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Completely agree Welsh Falcon. My view was completley dependent upon an agreed upon valuation which satisfied both NCM and GGP. Like your thoughts on protections in case of increase, but would these go both ways?? AS you say, a deal will only be made if the two parties could agree.
Regards
RA
Have to admit that this is the part of the GGP Business Strategy which most interests me. ie. What does GH/CB do when and if they are offered cash by NCM for the remaining 25% of Havieron?
My personal view is that they consider GGP as an exploration company and its value/ethos/raison d'etre is in the gamble of discovering new sources of gold and other precious metals.
Therefore,
1. Do some sums to calculate the annual burn rate of the company to investigate their other tenements in a controlled manner and sensible pace.
2. Retain as much of the Hav JV (say 5%) solely to fund the annual costs of GGP in the future in order to avoid cash calls from shareholders.
3. Take the offer of cash for the remainder and distribute to shareholders through special dividend.
4. Carry on prospecting on other tenements.
5. Rinse and repeat.
Any shareholders who want regular income can then take that dividend and invest in a company which does deliver regular dividends (eg NCM). Shareholders who like the excitement provided from an exploration company can reinvest in further GGP shares.
This approach enables shareholders the ability to decide what to do with the windfall from Hav but also retain their interest in GGP as they prospect elsewhere with little risk of further cash calls. GGP retains its excitement, its small size and agility. If they make another find, then they simply rinse and repeat.
Just my thinking.
Regards and ATB
RA
With all of these other companies initiating exploratory digs around Havieron, I am now wondering what impact they might have on GGP should they have a positive find.
Would we see GGP SP increase due to "nearology" and the fact that we still have many more targets on our radar?
Or, would we see GGP SP going down because the pressure on NCM to progress with Hav may be reduced in the light of more accessible ore to feed Telfer.. Thoughts??
ATB and GLA
RA
Martyn7. Risk were debated on here some weeks ago and bottlerocket has captured the essence of the discussion on the ggphelp site (just add .co.uk).under the private investor finding tab and Rational Awareness sub tab.
Good luck.
RA
Schlemiel. You say that it is a contractual obligation that NCM buy 5% at fmv. This is not strictly true. NCM has an opportunity to buy 5% at fmv at the successful completion of phase 4 of jv, that does not mean that they will take up the option. Not wanting to be negative but wanted to make sure facts were accurate. Gh has already said that if he needs further funding, he would not intend to dilute further but believes he would be able to get commeecial loans.
ATB and GLA
RA
LIke many on this BB, I find myself amazed that GGP retains such a low share price. Like many, I've done my research and can cite many arguments why it should be greater:
1. Back of fag packet calcs of MRE for Hav in the light of results a couple of weeks ago would suggest a share price much greater than it was 4 weeks ago, which in itself was considered low.
2. Risk against Havieron is decreasing significantly by the day.
3. Price of gold has increased substantially and there must be a medium correlation between POG and GGP SP. All the so called "experts" are predicting POG to continue increasing.
4. We're about to start exploring in earnest in Scallywag with 4 prime targets. If CB and GH have identified "the formula", these promise to be significant finds.
5. We've just "won" the licence for Rudall which promises similar geology to Hav.
6. We have a competent BoD who have significant interest in getting that share price up.
7. In Panorama, we have the potential for significant Gold and Cobalt.
8. We have other tenements which could also prove significant finds including Ernest Giles, Firetower, Bromus and Warrentinna.
9. Other stocks associated with Gold appear to all doing well.
I'm sure I haven't listed all the positives. So we all ask ourselves what is there not to like about GGP and why aren't more folks investing and driving up the SP?
So what holds the price down (apart from MushroomKid's elastic band).
1. Current broker's price has been met so folks feel that there is nowhere further to go. Broker's note needs updating.
2. The significant increase in the past 6 months has accommodated all of the possible increase.
3. There are other opportunities out there which will pay back more and quicker!!!!!
4. This exploration company has a market cap north of £500M and it can't get that much bigger.
5. There is still risk associated with Havieron - share price would crash.
6. SIgnificant Institutional Investment has not yet been made - see point 1.
7. We don't yet know how large Havieron is 1million oz or 20 million oz. Current Broker has around 4.4M I believe.
8. GBP to $ exchange rate increase has negated some of the Gold price increase.
9. Warrants being released to the market providing supply of shares.
10. Involvement of day-traders creating wild swings and scaring off LTHs
11. Market makers are keeping the price low.
FWIW, I'm bullish on GGP and reckon that the positives in the first list will far outweigh the negatives and am following Paddy's advice and sitting on my hands. I'm convinced that the negative reasons above are either completely incorrect or have a finite life and we shall see GGP get to its potential as each of these "reasons" is retired.
