Not necessary. Debt is reducing by £160 per annum anyway. Dilution will drastically affect future SP . Investors walking away already. Without it SP would have increased substantially today.
It was a disastrous mistake to hedge 40k ounces at $ 1250. It was a disastrous mistake not to deliver the hedge at $1600 or less. That would have cost us £14m total. The un-delivered hedge is now costing us an extra $450 per ounce !! It all smacks of a board which has no confidence in gold price increase. We invest in gold mines because we do have that confidence, so how can they claim to represent our aspirations. In January we were told that a resolution of the VAT issue was weeks away, but nothing. The same seems to be the case with the Kenya deal Does anyone still believe ?
If shanta is shut down, how would it fulfil the hedge commitment ? Would it have to buy in 30K+ ounces of gold - or pay out $10m+ to the hedge provider?
The loss making was due to fixed price contracts, which we were assured GFRD would not take on in future. So can we assume these new contracts are cost plus?
GFRD is currently valued at £769m. in the market. The Bovis offer values Linden alone at £1.075bn. So GFRD sp needs to rise to £10 before any value is attached to construction division. Any views on what construction is worth per share?
I reckon it will cost Shanta $13 million if the price stays at the current level till next May. Whoever is getting the gold at $1241 has done a very good deal.