Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Here's a repeat of my guess:
I have had a go at using the Newcrest / Pretium deal to try to value Havieron. Obviously I am no mathematician. Feel free to contradict me.
Newcrest Pretium acquisition.
09.11.2021
Newcrest are spending $2.80bn US for 95%, so the 100 is valued about $2.95bn US.
Brucejack has an AISC $743 and is forecast to produce 311k oz pa over 13 years, which is a total of 4,043,000oz Au. The deal values each oz Au @ $730.
Havieron PFS suggests the AISC will be $643 and the area in the PFS will produce 160k oz pa over 9 years, which gives a total of 1,440,000oz Au. If we use the $730 oz Au figure on Hav that values Hav at $0.25 or £0.18, or £0.054 for GGP's share. It will actually be more than this, though, because of Havieron's lower AISC.
However, we know that we have 4.2m oz Au eq in the MRE. Applying the $730 oz Au figure to that values Hav at £0.55, or £0.165 for GGP's share. Double the MRE, which doesn't seem unreasonable, and you get £0.33. That is £0.039 per m oz Au eq.
Regis / Tropicana came out about £0.044 per m oz Au.
Multiply the average (£0.042) by 4.2m oz Au and we get £0.176.
10m oz Au eq would mean £0.42 and so-on. You can do the maths.
Obviously the Brucejack mine is up and running while Havieron isn't yet, but there is obviously a lot of room for our SP to climb. It may take a while, but it will definitely happen. You only need to look at the satellite to see that.
Using the £0.042 per m oz Au eq figure to value the 5% Newcrest can acquire (0.042 mulitplied by oz Au, divided by 6 to get 5% instead of 30%, multiplied by number of shares (4,206,000,000)).
4.2 m oz Au: £123,656,400.00
6.3 m oz Au: £185,484,600.00
7.4 m oz Au: £217,870,800.00
10.0 m oz Au: £294,420,000.00
15.0 m oz Au: £441,630,000.00
20.0m oz Au: £588,840,000.00
Berenberg 5% value at $220,000,000 / £165,000,000. Implies 5.5 m oz Au.
(Company value at 23.01.2022: £0.142 per share / £597,252,000.00 market cap.)
If we use these figure to value the 25% remaining, that gives these figures per fully diluted share:
4.2 m oz Au: £0.15
6.3 m oz Au: £0.22
7.4 m oz Au: £0.26
10.0 m oz Au: £0.35
15.0m oz Au: £0.53
20.0m oz Au: £0.70
Interesting times: looks to me as though at the current price we're sitting on the launchpad.
Q
I think the gulf between the 5% valuations - even if you halve various figures to be conservative - and the current market capitalisation shows there's a big rerate due. I would not be surprised if Newcrest bought the whole of GGP. It's much too cheap.
Q
I have now corrected this so that the Havieron PFS AISC is right. It is lower than I'd written down in my notes.
I have had a go at using the Newcrest / Pretium deal to try to value Havieron. Obviously I am no mathematician. Feel free to contradict me.
Newcrest Pretium acquisition.
09.11.2021
Newcrest are spending $2.80bn US for 95%, so the 100 is valued about $2.95bn US.
Brucejack has an AISC $743 and is forecast to produce 311k oz pa over 13 years, which is a total of 4,043,000oz Au. The deal values each oz Au @ $730.
Havieron PFS suggests the AISC will be $643 and the area in the PFS will produce 160k oz pa over 9 years, which gives a total of 1,440,000oz Au. If we use the $730 oz Au figure on Hav that values Hav at $0.25 or £0.18, or £0.054 for GGP's share. It will actually be more than this, though, because of Havieron's lower AISC.
However, we know that we have 4.2m oz Au eq in the MRE. Applying the $730 oz Au figure to that values Hav at £0.55, or £0.165 for GGP's share. Double the MRE, which doesn't seem unreasonable, and you get £0.33. That is £0.039 per m oz Au eq.
Regis / Tropicana came out about £0.044 per m oz Au.
Multiply the average (£0.042) by 4.2m oz Au and we get £0.176.
