Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Seingred you have spent a lot of time and effort over the past few days (and the rest) swiping at condors potential, yet you're more than happy to comment positively on this board about shg or cryptos.
You say condor is your biggest holding but this just does not track. That's not to say that you have to go to the other extreme, but in all the years you've posted here it would be hard to describe your attitude towards condor as optimistic, let alone positive. Yet the moment the share price finally catches a bid, here you are posting multiple times a day how the deal is going to be struck at a low price but not to worry because you are already in profit.
Are you just doing this in service to other shareholders? What a good citizen you are.
And connect remember that just because new investors may have lower average their positions are much smaller than us LTHs. For them to build comparable positions it would push the sp up to our averages or higher even.
I would even suggest that when the assets are finally sold you should make a comfortable profit that in absolute terms would be much higher than newcomers.
The sp hit 34p in April on the back of people positioning for a binding offer, when that didn't materialise those people slowly sold out over the rest of the year and the so drifted down. We've just seen a similar sharp rise to back then so I expect the same thing is happening, if so we should drift up to around 30p and then again there will be a short window for a deal to be struck before people start drifting out again. If the sp is 30p then it makes an opening binding offer of 40-50p more palatable especially with the gold price holding steady above $2000/Oz.
Let's hope MC can indeed get an acceptable binding offer in q1.
Steady rises are good Connect, shows that some people are taking profits as the price rises leading to additional buying. the 200DMA is at 23p so let's see if it can work it's way to that by the end of the year.
Punter I could be wrong but I believe nominated "insiders" to the sales process are governed by the UK Takeover Code and are thus prohibited from buying or selling shares - though I don't know what the code says in relation to converting existing warrants.
Seingred, I shouldn't need to tell you that comparing assets based solely on the size of the resource is disingenuous at best. At least compare it based on NPV if nothing else, which as posted before is much closer than you'd expect. Not to mention that Nicaragua is a much more stable and far less risky jurisdiction than Africa.
Also, I wasn't aware that SHG are selling their assets? You wouldn't be making the mistake of comparing market cap to asset value would you? The stock market bears pretty much no relation to what companies actually do anymore, it is simply a vessel for paper speculation and has been that way since at least 2008.
The fact is noone here knows what these assets are worth to a buyer, it could be 20p/50p/£1/1.50/etc, no one knows until we get into a competitive bidding scenario and potential buyers are forced to put their cards on the table. ICB has as much chance of being right as you do. Besides at this point, I think we're all beaten down and hoping for at least 40p with anything more being all our christmases coming at once!
I'd caution everyone not to read too much into daily share price movements of an illiquid share (have we learned nothing?). Wait for confirmation of any binding offer before falling yet again into the Condor excitement/disappointment cycle!
Surrey, the price that the assets will sell for is unknowable, ignore all predictions as only the market can determine this. JM/MC are currently trying to enable price discovery through competitive bidding, but this will only really happen when the first binding offer is made public and subsequent competing bids come in (or not).
The share price (market cap) is not an effective valuation as LSE is general is losing liquidity. That does not mean the companies that list there are not viable/valuable, it just means investors are forsaking the UK stock market for other jurisdictions. AIM has suffered for this reason, and combined with huge disinterest in gold miners we have the situation where Condor has an NPV of $400m+ but the market cap is £25m. It is not a reflection of company value, it is a reflection of lack of interest in the stock/stock market.
Let the sales process play out and afterwards we can all debate how close the final price was to our estimations.
Seingred, the mention of Cardinal was merely to illustrate that competing bids appear once the first binding offer goes public. It's not the case that a deal is done in the shadows and that's what the assets sell for, that's just the starting offer. One of the issues with Condor's sale I think is that many interested parties think Condor will go under or whatever, and they will get the assets on the cheap. Well, if they then see a binding offer appear for $150m then they will be motivated to bid up to their estimated value of Condor's assets.
Also with respect to Cardinal, their resource though much larger was also much lower grade:
- NPV of $590m, IRR 33.2% (Condor upside case: is $418m and IRR of 54%)
- Capex required for mine build $414m (Condor UC: $160m)
- 1.13 g/t Au (Condor UC: 3.18 g/t)
So who knows. I think we all agree that the assets will get sold, but it's anyone's guess as to how much they'll finally go for.
