’d be buying but in blocks on downward trend. Not advice.
Certainly not a good look for Sprott ETF to be downsizing so significantly.
I’ve said it before, this has the smell of a capital raise coming. The institutions always get a heads up first, they sell out and buy back at a lower price.
PIs are the last to know. It sucks but that’s what happens.
Let’s hope I am wrong, but PIs need to be prepared for that eventuality.
The lack of regulation on AIM makes it one of the worst exchanges in the world. Really is the Wild West and PIs are cannon fodder.
GGP would be better served listing on TSX or ASX.
If the market drops everything in it drops. There is nothing SD or any other CEO/MD can do about it.
All investors have to appreciate that companies that do not generating profits get hit hard. GGP is in this camp. We know the future looks good for free cash flow, until we get there and the 5% hangs over the company downward pressure will be applied on the sp. Yes it can go down further from here. These become bargains that long term holders can take advantage of.
Hi Liam. I really enjoyed the interview and appreciate your efforts.
Keep up the great work. Ignore the arm chair critics and any negativity. You used your initiative, give up your time and energy to do something which ultimately helps all PIs. How great is that!
Although I’m not invested now, life threw a curve ball which meant I had to take my money out long before I was ever intending. Frustratingly I will not realise the rewards I feel confident will come with GGP in the long term.
Now I enjoy watching the story evolve and the company grow. Keep up the good work and thank you again.
I’m curious what methods people are using to value GGP?
$ free cash flow per ounce
Discount future cash flow etc
I agree Havieron will be acquired at some point.
What investors need to do their own assessment of fair market value for the asset.
Discounted future cash flow seems to be the method used.
Telfer has processing capacity of 22Mtpa with head grade of 0.89g/t at recovery 78%. The PFS for Havieron stated grade 3.72g/t 88% recovery rate and anticipated 2Mtpa.
This is a key factor for life of mine valuation before the ore body has been fully explored. The amount of ore Mtpa is only limited by the decline.
Anyone can run the numbers for your own base case assumptions size of ore body, amount of ore processed per year (Mtpa) head grade g/t, recovery rate x (PoG - AISC) - Debt and put that into a discounted future cash flow model.
We know the PFS understates mineral gold and copper reserves. As these grow with every drill intercept so does the life of mine and therefore the future cash flow.
GLA.
It’s important that investors have a method to value the company. Having a target for valuation of a company is critical to success This is based on a number of informed assumptions which if proven correct keep you invested or give you reason to exit if they were detrimentally wrong.
If you don’t have the knowledge or time to research and monitor company then I would put my money into a managed fund/etf who have the relevant expertise in the sector of interest. Not advice.
GLA
What do your exit strategy?
How are you valuing Havieron discounted future cash flow?
Price to Net Asset Value (P/NAV)
Price to Cash Flow (P/CF)
Total Acquisition Cost (TAC)
EV/Resource ($/ounce)
As you say exploration is high risk all the other GGP tenements are purely speculative so the value of GHP today is all in Havieron.
I always thought that the most likely outcome would be acquisition by NCM. That’s what I was waiting for when I was invested.
Good luck all
Nothing about Havieron in the presentation. For such a significant project which extends the life of a key asset for Newcrest. I find that very odd?!?
I never would have believed that GGP would be back in the 10s.
There is something strange going on, it’s a harsh reality that the institutions have the upper hand in the market.
The stock needs some good news outside havieron.
https://www.newcrest.com/sites/default/files/2022-05/2022_BAML%20-%20Global%20Metals%2C%20Mining%20%26%20Steel%20Conference%20-%20Presentation.pdf
Crypto almost certainly took some of the investment money which would have gone into Gold.
I wonder if the bursting crypto bubble is a realisation moment to the risk and extreme volatility in the asset. This may divert money into safe harbour assets like Gold.
I have bought some physical gold recently which can be handed down to my loved ones. I do like digital currency but now think it is a long way from being a serious alternative to fiat currency.
Although gold could come under pressure as bonds interest rates rise. It wouldn’t take much new investment money to head into gold to have a significant impact on price to the upside.
GLA
Hi B4zh like most here I am emotionally invested if it hadn’t been for a change in health I would still be financially invested.
I really like GGP and followed them for several years.
I think people need to be strong and prepared themselves for short term pressure, which really shouldn’t matter if you are taking a long term view.
A capital raise and further share dilution is the event that would upset me most in short term.
The sooner these questions uncertainties can be put to bed the better.
Genuinely wish all GGP holders well. Your day will come.
Hi Costa
What I am saying is if my circumstances were different and I was still in. I’d be holding but anticipating short term pressure on sp especially around key inflection points.
I would be accumulating in small blocks on dips.
Short term potential for sp decline but 3-5 year view still bullish. As I believe hold will outperform and GGP will shine over that time period.
Does that make sense?