10m oz Au eq would mean £0.42 and so-on. You can do the maths.
Obviously the Brucejack mine is up and running while Havieron isn't yet, but there is obviously a lot of room for our SP to climb. It may take a while, but it will definitely happen. You only need to look at the satellite to see that.
Using the £0.042 per m oz Au eq figure to value the 5% Newcrest can acquire (0.042 mulitplied by oz Au, divided by 6 to get 5% instead of 30%, multiplied by number of shares (4,206,000,000)).
4.2 m oz Au: £123,656,400.00
6.3 m oz Au: £185,484,600.00
7.4 m oz Au: £217,870,800.00
10.0 m oz Au: £294,420,000.00
Berenberg 5% value at $220,000,000 / £165,000,000. Implies 5.5 m oz Au.
If we use these figure to value the 25% remaining, that gives these figures per fully diluted share:
4.2 m oz Au: £0.15
6.3 m oz Au: £0.22
7.4 m oz Au: £0.26
10.0 m oz Au: £0.35
15.0m oz Au: £0.53
20.0m oz Au: £0.70
Interesting times: looks to me as though at the current price we're sitting on the launchpad.
Q
O yes! I got that wrong before and never corrected it.
The time to go over it all again never seems to be available!
Q
I have added a bit at the bottom to my go at using the Newcrest / Pretium deal to try to value Havieron to show the possible effect on the share price of the assumed number of ounces in GGP / Newcrests discussions. Obviously I am no mathematician. Feel free to contradict me.
Newcrest Pretium acquisition.
09.11.2021
Newcrest are spending $2.80bn US for 95%, so the 100 is valued about $2.95bn US.
Brucejack has an AISC $743 and is forecast to produce 311k oz pa over 13 years, which is a total of 4,043,000oz Au. The deal values each oz Au @ $730.
Havieron PFS suggests the AISC will be $743 and the area in the PFS will produce 160k oz pa over 9 years, which gives a total of 1,440,000oz Au. If we use the $730 oz Au figure on Hav that values Hav at $0.25 or £0.18, or £0.054 for GGP's share.
However, we know that we have 4.2m oz Au eq in the MRE. Applying the $730 oz Au figure to that values Hav at £0.55, or £0.165 for GGP's share. Double the MRE, which doesn't seem unreasonable, and you get £0.33. That is £0.039 per m oz Au eq.
Regis / Tropicana came out about £0.044 per m oz Au.
Multiply the average (£0.042) by 4.2m oz Au and we get £0.176.
10m oz Au eq would mean £0.42 and so-on. You can do the maths.
Obviously the Brucejack mine is up and running while Havieron isn't yet, but there is obviously a lot of room for our SP to climb. It may take a while, but it will definitely happen. You only need to look at the satellite to see that.
Using the £0.042 per m oz Au eq figure to value the 5% Newcrest can acquire (0.042 mulitplied by oz Au, divided by 6 to get 5% instead of 30%, multiplied by number of shares (4,206,000,000)).
4.2 m oz Au: £123,656,400.00
6.3 m oz Au: £185,484,600.00
7.4 m oz Au: £217,870,800.00
10.0 m oz Au: £294,420,000.00
Berenberg 5% value at $220,000,000 / £165,000,000. Implies 5.5 m oz Au.
If we use these figure to value the 25% remaining, that gives these figures per fully diluted share:
4.2 m oz Au: £0.15
6.3 m oz Au: £0.22
7.4 m oz Au: £0.26
10.0 m oz Au: £0.35
15.0m oz Au: £0.53
20.0m oz Au: £0.70
Interesting times: looks to me as though at the current price we're sitting on the launchpad.
Q
I've filtered about 1,800 now.
The irrelevant, rude, uninformed, or troll goes straight in the bin. It keeps the board a calm and useful place for me.
Q
It's visible on today's image via Sentinel Hub.