Remember that when a binding offer is announced publicly it does not prevent other interested parties from submitting their own counter-binding offers, that is how the assets will find their market value, just as what happened with Cardinal a few years ago:
"Condor Gold shareholders should look to the example of Cardinal, a West African gold explorer where a similar situation unfolded. Against the backdrop of a rather lacklustre situation, Cardinal stock was trading at 25 cents in March 2020, when bid interest emerged for its high-quality gold assets. As sometimes happens in such situations, competitive tension between several bidders led to a series of bids – first 45.775 cents, then 60 cents, 66 cents, 70 cents, 90 cents, 100 cents, 105 cents, 107.5 cents, and the deal getting closed at 110 cents (even though someone else then tried to enter the fray with 120 cents). I continue to believe that the Gordian knot at Condor Gold will be cut through before too long because of the large gap between the company's market cap and the intrinsic value of the firm's Nicaraguan gold assets"
The reason MC and JM have rejected low-ball offers (and thus prevented them from proceeding to binding offers) is because:
a.) Publicly, they want a higher binding offer from which future offers will compete with
b.) Just on the off-chance that there will be no other binding offers, they want the only binding offer to be at a level they are willing to accept.
We need that first binding offer to be announced. Once it has, if it is at a level that is below the current market value of the assets then other interested parties will be incentivised to submit offers up to that level before the deal goes through.
JHC this board has descended into total lunacy. Some person even said recently "deals are done based on short term movements in the gold price"?! We just had the highest monthly close EVER at $2071 and people here are finding reasons why it shouldn't be any kind of advantage. My god, peeps here really are broken. Just sell out, for the love of gold, sell out.
The entire gold junior market is in the toilet. Let me say that again THE ENTIRE GOLD JUNIOR MARKET IS IN THE TOILET. So yeah, keep attacking Condor management, makes perfect sense. THE GOLD PRICE IS AT ALL TIME HIGHS but western financialised markets only want to buy ETFs, FANG stocks and crypto, they couldn't care less about gold stocks. This is incredulous given everything that has happen over the past 10 years, but it is what it is. Volume is so low it's pointless looking at the share price, there is no price discovery here.
We have a PROVEN resource with an NPV of greater than $500 million at $2,000 gold. It really isn't that complicated. MC and JM are both out there trying to sell the assets for as much as they can get, what's wrong with that?! I get that some people would want them to build but that isn't necessarily a path to easy riches either, many builds overrun and encounter problems, they would rather not take that risk. Maybe in hindsight they should have but who knows, explorers typically prove up a resource and then sell it to a producer to build the mine. Gold stocks should be flying but these are not normal markets, maybe they never will be again as CBs have forever broken them by perverting incentives with their monetary policy.
JM will fund the company until they find a buyer for the assets, at the best price they can get. No one knows what they will be and it's really not worth speculating. Either sit and wait or sell out now like Johnnytaffia.
Capex, yep I shared a chart of the long term gold price on another bb recently:
https://postimg.cc/nCDKzZCW
Some things to note:
- The exponential growth of the money supply
- The gold price tends to lag the money supply growth, then catches up (1973, 1977, 2008) and overshoots sharply before correcting back down
- However in 2019, right when the gold price was about to do the same, money supply growth went vertical and the gold price was slammed multiple times to keep it under $2000 (5500% on the chart scale, yellow line). Gold has attempted to move above this line multiple times over the past few years but each time is hammered back under.
A break out of the gold price above money supply growth this time (as happened in the past) would be an immense rise and would have huge consequences for financial markets - I think that's why it was kept under $2k, and now they're desperately trying to reduce money supply but there's no way they can get it back down to trend without causing a depression and financial crisis, so it looks like the gold price has to shoot up. 2024 could well see that happen.
JT, subtlety not your thing? Ok I'll be a bit more direct - it's called a stalemate. Both parties aren't willing to transact given the other's expectations. Stalemates do not last, but no one knows how long they last for.
Anyways you're out so I guess good luck for the future.
So all in all, my view is this process is incredibly frustrating (trust me I know), but the best thing to do is to stop looking at the daily share price movements and wait for the process to play out. We have our chips placed, the dice are in the air, we are waiting for them to land so see how the game ends.