Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
IMO the problem we have is the gold equity space is currently in the dogs, despite gold being at all time highs - utterly crazy!! That is a sign to me that financial markets are basically broken these days, there is very little liquidity unless you're on a major index so then what value does market cap really have? Compare Condor's chart to other AIM-listed gold juniors such as OMI, RRR, CORA, etc, and they are nearly identical. So whilst we moan about Condor's management these other companies have seen pretty identical stock movement - so is that a reflection of management decisions/sales process/etc or wider market sentiment towards AIM-listed junior gold equities? I would guess the latter.
So what does that mean for us here?
I think it means that Condor's market cap is not a true reflection of the value of the assets, but with management looking to sell the assets, in effect what they are trying to do is to "create a market" for our assets in order to enable price discovery (just like when you're selling property). That means talking to all the interested parties to get an idea of what they're willing to pay. But, no one wants to pay more than they have to, so they say "look at your market cap, it's £26m so we'll offer that plus 10%". To which management say "Are you crazy?! Our NPV is $500m+ at the current gold price!!". To which the interested party responds "then why doesn't your market cap reflect this?", and so on.
I believe that's where we are currently and have been for the past 6 months (post site visits/due diligence/etc). However, I think the advantage that Condor has over the other gold juniors is that the sales process will become it's own market, once the first binding offer goes public. Then it becomes more like an auction, interested parties seeing others bidding don't want to let a good opportunity pass, so they throw in their hat and the price goes higher. No one knows in advance what that final price would be, it's all academic until the bidding starts.
Right now we are waiting for that first real bid, I think JM/MC are reluctant to accept a low binding offer as they may worry that they will give away these valuable assets that they have worked hard to develop on the cheap. Personally, I say trust the market, not the stock market but the "real" market. Start the bidding and let the "auction" occur publicly, then we will find our what the assets are worth, as they will sell for whatever they are worth, no more and no less.
The only other thing I can think of is that JM is convinced that the gold price is set to take off, and is holding back from accepting the first binding offer until 2024 when investment attention may turn back towards gold equities, giving all a big lift. Otherwise, why bother waiting? He has committed to funding the project for as long as necessary and the company is running as lean as possible to minimise opex, so we are not going broke...
simms mc stated in the last interview that they've had a few "low ball" offers that were rejected outright. clearly there is interest in the assets, the trick is to get the maximum offer possible given the current market. now, we have a silly situation where the gold price is at all time highs in most currencies (and very close to ath in the us dollar), but gold equities are dog **** right now, no one is interested and despite a slight (short term) improvement back in 2020/2021, it's been that way since 2012.
condor management need to sell the assets based on nav, not on market cap, which is what they are currently working hard to do. we will see how successful they end up being, but there is no doubt that at $2000/oz, the nav of the company is ridiculously higher than the market cap it's not even funny. this is probably true of most junior gold equities right now, but not many of them are proven up, permitted, construction ready and currently for sale.
my personal view is that they need to make a binding offer public, even if it's lower that they'd hoped. once that is public then the clock starts ticking for any other interested party to make competing bids (of which we know there are a few), and through that process we'll get some price discovery as to what the assets are really worth. i think management are holding out (or trying to encourage) a higher starting binding offer, but i think they'd do better to just let the process play out in public. if the assets are truly worth more then the offers will roll in up to that level.
Did seem like a long shot given Condor were negotiating a toll milling deal with Calibre senior management back in Dec 2021, even got so far as to present them with a formal proposal which obviously was not accepted. No idea why, seemed like a win-win at the time.
Ah well, good news that M&A continues apace in the mining sector.
BenBen88 did you not watch Mark's last presentation? He confirmed that permits are not an issue since as far as the gov is concerned, construction has started. Environmental permits will be renewed as and when, not a concern.
Simms, I think the deal is a close as it's going to get until one party or the other moves on price. I believe due diligence has been done by various interested parties and no issues have arisen, but that they are currently only willing to put forward a bid that MC/JM are not (currently) willing to accept. So we're currently in a bit of a stalemate.
However, that can change at *any* moment. Either a potential buyer ups their bid to a level MC/JM is comfortable to accept, or MC/JM decide to greenlight the current highest bid. Either way, once the first binding offer is made public that's when interested parties will throw their hat into the ring and we'll discover how much the assets are really worth.
No one knows how much time it will take, we just need to be patient.
Https://www.ft.com/content/067206be-0e43-40cb-9712-fb7758355950
And just to add, when Chestertons estate agents are being bought out for "around £100m" despite property sales collapsing yet Condor with $400m+ NPV @ $1700/oz gold price (let alone at $2000!) is lingering at around £25m market cap, it makes you sick to your stomach! You can't blame MC and JM getting frustrated with the lack of higher offers.
The years of ZIRP have completely distorted markets, and it will take time (and a lot of pain) for the ship to right itself. Whatever happens though, gold is a safe bet, and I for one expect that interested parties value Condor's assets much higher than the market suggests. The trick (as Ive said) is for JM and MC to get interested parties to stump up.