The link below might work. It's a shame the radar is broken: it'd confirm it.
https://apps.sentinel-hub.com/eo-browser/?zoom=16&lat=-21.69803&lng=122.6365&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2Fbd86bcc0-f318-402b-a145-015f85b9427e&datasetId=S2L2A&fromTime=2022-01-20T00%3A00%3A00.000Z&toTime=2022-01-20T23%3A59%3A59.999Z&layerId=1_TRUE_COLOR
Is that a drill hole 225m SSE of the middle of our northern neighbours' three holes?
How exciting.
Q
Within four weeks we'll know whether GGP and Newcrest agree on the 5% valuation.
That's not long at all.
My guess is still £185,484,600.
Q
That's a shame. Those radar images were a big help in interpreting the daylight ones.
Q
I agree, Rome. It makes no sense at all to sell the remaining 25%.
Q
The average of your three figures, Starbright, is about $150. If they assume 10m oz that means 5% is worth $75,000,000.
If we take the average of the Regis / Tropicana and Pretium deals (which seem more relevant) that's about $195. The same 10m oz assumption at that value gives a 5% value of $97,500,000.
All interesting stuff.
Q
Are we missing a radar image? I was expecting one on the third.
Q
I hope you are right, Spades.
Of course it isn't a matter of them paying the current share price anyway. If there was a hint of a takeover instead of buying the 5% the price would go through the roof.
I think they'll pay a fair price as a result.
Q
The £588,840,000 would mean a 70p share price for the 25%, by the way.
Q
How have you arrived at £200,000,000?
There are plenty of figures being put forward. My guess of £185,484,600 based on an updated MRE of 6.3m oz is one I like, but then it looks like a big number and it's my guess, so I suppose I would.
However I am a bit uneasy, because my figure would put the remaining 25% at about 22p, which does not seem much.
Of course, taking into account tens of millions of ounces that are yet to be defined would change things, but how will that be done?
If I say they use a figure of 20m oz instead of 6.3m oz that would give £588,840,000. At that Newcrest might as well buy the whole of GGP.
These are my idle and not very conclusive thoughts as I wait to be fed.
Q
In short, Father Jack, I don't know. I might have time to think again about it tomorrow.
Q
I'll have another look.
:)
Q
Repeat of my go at using the Newcrest / Pretium deal to try to value Havieron. Obviously I am no mathematician. Feel free to contradict me.
Newcrest Pretium acquisition.
09.11.2021
Newcrest are spending $2.80bn US for 95%, so the 100 is valued about $2.95bn US.
Brucejack has an AISC $743 and is forecast to produce 311k oz pa over 13 years, which is a total of 4,043,000oz Au. The deal values each oz Au @ $730.
Havieron PFS suggests the AISC will be $743 and the area in the PFS will produce 160k oz pa over 9 years, which gives a total of 1,440,000oz Au. If we use the $730 oz Au figure on Hav that values Hav at $0.25 or £0.18, or £0.054 for GGP's share.
However, we know that we have 4.2m oz Au eq in the MRE. Applying the $730 oz Au figure to that values Hav at £0.55, or £0.165 for GGP's share. Double the MRE, which doesn't seem unreasonable, and you get £0.33. That is £0.039 per m oz Au eq.
Regis / Tropicana came out about £0.044 per m oz Au.
Multiply the average (£0.042) by 4.2m oz Au and we get £0.176.
10m oz Au eq would mean £0.42 and so-on. You can do the maths.
Obviously the Brucejack mine is up and running while Havieron isn't yet, but there is obviously a lot of room for our SP to climb. It may take a while, but it will definitely happen. You only need to look at the satellite to see that.
Using the £0.042 per m oz Au eq figure to value the 5% Newcrest can acquire (0.042 mulitplied by oz Au, divided by 6 to get 5% instead of 30%, multiplied by number of shares (4,206,000,000)).
4.2 m oz Au: £123,656,400.00
6.3 m oz Au: £185,484,600.00
7.4 m oz Au: £217,870,800.00
10.0 m oz Au: £294,420,000.00
Berenberg 5% value at $220,000,000 / £165,000,000. Implies 5.5 m oz Au.
Q
The 5% agreement might come before February: GGP said they would aim to agree by mid February. The next lot if exploaration results come in the middle of January, so why not announce the updated MRE and the 5% then?
Q