Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
The failure to deliver a dividend return to shareholders has left this share languishing despite the company’s great potential. State plans for a dividend policy and watch share price rise
A lot of good action/news from this company has not translated into share price improvement. It is likely that is because the management are not communicating how the value being created by the company will be used to benefit shareholders. So prepare and disclose what policy will be…regular dividend policy, special dividends, share buybacks, retention policy linked to investment policy etc, etc. The company is generating profits currently at a rate that, over one year, would equal its market value……get value to shareholders clarified and this could see shares rise by a multiple of at least 5.
Gold plated need to start taking action to enhance shareholder value. They have been slow horses for too long. What is the strategy to be pursued? What investment is needed? What regular and special dividends will be paid? No reason not to communicate these answers to shareholders.
It will now be interesting to see if the bonus of half a million motivates the CEO to perform by 31 December. He has to take the action that will get the share price more than doubled by then and raise £20 million all within 2 months….is he capable of achieving this task. Let’s hope so.
Here are some suggestions for Dr Ooi in his role to improve intrinsic share value.
1. Declare a maiden dividend and state dividend policy e.g to beat inflation or to remain a set proportion of annual profit available for dividend.
2. Investigate the possibility of using extraction assets more intensively e.g can an extra shift be added? Can they be used 24/7?
3. Can the extraction process be enhanced to improve the yield?
4. Can growth be enhanced by having a third (or more) locations for extraction? In Africa? Or in South America where material is currently accessed?
5. Can customers be contracted and the market made aware of progress e.g. 60% of sales come from contracted customers. The aim should be to grow this percentage.
6. How is the stock of tailings to be exploited? In house extraction (see point 2)? Sub contract? Use to smooth performance? Etc.
Goldplat has the potential to raise its share price substantially….doubling to 15p would be an achievable short term goal and doubling again in the medium term another. Staff should be motivated to pursue the interests of shareholders and a bonus system based on these share price rises should be instituted.
It is time for management to replace vague comments on dividends with specifics. State when they expect maiden dividend to be paid, state how much it will be and state what the ongoing dividend will be e.g . A payout of a set percentage of available profit, increases to match inflation. Also state that special dividends will be paid if cash accumulations permit. There is a need for specific news to get this share moving.
CB needs to explain why he terms recent gold finds in drilling’s as successful. The finds represent a small fraction of 1% of the core obtained by drilling so why do they represent success. Clearly the market disagrees with his opinion. He should now explain his categorisation of such small finds as successful. Do they represent the start of a bigger vein?. Do they show where the border of a find ends? Or do they represent a good find as they are? Please explain and justify claims like this to ensure the market is informed.
Some great tidying up work by the CEO and most importantly some clarification on dividend policy for a highly profitable company. In the next operational review some more specifics could be made about the timing and amount of the maiden dividend and ongoing dividend policy e.g. the payout rate expected.
GGP has a MC of £800m WB has a market cap of £30m....if Wb makes a comparable discovery its shares will rise by 27 times (800/30). This gives a value of £4.72 per share.
However WB has red setter which is 6 times the size of GGP find...that would give us a share price of £28.52.
Then we have a find that is less deep and much cheaper to extract...if we have a 25% better profit margin the that adds £9.44 to price and we should retain more ownership than GGP’s 25% say 35% then that adds a further £15.10 to WB share price.
That puts share price at £52.96 .....if Cottisloe, WW2,3,4 and White Mountains are factored in the share price would be £60 plus.......life changing indeed.
Good news in RNS but negligible effect on share price. The management need to clarify their dividend policy and announce it certainly by the full year report time. The amount of dividend proposed must be known and so should their ongoing dividend policy. Given the level of profitability the maiden dividend should be at least £1million ....more if there are no plans to invest in business. This would get the price rising too....we should be looking at 15p plus.
If all went well here is what a wishbone share could be worth
GGP market cap £861m
Red Setter is 6 times the size
Red Setter is much shallower and profit margin will be say 25% greater...now 7.5 times.
We have two more plots there plus Clitheroe and White Mountain and WB 2,3,4 so multiple increases to 10.
10 times £861 m is £8610m and if that were WB value it is an increase in our value of £8610/ 18.4 as our current market cap is £18.4......this is an increase in our value of times 468.
468 times current share price of £0.12 is £56.16
Upside is enormous....let’s hope everything goes well.
Let’s hope so...trust takes a long time to achieve....it can be lost in an instant and is hard to regain...ecr CEO now needs to build a trustworthy record in delivering reliable information which hopefully is also good news.
Think 6 times, then think another 20% margin due to its depth. Then think of the other two plots have there.. then think white mountain with great surface finds, then think wishbone 2,3 and four plots then think recent acquisition with incredible silver grades. Finally throw in a profitable gold dealing businesss. If everything proves successful SP will hit over £50.