Roll on MRE, Scallywag exploration, completion of phase 4, decision to mine, Broker's note, exploration of other tenements.
Apologies to those who don't like "essays" but I felt that it was needed to try to identify what is keeping the price d
@Paddy If the artemis find is 2km north of Hav and straddles into our tenement. I suspect that it will be within the 12 blocks covered by the JV. If so, then only partly ours. The mining activity in and around the Hav area could get quite interesting with multiple parties involved. Am I correct regarding coverage of JV?
Regards
RA
WilliamLaw - I agree with the mjority of your post but I do have some doubts about a "buyout" of GGP. The suggestion is made quite regularly on this board and I've yet to see how it might be achieved. I belive that there are two routes to buying out a company.
1. those who are buying out have to own over 50% of shares in circulation. Once they have (I think) 3% of shares, they must declare that fact to the market. That very declaration will immediately push the share price up and the ability of the buyer to get to 50% becomes very expensive. I'm not convinced that any of the majors would look to take a very expensive "punt" on GGP, although us PIs will all sell out at our various levels and would probably do quite nicely. At the moment, (my) fair value for my shares is significantly higher than the current SP and I suspect that this is the case for quite a few of the shareholder community.
2. The buyer presents a "deal" to the BoD (ie we'll buy your company for £XXXX). The BoD will be required to present the offer to the shareholder community and will do so with a recommendation as to whether they feel it is a good or a bad deal. In this scnario, GH and his BoD will have to determine what they think is fair market value whilst recognising there is still quite a bit of risk on our other tenements - almost to the point that they have no value. This is why Scally needs to be dug and we need to become at least a two trick pony. All the same, I suspect that GH's view of FMV at present would still be some way north of current SP so it would take a significant offer for the BoD to recommend acceptance. Again, I'm not convinced that any of the majors would want to take the fairly expensive "punt".
Which route for takeover would you reckon is more likely? by whom? and at what SP? I'm struggling at present to answer any of these questions.
Regards & ATB
RA
HopefullyGold - Not sure that you should be too harsh on yourself. The definition is misleading "EMS or exchange market size is the minimum number of shares that a market maker is obliged to quote a firm two way price on the trading system"
This would suggest that a market maker is obliged to quote for a quantity of shares which is greater than the minimum.
In my view, bad use of language.
Might be better phrased as "the quantity of shares under which a market maker is obliged to quote a firm two way price on the trading system"
I'm sure that I'll get the grammar/thesaurus/english geeks coming after me for posting this.
ATB
RA
TmT - Good point and well made. All relies on the original assumption of £2Bn and that NCM decide to take the 5% option. Even if not, I suspect that you're second point applies, ie we should be in a much better position to secure debt financing.
ATB
RA
Thanks all for the comments on this thread where we were looking at the various options available to GH with regard to Havieron moving forward.
In addition to the main question, we have also meandered into the realms of Havieron and tenement ownership but we appear to have assured ourselves that the various transfers of ownership have simply been made to enable the various licences to be applied for an approved in the most expeditious manner. Neither NCM or GGP are expected to either gain or lose from these machinations.
Back to the original question though. The inital responses would suggest that folks are not keen to call the way ahead and would rather wait for both the MRE and (more importantly) initial reults from Scally. The feeling was that both GH and SB would not want to make a move in this area until more info was available. If this thinking is correct, then we're unlikely to see significant bid movement regarding Havieron until MRE or Scally results. We will, of course see some movement as NCM make their annual report and as we receive the regular exploratory results each 6 weeks. I'm guessing that MRE or Scally results could drop in the form of an RNS at any point - the longer it takes, the higher the probability each morning.
There was a lot of support for JJMack's post where he suggested we should retain at least 25% of Hav and wait for income but also prove up Scally to a point better than we did for Hav. This would then allow us to JV again but at a (possibly significant) different ratio to that which we have at Hav - ie 75-25.
