Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
The herd of traders has descended on GCM which delights the MM’s who make good money from the volatility they create. Just use opportunities like this mornings early 12% drop to accumulate if you are interested in the rerate that is occurring here. Look at the big picture a project that can produce $80 Billion + with a current Market Cap of £16 million.
GCM is now Up 4% and rising.
A very good day for long term shareholders. I have expressed the opinion many times over the years that GCM will only submit the proposal when they know that it will be approved. A lot of work will have gone on behind the scenes and the Government will have indicated that proposal will be acceptable. Power China are involved in a number of other projects and effectively have the power and influence of the Chinese Government behind them. The formal green light is not far away imho not least because Hasina needs to be seen to be taking rapid action to address the energy crisis which is causing massive economic problems.
Good news from GMET this morning:
“ Golden Metal Strategic Raise of £750,000 to Support Accelerated Exploration in Nevada USA
Single Investor £750,000 Subscription at 15p per share
Golden Metal Resources plc (LON:GMET, OTCQB:GMTLF), a mineral exploration company focused on tungsten, lithium, gold, copper and silver within Nevada, USA, is pleased to announce it has raised £750,000 through a direct subscription with the Company.
Subscription Highlights:
- Golden Metal has completed a strategic raise of £750,000 through the issue of 5,000,000 new ordinary shares of 1.0p each ("Subscription Shares"), representing 5.5% of the enlarged issued share capital of the Company, in a subscription from Purebond Ltd. (the "Subscriber") at an issue price of 15p per share.
- The subscription price represents a premium of 5.3% to the closing market mid-price of the ordinary shares of the Company on 8 March 2024.
- The Subscriber will receive one warrant with every two Subscription Shares subscribed for (2,500,000 new warrants). The warrants have an exercise price of 25p per ordinary share and will expire two-years after the date of the Subscription Shares' admission to trading on AIM.
- The £750,000 raised will be applied to the Company's working capital and the acceleration of exploration and project development activities including, 1) next stage exploration at Garfield, 2) commencement of key permitting steps relating to the development of Pilot Mountain, and 3) diamond drilling of key exploration and resource infill targets at Pilot Mountain. Further details on all of the above items will be announced to the market in due course.
Oliver Friesen, CEO of Golden Metal, commented:
"I am very pleased to announce this strategic subscription, from a single investor, at a premium to the market price, providing the Company with £750,000.
"We intend to deploy this funding into what we consider to be high impact exploration and development initiatives that have the potential to build considerable value for the Company and shareholders”
Clearly the new investor likes what he sees to pay a 5% premium for the new shares. This is a very positive sign as GMET awaits news on the US Government grant which will allow the fast tracking of the Tungsten project.
We should also probably expect news this week from Shaun following his trip to Saudi Arabia.
I think the new investor must be pretty certain the Grant will arrive soon to get in at a premium knowing the sp will rise well above this level when the grant money boosts GMET’s NAV. A very positive start to the week and no doubt Ollie will soon be beating the drum on the interview circuit.
Nero is absolutely right to point out the the gold mining sector has been in the toilet for years including the largest and the smallest. It is only in the last couple of weeks as the gold price has moved to new altimeter highs that interest is returning to the gold mining sector. Just as an example the worlds largest gold miner Newmont NEW is down 55% over 2 years. Franco Nevada the world’s largest gold royalty company is down 25.5% and CNR is down 27.7%. The company that has done comparatively better is CNR’s next door neighbour (and most obvious purchaser) Calibre mining which is up 8%.
So CNR has not performed badly in relation to other gold companies and Calibre demonstrates its potential. This has been a very bad time to try to sell a gold miner however the sentiment in the gold mining space is starting to turn and it is likely to happen quickly as all gold companies are massively undervalued in relation to the gold price which looks set to test 2200 next week. Now is the time for Jim to seal a deal at a much higher price than the one envisaged at the start of the sale process when the highest valuation was £560 million based on gold at 2000.Being fair to Jim he has been a gold bull for some time and has predicted the current gold price and expects it to go higher.
OF says he wants to minimise dilution and I think anyone who invests in companies like GMET knows that dilution will happen from time to time. I have listened to the chat with Charles Archer and raising money from US investors. I feel sure he would prefer to do this after the US grant money is received as he could raise at a higher price if he still needed to depending upon how much money the US Government give to GMET. It’s a capital injection with no need to issue equity which would boost the nav of each share and hopefully that would be reflected in a higher share price.
I agree he should press POW and the other 2 large shareholders to exercise the warrants if he needs cash now as that is their purpose. My impression is that OF is expecting news about the US Grant at anytime and would use that to pull in some US investors at a higher sp. I hold POW and GMET. I bought GMET after getting into POW because I am very impressed with OF and think the Tungsten asset has great potential.
It may be the case that US investors have taken exposure to GMET by investing in POW influenced by Rick Rule’s investment in POW. It should be noted that OF is on record as wanting to minimise dilution as he is a shareholder. Further the recent POW raising of money from strategic shareholders was conducted at a small premium to the share price prior t o the raise.
There is an article in this weeks IC on which Investment Trusts are banking on set to benefit from am increase in IPO’s, which mentions AUGM:
“ Other trusts could also stand to benefit. Mick Gilligan, head of managed portfolio services at Killik & Co, pointed to Zopa, the online bank expected to IPO in the near future, and an 11.6 per cent position in Augmentum Fintech (AUGM).
This quarters figures at SHG should be very impressive in terms of profit. Gold has kept at a good level and is now reaching new highs every day. As we have been told that SHG does not hedge it will be selling it gold now at these high prices. The profit increase will be exponential to the increase in the gold price. The Patels are going to rue the day they tried to pull their stunt with a 13.5p offer which was far too low at the time and it is a total joke with the increase in value of gold we are now seeing.
