Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Sein - I think that you are a very sensible poster. Some have called you a de-ramper, I disagree. We shall see where we land. Whatever you think of JM, he's a successful entrepreneur. I worked with a guy like JM for many years ( not as wealthy, but a really impressive guy) and I just look at the numbers being kicked around and I don't see JM giving something away that will probably have an ultimate NPV of more than $1bn for next to nothing. Why would he ?
I have similar expectations. As stated, JM was never going to give this away. He knows that at $2,000 an oz ( I know that we've drifted below this), the BFS just for the current permitted land has an NPV of $600m. They are also trying to extract value for the fact that there is likely to be 12.5m oz on the entire. Why would somebody who could easily fund this into production want to sell it for peanuts ? From a sales price perspective, i think it's great news that things are taking a while. If we were as desperate for a sale as some believe ( not saying that we won't need to inject a little bit more short-term working capital), we would already have reached a deal with one of the 4 non-binding offers. GLA
I will get a cgt bill but the profit will be out and available for me to use, but if I leave it in the sipp, it will initially be tax free, but is then taxed when I take it out in any event, so not a lot of difference in paying cgt or income tax as I draw monies from my Sipp. And although the Tories have currently removed any cap on sipp size, this is likely to be short-lived, so I'd potentially face 55% sipp extraction tax at that stage. So I'd rather take it out now at a rate that know.
£100k trades are mine - just moving shares from Sipp to Trading account. I've got a biggish holding in this. I've been carrying the risk in my Sipp. But now I'm expecting a doubling or trebling of my investment, I'd rather have that big gain accessible in my trading account instead of having it tied up in my Sipp
I agree that the Nic govt wouldn't let JM hold Condor as a non-producing gold vault, and that it is pretty likely that it will be sold. But if I was JM and could see an npv of $769m at $2,200 gold price ( and believed in a higher gold price), unless i could see some good value on a sale, i'd be tempted to put $50m funding in to enable production if it meant grabbing a good chunk of that addnl npv. Hopefully we get a good sale price, and everyone has their views on this value, but if you had relatively unlimited funds, why would you sell something worth $769m for $150m ? -I wouldn't. I HOPE that JM and Ian Hannam play hardball and get $300m for it.
I agree 100% . JM may well be a granny-robbing non dom, but he's a shrewd player who seems to make money from most scenarios - I don't see him giving an asset like Condor away for a bargain basement price. Particularly as he effectivrly controls it, it's acknowledged that the Junior gold players are at the start of a renaissance, that the gold price is on a possibly sustained upward trend and the asset is oven ready. Other than political risk, why would such a rich guy as him, who believes in $5,000 gold, even be contemplating selling this investment unless it achieved top dollar. Condor is a long-term gold vault for him - if offers don't match his value, I think he could well keep the thing.
Yes - I think that Mark is a cautious chap, who is concerned about what he says. I think that he wouldn't have mentioned $120m as a hypothetical price if he hadn't already seen an offer at this level. So 55p minimum, but then, with JM and Ian Hannam on board, I would be quite confident that they will absolutely not undersell this asset.
120m isn't a killer bid, but in my view, Mark would not have used this as a hypothetical example of an offer if this level hadn't already been beaten by one of the non-binding offers. He also said that if the right offer wasn't received, the Bod would have to have an alternative plan.
No matter what anyone thinks of Jim Mellon and Ian Hannam, they are not going to give this asset away.
I've always suspected that for an investor like JM, having money tied up for the long-term in a gold deposit when you believe in loger term price rises in gold is a very logical play. I have never felt that he needed to see production
Interesting times - who knows what price we'll get for the asset sale, but in some ways, the market caps of other entities are not necessarily a good indicator of how much the king of mining can extract for this. I'm sure that one of the reasons the board decided to sell the asset was because we now live in a world where the the esg focused western markets will never again attribute full value to a dubious investment in a sanction threatened backer of Russia. So the same must surely be the reason why Calibre are undervalued.
I think/hope that the combination of Hannam and Jim Mellon, who are both wily deal-makers, will allow us to extract maximum value.