From my perspective, I think that JJMack is in the right ballpark as I'm not convinced that NCM will necessarily want to invest in securing the last 25% of Hav. My concern then turns to the capital demands both Hav decline and Scally exploration would have on GGP. I know that GH has indicated that he can secure loans without loss of equity but what would be the overall cost of capital for the two projects? Open question and not expecting any responses, just trying to identify how things might play out in the future.....all looking positive at present and I have faith that GH has the necessary bases covered.
ATB and GLA.
RA
OK, let's move on a few months/years and assume that the MRE and PFS has been completed, an independent valuation of Havieron has been completed and calculated that, as a whole, Hav is worth £2Bn. NCM has decide to take up the option of the additional 5% and paid £100M to GGP and now owns 75%. NCM wants to negotiate with GGP for the final 25%.
What does GH do?
1. Does he push back and decide to retain the 25% and wait for the income stream 3-4 years downline and continue exploring the remaining tenements with a larger cash pot.
2. Does he try to negotiate a higher than £500M valuation for the remaining 25% on the basis that the remaining 25% is worth more to NCM, the risk being that negotiations falter and relations with NCM turn sour.
2a. If he decides to sell the remaining 25%, what does he do with the money? Retain a certain amount to fund exporation of other tenements whilst distributing the remainder by means of a special dividend.
Not wanting to debate the valuation of Havieron as that is a completely different discussion just trying to gauge the feelings on what should be done once Hav is confirmed as having a "significant value".
Bit of fun to debate on a balmy Saturday evening.
Regards
RA
Am I right in thinking that if MMs park the price at the end of the day at 15.2, then they only have to reduce price to 14.45 to catch the 5% stop lossers and down to 13.7 to catch the 10% club. Was the close price yesterday evening just a ploy for MMs to get more stock at low risk. Can you set sliding stop losses which adjust themselves as the sp changes upwards - methinks yes. Just a thought on why the ridiculaous close price yesterday.
Regards & ATN
RA
Hi Hopefullygold. I am also not trying to score points, just trying to get to the facts. Looking through the latest report from NCM, I understand that the current drilling is not RC drilling but diamond core drilling. This type of drilling surely takes some time to retrive the cores, then have them assayed and then to compile results into a report for publication in the next 6 weekly update. Perhaps PaddyGal could assure us that results are being presented in line with the timing of drilling commencement and that there is no need for concern over "hiding" or "retaining" drill results from the reports.
ATB
RA
HopefullyGold - I suspect that it is me that is being dim but I don't understand the point you are making in your last post. Are you saying that there are some drill holes that we would have expected to have been reported but that we have seen nothing - could it be that there was nothing to report.
RA
thelearner - Fully agree with your post, I was trying to say the same in response to taverham's original post where he was concerned that NCM would keep results away from GGP. Your post covers the subject better than mine.
Hopefullygold - Not sure I get your point, please see my note above to thelearner. There is clearly an amount of time between starting a drill hole and getting the assay results in a condition that they can be reported to the market. I was saying to taverham that it is this delay between drill start and report that has led to some of the drill holes not yet being reported or outstanding.
That is unless we're all getting confused over the term outstanding. Could mean exceptional/wonderful or it could mean not yet reported.
Enough from me.
RA
The reason there are outstanding results is that we know from Paddy Gall's analyses that many drill holes have been made for which we still don't have the results. This is because once the cores have been drilled, they need to be assayed, there is a delay between starting each drill hole and getting all of the results assayed for the record. Outstadning (in progress) not being hidden.
RA
Taverham. I'm not sure that they (NCM) can retain any of the drilling data as that belongs to the JV - not NCM. GH, as CEO of GGP will have a place on the board of the JV and will therefore have access to the drilling results. All IMHO.
Regards
RA
Thanks lebugue-addick. I was more interested in the valuation of assets (ie the upside). I'm guessing that (correctly) the accounting records will only record elements that can be proven and quantified - such as expenditure. Your quote from the Financial statements is still interesting as it just proves how much NCM is ploughing into Hav and getting to the MRE and PFS.
Regards
RA
The cash which you received from the sale of the shares remains within the ISA wrapper and can be used to purchase further shares within the wrapper. You will only reduce your ability to trade with that money if you withdraw the cash from the ISA.
On another note, have just heard the 9 OClock news on BBC and even they have now woken up to the fact that the price of gold is increasing!!!
RA