SCLP is sitting at number 23 on the Leader board Up 9.52% but is showing it is only Up 6.67% now due to an uncrossing trade pushing it down. This should show a rise in the morning when it reverts to the true closing price. A good rise today and hopefully an RNS soon.
The person making the last trade of the day seems confident in the future of JLP a Buy of 1.95 million shares a 5.2536p. The rise in the gold price is fuelling interest in the commodities sector generally with copper attracting a lot of interest. The position seems to have changed from 3 months ago such that strong rises in the copper price are being predicted for this year rather than having to wait until 2025.
I believe the warrant holders are POW and 2 other large existing shareholders so the warrant exercise should take place providing funds and those shares are not likely to be sold, nor will they sell existing shares to fund the exercise of the warrants. This will give some leeway to get through to the funding decision. Oliver makes it clear he is very keen as a shareholder himself to minimise dilution.
As Gold reaches an All Time High let’s just revisit the value of Condors Gold as set out in this summary of the BFS in September 2022 and is the basis for the current sale process:
“ The Company's strategy has been to develop the fully permitted La India Project in 2 stages using the new SAG Mill that has already been purchased. The delivery of a Feasibility Study on La India open pit with an average of 81,524 oz gold per annum for the initial 6 years for a relatively low total upfront capital cost of US$106 Million is a landmark and further de-risks the Project. At US$1,600 oz gold, the La India open pit Mineral Reserve produces total revenues of US$888 Million, the total operating costs of mining, process and G&A are US$480M, leading to an operating profit of US$408 Million or a 46% operating margin. After government and other royalties, but before sustaining capital, the operating profit is US$355M, which in Condor's opinion is ample to repay any project debt on the relatively low upfront capex. At US$2,000 oz gold after paying royalties, but before sustaining capital the operating profit is US$563 Million. In reality, two permitted high grade feeder pits will be added during the early years of production thus increasing production ounces of gold. Early production is targeted at 100,000 oz gold p.a..”
The highest Gold price used was 2000 and gold has just smashed through 2100.
Ceed
I think most investors share your frustration with what has been going on at SHG and understand your wish to make a complaint. However when embarking on making a complaint it is worth looking at what remedy you are seeking and what remedies the AIM regulators are able to offer. I think you will find the AIM regulators have very limited powers. If they accept there is a valid complaint they will refer it to the Nomad to sort it out. If the Nomad can’t get the company to act in accordance with the rules they will be obliged to resign, whereupon the shares will be suspended. If a new nomad is appointed in 1 month the company will be delisted. I think this is a very poor system because delisting the shares puts the shareholders in a very bad situation. So be careful what you wish for if you go down the complaint route as you may well be playing into the Patel’s hands . Let the II’s who have been buying all the shares sort it out as the last thing any of us want is for the shares to be delisted. Do your own research to check out if I am on the right lines as to what could happen.
If you recall in the recent past CNR were trying to set up a toll mining deal with Calibre using Calibres underutilised mill( it remains underutilised). The attraction of this was that could commence almost immediately and would have provided cash for CNR while they conducted the sales process or started construction of the mine. It would therefore appear to be the case that Calibre could start making money from Condors Gold from the day they completed the purchase.
The share consolidation will have no impact on the value of the company ie the market cap of the company on the day of the consolidation will remain the same as will the value of individual holdings. Just read the RNS:
“ Proposed Share Consolidation
The Board is of the view that it would benefit the Company and the Company's shareholders to reduce the number of Existing Ordinary Shares in issue by consolidating the Existing Ordinary Shares on the basis of 1 New Ordinary Share of 2p for every 20 Existing Ordinary Shares of 0.1p each ("Share Consolidation"). This is expected to assist in reducing the volatility in the Company's share price and enable a more consistent valuation of the Company, making the Company's shares more attractive to institutional shareholders.
The effect of the Share Consolidation will be that shareholders holding Existing Ordinary Shares on the Company's register of members at 6:00 p.m. on 26 March 2024 will, on the implementation of the Share Consolidation, hold:
1 New Ordinary Share for every 20 Existing Ordinary Shares held on 26 March 2024.
The Share Consolidation requires the approval of the Company's shareholders by way of ordinary resolution at the GM ("Consolidation Resolution"). Accordingly the Directors unanimously recommend shareholders to vote in favour of the Consolidation Resolution to be proposed at the GM.
As all shareholdings in the Company will be consolidated, the number of ordinary shares held by each shareholder will be reduced as a result of the Share Consolidation, but the percentage of the total issued ordinary share capital of the Company held by each shareholder immediately before and following the Share Consolidation will, save for fractional entitlements, remain unchanged.”
Particularly note that it is being done to reduce volatility in the share price and enable a more consistent valuation of the company and make it more attractive to Institutional Shareholders.
Seingred
Those are facts not manipulated facts. Just to make the point in another way let’s look at Newmont the world’s largest Gold miner which I purchased a small holding of for my wife’s SIPP 4 months ago. It’s currently down 20%. Look at the comparable performance of CNR and Newmont (NEW) over 6 and 12 months
Last 6 months CNR -8.7%. NEW -20%
Last 12 months CNR +30% NEW -28%
It has been a terrible market for Gold equities of all sizes over the last 2 years and very few deals have been done particularly in the Junior space. This is widely tipped by the likes of Ross Beatty as the year that will change. Let’s see if Jim can start that ball rolling with the sale of CNR at a good price which reflects the rising gold price.