Jim Mellon could take this private if he wanted, and given his longer term views on gold, he still may do so, if he doesn't get the value that he sees. IOM based billionaire owning a reserve of gold for the long-term in Nicaragua. Is that any less likely than the Chinese buying it ?
Whilst i don't want to get ahead of myself, and i'd be accepting of an asset sale for $150m . If we believe that we have 14m oz plus, but offers only attribute any serious value to the 2.4m oz, why don't we sell the 2.4m oz , keep $20m of the sale price in the company, prove up some more gold and then sell some more proven reserves. I know that it's more complicated than that , but why give something of potentially great value away for nothing ?
I agree that any offer here is going to have to have the 'blessing' of the Nic government, and is likely to be an offer from a non-western player. But I think ( or is that hope) that the lack of an RNS is good news. They can't give an RNS if they are haggling with parties, but if they had received no offers, or indeed no offers at a level the BOD consider to be a reasonable level during the last 3 months, I think that they would have had to have RNS'd that. So my take is that they must still be in 'the process' with parties at a reasonable level.
I'm quite hopeful of a reasonable return here. If the London/Canadian markets are only prepared to attribute £35m of value to Condors oven ready project just because it's in Nicaragua, why wouldn't the owners of that asset seek to realise value in a different marketplace ? Unfortunately this is the woke western world that we live in. There is $400m plus of NPV in this project. This is real money - the risks to collecting this money are that either the Nicaraguan or American government decide to change the rules of the game. Whilst this might be an issue for western investors I feel confident that there will be some Chinese investors who have a totally different risk profile.. To them, the opportunity to acquire an oven ready asset with $400m of NPV must be hugely attractive.
I'm not saying that we'll get anywhere near NPV but i'm sure that the combination of Jim Mellon and Hannam should be able to find a couple of buyers who see a lot more value in this company than £35m.
As for Mark Childs - I think that he has delivered an oven ready project, but the powers that be (JM) have then looked at how they now extract best value from this position. They could continue to struggle against the new woke western market system ( with the inevitable conclusion that in this new environment Condor will never achieve an acceptable market value ( it might, in 5 years time become a good dividend generator)). Alternatively, they could conclude, as they have done, that the best course of action is to sell their valuable asset into a world that still assesses value in pound motes rather than in 'Likes'.
Come on Ian Hannam let's drum up all the non-western interest that you can.
You may have guessed that I'm long Condor
One of many good posts on here. Seem to be in 2 camps - those which suggest that the SP might go down short term ( of course it might) & those that think it will rise in the longer term ( whilst hoping that the " longer term" won't be too long at all , specifically if a toll deal is announced). I know that the market sets the price both in the shorter and longer terms. But the one thing that hits me from MC's recent presentation is the NPV of $418m. Surely, this is a reasonable approximation of what this company is worth. I also presume that in getting to this number, CNR have priced in the cost of buying in the finance required to deliver etc.
If the company is worth circa $418m , then one day soon, specifically if a toll deal is announced, you won't be able to buy this share for anything like 30p. So , as they say, you pays your money and takes your choice. Do you want to trade this share and make a few pence per share - ok , maybe 30%, or do you believe the company projections and hold the share for a multi-bag. It takes all sorts, but I am not a day trader ( never been to Ladbrokes in my life). Good luck if you're trading this share and trying to make a quick buck - it doesn't do anybody any harm, but I've bought these shares because I essentially believe the numbers, and further, Jim Mellon is not a stupid investor, who loves a good multi-bag. I don't think he's turning his stake every other week. If he was, the share price would be in single pence. The fact that he's sat there ,continuing to hold his shares must give great confidence. I know he's not doing it for the greater good, but his stability inevitably helps 'our' company share price.
I'm definitely not a de-ramper, and on the basis that I'd like the share to fulfil what I believe is it's long -term potential, am I a ramper or just an optimist?
This share will multi-bag , and it won't matter whether you paid 20p or 40p. Just hope you're in when they make the announcement.