Member Info for pv72

Why is it that every time I see a post from Mr Bean, I'm left thinking of this.... https://m.youtube.com/watch?v=flzkt_1VPQc

Boring, tiresome troll. No more, no less. I hope he derives a huge amount of job satisfaction from his chosen career.

Been a bit distracted last few days with the goings on at GGP but still waiting with baited breath on the outcome here.

GLA

@unimaginative

Lol, you are down t'road from where I grew up.....I was bd15, allerton. I used to go to a dentist in clayton many moons ago!

@bfdinvestor

appreciate your thoughts.

yes i have assumed both tel and hav will contribute to the bottom line together. ggp will i'm sure find other sources at tel and keep it going for as long as they can.

and yes i have only considered aisc costs. i'm having to assume that decommissioning is still some years away. otherwise the purchase of tel doesnt make much sense commercially.

i have tried to be very conservative for all my other assumptions.

thanks!

ps is bfd short for bradford in your moniker....if so i'm a bratfud lad originally but lives down sarf now with ****ney sounding kids 👍

Hi all

I wasnt a million miles away with my 5p raise guess but the gift of 2.67bn shares to NEM does leave me feeling a bit shafted, as I'm sure we all do.

Regardless of our emotional state, we now need to objectively re-evaluate the investment thesis as it has all completely changed now.

I'm basically trying to work out future value and am sharing my thoughts so that others can comment if I'm barking mad or not....

The RNS has given us a few clues I think.....

Firstly, TEL is believed to be a 426koz operation over 15 months, although ggp will work hard to find other sources....this equates to about 28.4koz per month or 340koz per year. This could yield us c£270m per year. I've assume gold price around £1900 per oz and used AISCs provided in RNS.

Secondly we already know that HAV will give us 258koz per year which could earn us c£330m per year.

Combining those gives us c£600m. Applying a PER of 6 to 8, will give us a MC of between £3.6 & 4.8bn. That equates to an SP of between 27.5p and 36.6p with the new enlarged share capital.

Based on that, I'm not convinced we'll see ATH for a year or 2 yet. But other things may come good such as other finds, processing toll fees, acquisitions etc.

But any profitable business churning out £600m per year does offer good divi prospects which could mean divis of a few pence in time.

I've assumed there are no surprises in terms of further raises to pay for pre production capex. My thoughts are that this will be covered by the fact that they will have raised an additional £100m from the new shares after paying NEM their whack. The remaining £300m odd could be covered by the current stockpile at TEL and monetizing the TEL asset as per current plan. there is also the agreed debt arrangement with the banks to draw on if required.

Thoughts welcome....

Thanks and GLA

Noone appears to know for sure how much is stockpiled at telfer. But we do know from the RNS that the operation is worth 426koz over 15 months.

It is possibly worth suggesting that that works out at 28.4koz per month and we could have 9 months' worth stashed there totalling 255.6koz?

That's still a fair whack worth around £200m....if I'm accurate with the guestimate....

@starbright

Yes, you are right. I have assumed zero value for TEL but would expect it to be cash generative and wipe it's own proverbial bottom so to speak. I have merely done a very rough and conservative calculation to illustrate what I think should happen.

You strike me as a seasoned investor. If so, why would you expect the market to ascribe any total valuation to be based on the price paid to NEM?

If I sold you a house worth £250k in the general market for only £100k, the house would still be worth £250k, would it not?

I see the 2 prices as disconnected. The sp will be an indication of sentiment ascribed by the market for enterprise value. In my view this will far exceed my initial calculation in the medium to long term.

@loftmonkey

Sorry but had to reread your post a couple of times to understand what you were saying. Any deal would be dependent on the remedial works being made good according to the RNS, so I dont really share your concerns .

@RMR

Anyone's guess re timing. Negotiations need to conclude with NEM and cash needs raising. Weeks rather than days, although they may announce terms of any deal before cash is raised.....

Good luck to all. Been a long time coming for me being here since summer 2018.

Whilst I appreciate there are lots of moving parts to any potential deal, I just cant see this re-opening down on where we are now.

Being really conservative, raising £250m at say 5p will need 5bn new shares. That will roughly double the share float to 10bn shares.

Our market cap is currently £360m based on 30% of HAV. Owning 100% should yield us a £1.2b m/c. That will give us a 12p sp on an enlarged share float.

Gotta be a win for us, surely?

Cybertron

I did share some numbers a week or 2 ago with some v conservative assumptions and showed my workings. They were commented on by other respected posters.

Feel free to review those and post your own workings out.

You will find that 60p probably isnt that outlandish for a target based on 50mmfcgpd....I'm sure madman rob will have based his conclusion on some robust calculations.

