Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Add, It was a while ago, and higher metal prices will make the hardest to mine deposits easier to justify, and technology moves on. He worked for a mid sized company. Maybe the largest firms will be able to see beyond the complexities.
I see that BHP are looking at Oak Dam in Oz. The deposit is 700m under cover, twin tunnels taking 6 years to complete. No ore for at least ten years. But thats Australia not Ecuador.
Terry, I didnt say 20p, I said in the 20s.
Its an opinion, like yours and everyone else on here. But when no one has bid yet and the queue for that data room isnt a queue anymore, what do you think the buyer(s) will be thinking? 'SP at 8p, ooh I think I had better bid £1.20 just in case there is someone who might pay 35p'.
When you have run out of money and there may be only one or two buyers, who do you think is in control of the process?
I havent really bothered to post on here for a while given the petty squabbling and entrenched views being repeated over and over. But IMO the situation is becoming clearer, though the end result isnt. Here is how I see it:
1. This isnt an easy sale. I know that the deposit is very complex and the cost to mine is enormous. Why do I know this? Because someone who works for a company who has looked at Alpala told me so. He is a near neighbour. It puts a lot of people off.
2. SC might not be everyones cup of tea, but is there an alternative that will get a better result? I really doubt it. Another mgmt team will weaken the sp further (more uncertainty) and they will be trying to do the same thing, but it will waste another 6 months min.
3. The past has been an unmitigated disaster. Clearly an appallingly run company with blame all over the place. A complete rogues gallery, Mather, Ward, Cazzubbo and probably Twigger too (though I have it on very good authority that he is a top bloke doing an impossible job).
4. Quady still thinks that we are going to production with a staff of seven and no management skills, but we can hire in hundreds of people who are fully qualified and just walking the streets of Quito looking for a job. He says listen to the company - 'We are mine finders, not mine builders'. I just did Quady, sounds pretty emphatic doesnt it? Any move to mining will be the final nail in the coffin, proving that there is NO buyer out there.
5. So 45p to 8p might be The Lassonde curve, it might be junior miners getting crushed or it might be that Solgold is one of the worst run companies in history. Probably all three.
6. We are left with one plan, and everyone knows it. The hope is that Alpala is such an amazing deposit that every big guy wants it and a bidding war will ensue. Its a bit like the traders prayer - 'Please God get me out at breakeven and I promise I will never do it again'.
7. How many buyers are there with this kind of money, who hasnt made big recent investments elsewhere to keep them occupied? BHP and the Chinese. Maybe the Chileans. Forget about Gina, Twiggy, Barrick, Newmont and Lundin.
So we are left hoping and praying that the Chinese want it and will pay a price in the 20s. There is no alternative. All IMO....
Bozi, he has written a book on it!
You are absolutely correct Starbright. All these options are valuable as options, as they confer the right, but not the obligation to buy the shares. The 'value' as options is lost when they are exercised. Time value of money and all that.
IMO there are only two reasons in this case why they would be exercised earlier than near expiration. Firstly to launch a bid for the company and secondly to acquire voting rights to stop someone else buying the company. IMO I think both of these situations are unlikely atm, though obviously not impossible.
People who think options should be exercised just because they are itm dont really understand options.
Two different things Frigger. He said no way upcoming MRE will be 20m but previously said if you do the volumetrics it’s easy to get to 20m.
Gina Rinehart has bought two 20% stakes in Lithium companies in past two weeks. Quiet? Hardly.
Quady, the opposite to a sale is a purchase. So is Solgold going to buy Cascabel? That would be a novel idea.
MH01, that isnt how I understand it. Share distribution. Not sale and cash.
Morning Sand. Nearly every holder of Sve held because of their investment in Ggp. Now those Sve holders will actually hold Ggp shares. You could make the argument that Sve was so illiquid that the shareholders couldnt sell Sve even if they wanted to, Now they have a more liquid investment so they can. But overall I think most Sve holders like Ggp and so will not be sellers. Thats how I see it and I wont be selling.
Well done Mark. Happy to be of some help.
It was an excellent way in to owning GGP, getting 1.5 GGP shares for every SVE and paying less for the privilege. It was very illiquid recently but a few years back it was pretty easy to accumulate quite a few. So I did. Nice start to Friday.
There is a wealth manager in Somerset who will be popping some corks this morning as they had built quite a stake.
Also Callum will now hold a lot more GGP.
Dip, thanks for your conservative calcs. I was v interested in Dons methodology, using a high production rate, a very high gold price and a high multiple, it’s quite easy to get to a pound. So the obvious answer is that value is somewhere between 20p and 100p.
By the time we get any kind of proposal from Newmont that is worthy of the board putting it to shareholders, we may have lots of other news and information that narrows that spread a bit/a lot.
So my answer is definitely not accepting 20p, definitely accepting a quid and for anything in between I will judge when the time comes.
Speedy, more wise words from the sage of Southend.
Tig, You are investing basis last years philosophy, so asking the wrong question. In a high inflation, high interest rate environment its really not about the size of the resource, its about fcf. So the real question is not whether its 8, 9 or 10m ozs but when will we have fcf.
From a waggy tail, not snappy, spaniel.
Speedy, there is. Its called the Shanghai Gold Exchange.....Trades at $100 premium to the false market. But I know that you know this:-)
Tig, there is definitely more than one earthly reason, and one very obvious one. Just a pity that you cant see it.
Two great finds HG. Thanks.
Excellent discussion between our best and most knowledgeable posters this morning. 👏👏👏
Just read the lot as I woke up in Vancouver. Flying home tonight with a good feeling about the assay results coming up.
Trippy, I think GH was ok at getting the sp from 1.5 to 6-8p. After that he had no influence.
Some of stuff about GH might surprise you. It horrified me…..I am no fan anymore.
Given the options package announcement a couple of days ago, it would be really bad form for any significant news to come out so soon after that. So my guess is no more news till assay results.