Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
Looking at recent moves around Juri and Rio JV, seems like Newmont, via Newcrest + GGP are establishing a footprint that may be able to keep Telfer going without having to negotiate/rely on others outside that group. Leads to thinking there's potential for Newmont to acquire GGP or keep us as a tight partner in the region. Maybe...
Dip - to your earlier post in final para "as earlier shareholders we carry more risk but hopefully more rewards in the longer term" - that's exactly why some of the explanations around dilution that have been posted here are misleading. It's easily researched, but as long as debt financing is obtainable it will nearly always be better for 'earlier' shareholders than raising funds through issuing more equity.
JS - it doesn't really matter but you keep posting factually incorrect statements about what dilution is/means, which means unnecessary confusion.
https://en.m.wikipedia.org/wiki/Stock_dilution
Loggy - I think that's right. If we end up holding a smaller proportion each, and the market cap (as represented by share price X number of shares) doesn't increase proportionally then that's not good, but shareholders expect the management team to work to provide above typical market returns (otherwise we'd just invest in an broad market index tracker) - and make those funds raised work harder than cash in the bank e.g., make the funds work by building stuff and producing stuff. Personally I prefer debt finance with a belief the company can make enough to cover it (and eventually be less beholden to the debt) vs. holding a smaller proportion of the whole for ever...but I know there are those who don't like the fear of the next repayment installment and understand that too.
"Share dilution is when a company issues additional stock, reducing the ownership proportion of a current shareholder"..proportion being the key word. Even if 100 more shares were sold for £1 million each we would be 'diluted', but the share price would (hopefully) go up! So more shares would mean dilution for us, but that doesn't mean each share's value goes down.
No doubt lots of positives on where we have got to - but also no doubt PIs have taken a beating on what it's taken to get to this point - I think GGP board and Mgmt need to be open that they understand that - even if it was all about fixing the legacy/inevitable and GGP have made the best calls they could on debt, equity/dilutions etc.
But what's done is done and, end result, we are where we are and hopefully it's onwards and upwards from here!
Only for those interested in detailed analysis on broker price execution - whether mid-points between bids/offers get met or bettered for different buys/sells etc. Posting here only due to the regular debates about what's a buy vs. a sell on trading summaries etc.
It's pretty dry but I expect some more analytical folk may be interested:
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4189239
Tradeorlth - your statement -
"The only people who would ever make decent profit are LTH who bought in low as well as Newcrest"
In my opinion you're likely to be proved incorrect. The upside potential is huge - no one can guarantee what will happen. But your black and white statement seems a bit over confident and negative. Let's see...we are currently mid 10's - so you say anyone buying in now won't double their money within 18-24 months? Let's see...
I was surprised NCM didn't take the option - but thinking about it more, they are in the business of mine development and production, so metrics they use pre-production are very conservative (as we've seen). GGP on the other hand are in the much higher risk business of exploration - only recently with some stake in development, and aspirations to enjoy the revenue from production - net result of the different business models is, 5% of hav worth much more to GGP then NCM at the moment. All good news for us as a predominantly exploration co. at the moment.
The 5% for 60mm deal wasn't a good one for GGP - a legacy of the buy-in that's now gone away.
There will be a need to repay the loan from NCM and to raise further funds. The REALLY good news is that if we were to dilute in order to raise funds it will be from a base of 30% hav ownership, not 25% - that's fantastic news for all of us shareholders I reckon! Certainly in my mind I'd factored in we would be at 25% when/if there was a fund raise via a placing.
Jiffy - your second paragraph is key. You don't want to overburden on interest - but as importantly you don't want to be too cautious and decide to sell off bits of the company (e.g., create and sell more shares or royalty stream and give up future income) unless you really really really have to.
Those big steady income utilities, like the water companies, have (deliberately or at least knowingly - from my perspective), taken on way too much debt to give dividends to their shareholders and cover their initial acquisition costs - they would have always known there was a downside risk if interest rates went up, or, say government capped price increases - but would have made huge sums before that happened - and quite likely, scarily, banked on government funding through any bad patch before any negative environment improved!
Spade...i fully agree...borrowing money, in order to buy assets that can generate revenue above the cost of that debt (or lower than the renting equivalent for your housebuying example) makes sense.
Lots of private businesses try and run debt free - and can do very well doing so - but when they need to, or want to, grow fast/faster, taking on debt is a sensible business decision if they have their house in order to generate more revenue and cover the cost.
The facts speak for themselves - how many companies run debt free? Almost none - as they borrow to allow them to grow faster. That's what most shareholders want I'd have thought.
Personally I'm dead against a royalty stream type deal - giving up future revenue just doesn't make sense to me (and clearly, if it happened it would make sense to the lender so.....) - I'd much prefer we used traditional bank financing...if we can... and with as good terms as GGP can agree with lenders. I can see some dilution may happen which would be a shame for us, but the board and SD know they need to work in interests of current shareholders too so need to be careful.
SD has told us term sheets are nearly there with several major institutions - so from my pov, I hope we can secure the funds from the 5% + another chunk in debt that will see us through until some production and cashflow develops.