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For all those who are running their numbers and stating that a number of X for the 5% means/translates into a certain SP, or SP change. Bear in mind 2 things (amongst others):
1./ As per SD, the value of GGPs stake in Havieron will be much bigger in 4-5 years, so any commercial offer for the 25% would have to be above and beyond a current technical valuation (e.g., that for the 5%). Basically the FMV will be 'too low' for those who see more upside - that doesn't however mean the SP needs to reflect that.
2./ An FMV valuation SP equivalent will almost certainly not be the exact number people are willing to sell at (e.g., many shareholders here for example), or buy for. So the SP will move on desire to hold shares in GGP, looking at the short, medium and long term story - not simply the technical valuation of ownership of an asset.
Imo
Hydro - interesting letter, and a review of certain activities certainly not a bad idea - whether it throws up any fraudulent activity who knows. If you are sending it/have sent it you might want to send same/similar to London Stock Exchange compliance head, as they have initial compliance oversight and responsibility for AIM "AIM operates, and is regulated by the LSE in its capacity as a Recognised Investment Exchange".
It would of be perfectly reasonable for the brokers views to be brought into discussions - they may be tossed out/debated for all sorts of reasons, including lack of full knowledge, assumptions that GGP/NCM/independent disagree with - but they are still data points. Remember FMV assumes a market view of value, not just a mechanical one.
Stebo - I think, in general, a later valuation would equal a higher valuation. Rationale being that as time goes by things move from a higher risk profile to a lower risk profile - that move increases the inherent value. Obviously it could go the other way too, but I err towards the positive.
I think getting 5% now can be seen two ways in terms of value. The positive - takes out risks regarding funding, the negative - 5% of the asset may be more valuable than the cash (which will be spent/get inflated away), depends how well it's utilised - ultimately that's what we have the management team for.
Agree that the share price might re-rate as there will be new baseline value attributed to the asset - that will likely reflect a 'premium' to current share price. Going forward, with further MREs, feasibility studies etc., The value will likely go up again (see first para) and that should be reflected in SP.
Either way you think about value/SP directionally it's upwards, so that's good.
There are 3.9+ billion (yes billion), maybe 4 billion, shares being sat on by long term holders - when we were peaking at the 25+ levels I'm sure some took profit and some new people entered...but that was 12 months ago...3.9 billion+ sitting under people's hands. How do you extract them?
Wear down patience is one option. Wait for a big placing/dilution is another. Option 1 clearly not working despite efforts of some. Option 2 not necessary after a small placing set-us up for 12 months and the 5% will do a good chunk more.
So, what happens? The good news fundamentals get proved, and added to, and proved again - hit the press, get pitched to investors, inc. institutional investors, and they come in harder, willing to pay more ... And eventually the dam bursts and we see more liquidity, providing more potential for the SP to actually trade upwards rather than have meagre back and forth's between short term punters...I think.
Tymers - if you were responding to me you misinterpreted me. It's not revenue per se, it's enough sentiment/facts/numbers to bring in some new investors - hence the next few weeks could lead to a short term move, then the series of announcements in run up to DFS etc. Etc.
StarB - good point. I think the MM's probably also having a good chuckle about how they've managed to consistently work the spread for GGP to take a bit more than they might with a more liquid stock/less sticky PI hands. The strong PI belief in this company/project (including mine) means there just aren't that many shares being traded, and it's the back and forth of a very limited subset of the whole that's setting the price. Eventually fundamentals will win out, and not having nervousness about our financial position make a huge difference Vs other investment options.
Drilling results (this set and previous ones) will lead to a good MRE update in a couple of weeks - that update will have more direct impact on SP I think as those numbers more readily plugged into valuation models etc. I think it will take a while to reach some of the projections made on here though. Directionally all good though, just takes time (and patience) even though it's progressing at rapid pace!).
Notrader/Dip - I'm fairly sure that a sale of the whole 25% would require shareholder approval. A slightly smaller sale may not. An offer which the mgmt did not want to accept would not need approval for the rejection either I think.
I think the AIM 10% rule is about notification vs. approval. Shareholder approval comes in with the 75% of assets test.
I can't come up with a rationale for a further sale though - I suppose a mega offer could come in but in that case I'd expect board/mgmt to go to shareholders even if not obliged to.
SAS - I think you are 100% correct - the FMV, by definition, will include assessment of future - if it didn't it wouldn't be fair to the seller. FMV, in theory needs to be fair to both parties. How probabilities and risk assessments of future are done is probably quite complicated - and the idea of baking in future payments once more information is known sounds neat, and it would be nice if that happened; I'm just not convinced NCM would agree to that as it dilutes what is their clear objective to hold more of the asset without any liabilities to their partner...
Syd....fully agree...the idea of the 5% deal was put in place a while ago - the risk of not getting maximum value is a sunk 'cost' of getting NCM on board. Fortunately this sunk 'cost' will actually be millions of dollars coming in to GGP (Vs just being another earn-in like the other 70%). It may be that the FMV used is an annoying distraction (why so low?), or a really positive one (our remaining 25% looks super valuable) - but whatever, looking forward a bit further 25% of the mine with less need for debt/equity dilution than without the 5% deal...