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I can see both sides of the argument here but it does just feel a little off to me which is why I sold out at 89p this morning to protect a small amount of profit I still had here. Will be interesting to hear from HZM in this presentation what the rationale for all this is.
Having secured the debt originally, with what was no doubt a buffer for inflationary pressures built in anyway, then you add in the fact a lot of costs are non USD, which with current USD strength only reduces costs. Something doesn't add up. I have a feeling HZM are now becoming a passenger in this journey to production and the big boys are slowly turning the screw.
40% dilution was too much for me to take on the premise this is purely a hedge to withstand "inflation".
The argument I saw earlier of "NPV to Mcap will soon close" needs to factor in any potential further dilution, debt repayment etc etc.
Possibly there is a very valid reason for all this but I would expect if there was, HZM would have been more explicit in the first RNS and not call a meeting at the request of disgruntles shareholders.
Potential here on the projects is significant, I don't argue that. However, it does seem more and more likely the big boys take a further slice of the pie cheaper and cheaper each time until there isn't enough left for anyone else ot really reap the rewards.
Not to mention the fact Jeremy and Co took the most pathetic part in this raise!!
We had better hope they have something up their sleeve with regards to funding. Being a month away from running out of cash is not a good place to be and this statement after your quote CF73 is a little worrying. Currently, this isn't the kind of market you want to be going cap in had asking for funding when you've made it clear you're almost out of cash....
"At present there are no binding agreements in place and there can be no certainty as to the Group's ability to raise additional funding or the terms on which such financing may be available."
Although frustrated....I guess it's only fair to look at some of the positives. Goldstone are producing, and yes a small operating loss but it looks like the gold production process is running at an okay margin given what we knew about the cost of raw materials in Ghana especially the Diesel.
revenue
5,250,298
cost of sales
(3,157,003)
There we go.....production target now stated as a "minimum" of 7000oz. Just cannot catch a break this company.
Terribly communicated as always.
I hope the next few Akrokeri drills are something special and the Homase resource is materially upgraded in the coming weeks from additional drilling. Otherwise its going to be a long old wait for a much needed uplift here!
And they snook in the potential for more funding requirements...FFS!
That’s one way of looking at it but all defaulting does is add an extra couple of percent to the interest accruing, hardly catastrophic.
Would much rather know the reason behind them choosing not to pay this off and extend maturity.
I hope it’s capital preservation for some exciting upcoming work (maybe around Akrokeri?) and not because recovery rates are still **** poor.
Bill Trew at the AGM seemed to suggest 14koz was still the target so I hope we haven’t been lied to here!
CF73 - The solar project is all well and good with some okay economics relative to Mcap.
However, let’s address the elephant in the room, this statement:
“Current cash position provides a working capital runway to the end of October 2022. The Company needs, and intends to secure, additional funding during October 2022, with the Second Tranche being one short term option. Further announcements will be made in relation to funding as required”
200k in the bank, only enough funding for 1 month and an explicit statement of the company “needs” to secure funding over the next 4 weeks. As soon as you say need….that’s alarm bells when Hanno is involved. It’s running on fumes this company and we’re always the ones who take the hit with dilution after dilution!
Was expecting to see interims given they are due by the rules of AIM within 3 months of period end, so where are they?
Even more frustrating, as is always the case with this company is the lack of clarity around why they have extended the loan. Just tell us, or else it looks like you’re hiding something.
Is it low gold production? Apparently at the AGM 14k oz was still achievable this year!
Is it just capital preservation for additional activities? If so, tell us that.
It’s really hard to know how to take this news (given the loan should have been paid off by now per the original schedule). Needs clarity on what gold they have poured to date!
Assuming we can expect to see those tomorrow...will give a good idea of where production is at and revenues
Good job there’s a PK data readout in Q4 then isn’t it, numpty. With that I imagine will come a licensing deal for 3996 and no need for any form of dilutive raise. Read the RNS, this bit fills me with confidence
“The Board believe that a significant near-term value driver for the Group is the clinical data from the phase I study of AVA6000”
Keen to see what the production rate now is at Homase!
Finally something positive here (and generally given markets at the moment)
Some okay intercepts there especially 22AKDD002. Nice they are updating as assays come in.
So these are deliberately “shallow” holes which is good as it means mineralisation found will be mineable using current infrastructure.
Represents only 1/6 of the drilling planned so let’s hope it carries on at good grades.
That’s average over H1 calamari. Price is only realised on delivery for vanadium. So there will be a lag in those elevated prices hitting the bottom line. Will also be impacted by lower Q1 prices - hence AVERAGE.
It’s a positive update with some marked improvement from a tough market in recent years.
Yes guidance down slightly but load shedding is out of their control.
Things are looking better for the near future.
How about you quite the endless doom and gloom?