Simms, I expect JM has his own time schedule that he will not make known. IMO he will sell as was always the plan, there is no real appetite to become miners here, and accept the ongoing risks that comes with it. I think there is a lot of interest, but the offers so far have been sub par. Can't blame them, if they think they can get away with buying on the cheap then they won't overpay unless they have to. JM is also not stupid, he knows he can't hold the resource indefinitely at risk of losing support of the locals - and the government, and the asset losing all value. He will strike the balance, perhaps he's giving it until all his outstanding warrants/options to be exercised and then they will accept the highest offer. Remember, they can also see the current geopolitical situation and that gold has caught a bid, which *should* at some point soon mean miners also start to see increased investment interest which would work very well in condor's favour.
Once an offer has been made public then the real action should begin, as other interested parties put their cards on the table and make their counter offers. Then and only then will we find out the market value of the assets.
Personally, I think there is zero chance of JM taking the company public. Both him and MC have worked on this company for over a decade, they know the value here but also that it's time to exit. The trick now is to get the best price which they are both incentivised to do, we need to be patient as difficult as that is.
Slippery, no one is thinking of investing in Condor, because no one is thinking of investing in mining. At least, that's according to Larry Fink:
https://www.telegraph.co.uk/business/2023/10/30/investor-disdain-mining-threatening-net-zero-blackrock/
But don't tell anyone here, because they think it's all Condor's management's fault that the share price is so low. Don't get me wrong, no doubt they ultimately are responsible, but if there is zero appetite for investment in the sector then they don't exactly have much of a chance do they?
Let's get that first binding offer agreed and see who else is interested in making a counter offer. No doubt once the deal is signed and sealed the mining sector will suddenly roar back to life for the greatest bull market ever!!
DDD don't lose heart. I suspect that MC and JM could sell the assets now if they were willing to entertain a lower binding offer, and I suspect there would be no shortage of bidders given the quality of the assets and the strength of the gold price, as you point out. There are negotiations ongoing, we just need to get to the point where both parties are willing to deal.
I think JM/MC want a higher initial binding offer, but that once the first bid is made public it will trigger other offers up to the true current market value of the assets (whatever that is, no one really knows for sure). My suspicion is that MC and JM have not greenlit an offer as yet because they don't need to, not because there is no interest. This will not last forever, and the assets will sell. A bit more patience required here.
What "delay"?! You don't seem to grasp that two parties making a deal has no fixed time limit, it's a process that goes until until either a deal is agreed or one (or both) walks away. Why is that so hard to comprehend?
I don't think I'm a business expert at all, but I work in a business alongside sales people doing deals with the major investment banks and some of those deals can go on for 6 months+, even over a year, and we are talking about deals worth fractions of the NPV of Condor's assets, not to mention they are also FAR less complex in their detail.
And stating "nothing is happening" is blatantly untrue isn't it?
You're frustrated I get it, we all are. But as I said before, securing a deal will take as long as it takes.
What kind of an idiot puts a deadline on trying to secure a $100 MILLION+ deal?! A PI with no actual real world experience (in anything it seems), that's who.
In my company we do £100k+ to £5M deals and though I don't work in sales, I know exactly what our clients AND our sales people would do if you told them to force a client into a time period or we walk away. It would sound something like F*** OFF.
Securing a binding offer will take as long as it takes, so DEAL with it (har har).
So Seingred, Condor is your largest holding despite the constant negativity?! Wow. It would be kind to say that's a bit disingeuous. Others have accused you on more than one occasion of de-ramping to which you strenuously object, yet you admit you've managed to build yourself a sizeable position. I suppose it does help to get the old average lower when other PIs get nervous and decide to dump their shares, no harm in encouraging them to do so whilst you pick up their shares behind the scenes right? I mean, personally I think that's pretty scummy behaviour, but I guess it's not illegal.
And why do you keep bringing up my wife? Are you some kind of creep as well? On second thought, don't bother answering that, I know the answer.
Yep, more than happy to disconnect.
Connect1 if he'd have said "I'd rather not say" I would have left it, but he asked me my average and I gave it. Why can't he reciprocate, what's the big secret? Instead he resorts to insults.
He says he's in here for "30-40k", well that's a fair chunk of change given such a negative view on the company. We all know Gold Exploration is high risk, it doesn't take a genius investor to figure this out! Most explorers don't even mange to prove up a resource and turn it into reserves.
He just comes across as an attention seeking bottom feeder, but that's just my opinion.
Seingred, you are nothing but a desperate attention seeker. No one got personal with you but you go straight there, like the pathetic little weasel you are.
No one else on this board desperately (and constantly) communicates how "great" a trader they are (thinking anyone actually gives a **** - classic narcissistic behaviour) their average without the all important total holding number, yet when called out you deflect and like a snake try to shift the focus.
And when you are called out, in desperation you asked me my average which I gave you, and yet you still try to deflect. Now, tell us the total shares you are holding or quite simply **** off.
Https://www.telegraph.co.uk/money/investing/gold-key-insurance-policy-against-central-banks-mistakes/
Yikes, Shanta just got plugged by Questor! Sell Mortimer Sell! But seriously:
"Nevertheless, small mining companies are not suitable for everyone, not least because things can and do go wrong."
Don't be silly, according to many of the posters here, running a junior gold explorer is a piece of p***!! Yet here are all these junior gold mining CEOs scrambling around trying to create shareholder value, and for the most part failing, they just must all be incompetent! Turf them out and get one of the posters here to run the show, instant profit!
/sarcasm