None of us know what value the market will ascribe either on success or failure. We base our investment decisions on our own calculations of potential value and we size our bets accordingly with an eye on our risk appetite and the risk/reward profile.

Good luck whatever you choose to do

Pv72

Whilst we wait for news, any one else enjoy the classic Get Carter on tv last night? Michael Caine was immense......a mere coincidence not lost on many folk here.......let's hope the next RNS is equally so.

GLA

Dear Mr Bean

Keithoz kindly posted a detailed message explaining exactly what it entails to flow test some 17 or so horizons on 27 August @ 859hrs.

Would you care to read that and come back to us with good reasons why testing should have been done by now?

Needless to say I dont agree with your statement and I doubt many others do either.

Have a great day

5 weeks or less....who cares?

I've been waiting 4+ years. Another few weeks hardly matters.

The results will come when they're ready. And no amount of hand wringing on here will make the blindest bit of difference.

Go outside and take in some fresh air if you're going stir crazy. it's good for your mental health, you know.

GLA

Quality insight as ever, BRV!

To be honest I hadn't thought about justifying the minimum commercially viable flow rate and just bought PGs 1-3 mmcfgpd at face value. Very helpful thanks.

BTW I love those odds too!

take care and GLA 👍

Thanks again

Appreciate your measured critique, BRV. Thank you.

If we extrapolate PRDs own number of £122m pa and revise that downwards to reflect that 1mcf is now worth $10 and not $16 then we get £76.25m pa.

10yr NPV of £294m at 10% and £245m at 12% discount. They equate to a range of c4 to 5x current SP.

Applying PER of 5 to that gives you a MC of £381.25m. Still c6x current SP.

And that is as you say, deeply conservative provided that SJ comes good and yields 50mcf per day.

There is more potential upside not considered as you say.

The risk/reward still works for me.

GLA

@olderandwiser......they are very rough gross figures and you will need to take off ohnyms share but the point stands that potential for multibag is still there

@canalet....yes thanks for pointing out Latin M but thankfully I based my calcs on mcf and not bcf!

@ibiza....IJWT has hopefully covered off your point. Just to add, in my view, costs are not that excessive and dilution risk is low provided we get good flow rates from current testing underway. I guess much depends on your own risk appetite and your personal view of the risk/reward profile for this share.

If others wish to dissect the analysis then feel free. I dont profess to be the font of all knowledge, just a reasonably savvy old PI who has had some wins and some losses to his name over the last 12 yrs or so in this game.

The only reason for offering this on the board is to counter trolls and highlight potential upside. I accept there are downside risks but have sized my bet accordingly. I trust everyone else is similarly responsible.

I also note that no trolls ever seem to objectively critique any upside cases on here. They only focus on the negatives. Says more about them than the many of us here who look at both sides of the argument in a balanced way.

GLA

Just building on IJWTs quick calculation....

50m cfpd equates to 18.25bcf per year.

Let's say each mcf can earn $9.50 to be conservative or £7.32....then potential earnings are £173.16m per year.

Apply 10yr discount at 10% per year gives you £667m value....this is circa 12x current SP

Apply 10yr discount at 12% per year gives you £557m value....this is circa 10x current SP

Let's also say PRD go it alone and dont want to farm anyone else in...let's apply a PER of 8 to £173m per year, which gives us £1.385b market cap.....that's over 24 times current SP.

That's not including high case scenarios of 500mcfpd, mou5 etc....

I also expect a significant rerate on positive news.

I'm sitting and waiting patiently.

Risk/reward works for me.

GLA

Lol aimhigher

I'm hoping it's a case of great minds thinking alike....I also promised my top up last summer would be it but couldn't resist another 22.5k shares earlier on Monday.

That is definitely it though.....whatever will be will be.

I did my own research and am happy with my position size and risk/reward assessment.

Thanks to all respected posters on here with their helpful insights. You know who you are. I'm forever grateful for your generosity.

GLA

No, Jins.

You are not alone in that view. I'm there with you! Lol

On a more serious note and I'm going to stick my neck out here......i reckon this will get taken out for around 3bn USD at some point to over the next 1-2 yrs......equiv SP around 55p.

If things go well and business really takes off, then s2020 may get his dream and we could see £1+, but currently that looks like a low probability event to me.

Good to see a possible longer term reversal in trend becoming evident here now....about time too....and all built on business performance metrics too by the looks of it.

GLA

Well, he has indeed gone up in my estimation now. Thanks for sharing that SH! 🤣🤣🤣

Hi Nigel

out of macabre curiosity I unblocked you to see what you posted. I needn't have bothered.

All I will say is this.....if a bookie offered me a payout of over 50-1 for what is according to you a 7-1 bet, then I'd probably take it. I have placed my bet size accordingly and am awaiting the outcome.

You're now back in the bin BTW

Have a lovely day