Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
In the very short term, the price can come back. In the longer term, think the gold price is heading upwards.
The article makes clear one of the principal concerns is the level of debt in the world, including that of governments, including that of the Federal government.
The Truss government showed the markets how instantaneously confidence in a government's ability to manage its debt can change to alarm and panic.
The traditional response of governments to debt which has become unmanageable is to inflate and thereby debase the currency. Hence a key attraction of gold.
Https://www.kitco.com/news/article/2024-04-05/gold-rally-just-getting-started
Where might they be looking for growth opportunities?
From 12:23:
"We will play to our strengths. We know that we can run mature assets well. We have a lot of experience in field rehabilitation and mature field management, ..."
From about 05:41, re Saltfleetby reserves:
" ... sub-surface evaluation shows that there could be quite significant upside (to reserves) which sits in other reservoir levels (than that of the principal level) within the field ... so this could provide us with some really substantial reserves upside in the future".
from 07:41:
"... we're in a position to move forwards with looking at new projects".
from 08:17:
management wants to "take the company to the next level in terms of the assets it has and really put it on a path to growth".
Deltavegatheta,
I can see the upside potential but whether this is realised will require one or two things to go UKOG's way including, for example, a (largely) favourable judgement in the Supreme court case and discussions with major players concerning Portland to begin to bear fruit.
Management wants to "take the company to the next level".
Hopes to have Brockham in production in late May/early June.
Stresses that Angus has a very strong team.
Looking at opportunities outside of the UK, in North America and in North Africa (no mention of Europe in this interview).
Very basically, UKOG is not valued by the market as a going concern, hence a market cap of about £2m in the place of net book assets of £40.852m.
Has the market got it right? Or will one or more developments take place prompting the market to revise its opinion?
Deltavegatheta,
UKOG's annual report has been qualified by the auditors for a number of years, I think. Nobody can miss this year's qualification plus the comments made by management themselves.
But, while the going concern basis is retained, it remains the case that net book assets are about 20 times the current market cap so, should something significant go UKOG's way for a change, the upside potential is obvious.
A discount to net book assets for a company with a viable future might be, say, 50%.
UKOG's discount to net book assets is currently about 95%.
Should a significant development help to restore investors' belief in UKOG's future, then the potential for a 10-bagger is there.
That was quite a big reservation in the annual report (see note 2.b) so all have been warned that UKOG is "speculative".
While it is treated as a going concern, the book net assets remain there, at £40.852m, which is nearly 20 times the current market cap of £2.1m.
The story hasn't changed: any positive news from whatever source could see this share price shoot up.
Coming back a bit currently:
https://www.kitco.com/charts/gold
"Britain's domestic energy production falls to lowest level on record".
"The amount of energy produced domestically in Britain has fallen to its lowest level on record, increasing the country's dependency on imports from Norway, the US and other overseas sources".
Cites figures from the Department for Energy Security and Net Zero.
"Britain imported a net 41.1% of its energy last year, up from 37.3% in 2022, ..."
"... gas remains the country's largest single energy source, accounting for 34.3% of Britain's energy generation".
If previous placings with this and other stocks are a reliable guide, the big volume is traded on the day of the announcement.
We now have "exceptionally high gold grades" confirmed at Level 4 (RNS of 26/03), the expected placing announced (what was unknown in advance was the exact timing and terms) and the spot gold price providing a very positive market context.
All the best to those invested, or contemplating investing, in Alba.