Investor81. Have a read of the snip from the afr article in this tweet. That’s one reason.
https://mobile.twitter.com/YorkshirPuddin/status/1569224956810072065
Secondly, bringing on an institution adds some well needed clout to the share register and they won’t be selling into every 5% rise or bailing on every 5% drop.
The huge amount of PIs in this stock are the exact reason GGP is where it is right now. It needs more non retail investors, which is now the case!
Agreed wasa - Akrokeri drills coming up good would be a nice RNS to have in the hope of adding some positive momentum here.
Like you say, what we really need to see is a production update at Homase because in all honesty, that is what clears the debt (albeit minimal) and will fund any work at Akrokeri and even pay dividends.
Right now, Homase hiccups are the driver of the SP slide. If the can show the plant works effectively and recover rates are where they should be, that will bring back the confidence they can grow this company to its potential.
Right now, you couldn’t argue with anyone saying “Akrokeri has some amazing drills but they can’t even get their house in order at Homase so how will they do that on an even larger scale”
Operational update soon please GRL
Thank you for taking the time to post this. Good to hear they acknowledge their shortcomings and that the production rate is still on track. That should put some £ in the bank depending on impact of current climate on AISC. Interesting on dividends too.
I’ve pasted my email to them below which shows at least they do acknowledge questions from non attending shareholders as you have literally answered them all! Thanks again.
Good afternoon,
I am unable to attend the AGM in person this week. Please see below a number of questions and comments I have to raise to which a response would be much appreciated>
1. Was the gold loss attributed to the robbery insured, and the company able to recoup the value?
2. What is the current state of Akrokeri drilling and when can drill results be expected?
3. What is the company's policy towards frequency of investor communication? To date, investors are kept in the dark for months on end, to only be told what is usually bad news intertwined with wider releases.
4. Is the current 2022 production guidance of 14,000 oz still on target?
5. What impact on AISC have the rising prices of fuel and intermittent diesel availability had?
6. What does the company plan to do to be able to deliver some returns to shareholders in the near future?
Regards,
Hi Johnpwh. No problem. Nothing wrong with differing views and a polite debate! Rarity on these bbs!
Here’s the extract from the RNS:
“As proceeds from any option exercise were always required to offset the existing Newcrest loan first, the Company was not planning on receipt of proceeds for its ongoing funding requirements. In parallel, the Company's debt funding strategy incorporated flexibility with respect to its ownership level of Havieron. Accordingly, the 30% ownership of Havieron is accommodated within our debt process and is a continuation of business as planned."
So that is where I disagree with you stating the 60m would have avoided a placing. The option funding would have left 10m or so in cash, not going to move the dial in debt financing conversations.
This has clearly been in the pipeline a while and just dragged out by the ongoing 5% debacle. Dare I say it knowingly by JPm and NCM!
johnpwh - why would we have been better off getting $60m for 5% of Havieron. Yes in the short term the dilution is a pain. However, cash on balance sheet was likely a condition of the lending. Just like any bank wouldn't give you a mortgage to build a house if you didn't have a penny in the bank.
Remember, this will fund us to production, where after that, revenues fund the further development.
The current reserve of 6m ounces is a portion of what Havieron will be over time. That 5% is worth a lot lot more to GGP in the future than the opportunity cost of not getting $60m in the bank from the option.
ALSO...the proceeds of the option would have had to pay off the 50m Newcrest loan, so it would ahve had minimal bearing on the funding route, it will just have been a factor in the debt part of bank's credit checks/approvals.
I'm annoyed the shorters got out free, Biswas playing games was a kick in the nuts for PI's and the bear market at the moment meant placing was at a poor price.
However, it's done...we are almost funded to production (debt tbc) and I would much rather suck up some dilution to retain 5% of what we know is a 10m+ ounce ore body...minimum
Slide 10 of this presentation:
https://greatlandgold.com/wp-content/uploads/2022/03/GGP-Investor-Presentation-Mar-22-1.pdf
-Greatland share of upfront Capex is low US$73m plus the US$50m already funded through an existing loan facility.
-Greatland share of upfront capex of US$73m reduces further to US$53m if contingency is excluded
So we can assume the 50m loan wont be paid off with this raise, why would it be?
US30m to be raised via the placing (possibly more as it may well be oversubscribed by shorters **ahem JPM** wanting a cheap out!) and hopefully the residual is done via debt financing.
That's GGP covered to production, where FCF generation will (if we are to believe Shaun) provide the ongoing financing for further Havieron development.
There will also be cash available to get to the 100% owned sites now which could add some optionality.
Sucker punch that the shorts got out for free and the PI pays....but the uncertainties are almost all out of the way now and we can move on to production, funded to get there.
The shorters playboook definitely certainly worked to perfection for them. Why wouldn't it, there is no way they didn't know there would be an easy exit. The dragging on of the 5% certainly helped them pull it down to get out scott free.
However, we knew some equity raise would probably come as part of the debt financing package so hopefully this is a line in the sand and we can start to rebuild from here.