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mercedesman - I think Tiggerman has already arranged the 25p party...........you guessed it, it's at 9am on the 23rd. Wink, smiley face icon.
RA
Never say 12p again
Golden Bullseye
12p is not enough
Dig another Day
From Rudall with love
Mmmmm.......I'll get my coat
RA
Hi Tiggerman - Apologies for being pedantic, however the FTSE 250 covers the 101st to 350th mcap companies in the FTSE. Therefore, if in the FTSE 350, a company must be in the 250 at least. I'm not sure that when an AIM company exceeds the mcap of the 350th FTSE company they are obliged to move into the FTSE index. There are 10 companies in FTSE 250 with mcaps of less than £500M and one with mcap of £77M
There are some advantages to PIs for the company to remain in the AIM so we may find that we do not want to move into FTSE.
Regards
RA
WF - I suspect that you are correct that this is for Tax reasons. The Australian Yax year runs from 1 Jul to 30 Jun. This extension is for 9 months and 5 days to 5 July. Mmmmm. Someone here has a friend who is an Australian Tax guru, could they be about to blow a tax allowance if they exercise these options in the same year as those they have already exercised.
That doesn't negate the argument that this could simply be to avoid questions regarding Director trading with privileged information.
Regards
RA
Muffster - My take on the variance in SP is that a high proportion of GGP shares are held by PIs and are traded quite regularly. Many of these PIs are day traders trying to make a quick buck on short term-volatility. My quick assessment shows that 1% of GGP is traded on average each day compared to around 0.25% for a FTSE100 stock where folks will hold on for a lot longer. Most if not all of those looking for a quick buck don't know whether GGP looks for gold or manufactures balloons, they just look for companies where there is some movement, get in and get out quickly, they have no idea (and don't care) about drill results next week.
Moral is either join them and day trade - or (as Paddy would say) sit on your hands and ride the minor ripples while the SP increases as I am sure it will.
Roll on next week.
Regards and ATB
RA
Apologies, I should have said that I also believe that a full buy-out of GGP by NCM is unlikely, keep the relationship good and let each party work on their sweet spots (not a euphamism). NCM to buy our remaining 25% at FMV (if GH agrees it's fair). Regards and ATB
RA
Tiggerman - I think that NCM already have first call on the Havieron tenement under the current JV for the period of the Farm-In.
"Additionally, during the farm-in period, Newcrest will have a first right of refusal over the remainder of Greatland’s Paterson project (Black Hills, Paterson Range East and remaining areas of Havieron licence)". By my reading, the farm in finishes at the end of stage 4 which has to be completed within 24 months of stage 3 (current phase) completing. Stage three is up to 24 months from March when stage 2 completed. NCM look as though they will completed stage 3 well within the 24 months.
Looks like the NCM/GGP relationship has a ways to go, it is in both parties' interest to ensure that the relationship remains a good one.
Paddy - Many thanks for the clarification. I guess that we all now know for sure that the pads to the SW of the Havieron Bullseye will be drilling further SW into the larger Magnetic Anomaly.................or maybe toward the bullseye to identify further step out...............or maybe just looking for a good spot for the decline. It's all so clear now, probably need Poirot, Marple, Holmes and Morse on the case. Let's hope for more clarity in a few days time.
Regards
RA
Thanks Paddy. Doesn't part of the white box cover an area not in the GGP tenement however. I'm also assuming that the size of a "block" does not align with the green grid. Thanks again.
Hi Strudel - Yes, I had exactly the same thought that the drills to the SW could be drilling further SW (ie away from the Hav Bullseye) to have a sneaky peak at the larger magnetic anomaly. However, the JV is for an interest in a 12 block area and I'm now wondering what is the extent of those 12 blocks. If the larger anomaly is not part of those 12 blocks, then drilling in that direction would surely be against the intentions of the JV!! - That is unless GGP and NCM have come to an agreement that it would be mutually useful to know what is down there. More questions. Anyone know the extent of the 12 blocks covered by the JV - Paddy??
Hi Zoros - If you really want to better understand the value of Havieron to GGP, then I would recommend the Investment Journey's two presentations on YouTube. The first was made on 10th April:
https://www.youtube.com/watch?v=rJH4LWJdCUo
The second is an shorter pres with updates to some of the assumptions made:
https://www.youtube.com/watch?v=Q34v4V_Fxds&list=TLPQMTIwNzIwMjB4mcAnileJJQ&index=2
In the second presentations, IJ takes some (purposefully) rather conservative values for a number of variables:
POG = $1500/oz, AISC of $912, 1.86g/T gold grade, Copper of 0.6% per Tonne, 5mOz Reserve of Gold, 20 year mine life and an NPV Discount Factor of 2.5%, he has assumed zero value to all of GGP's other assets. Those variables result in a SP of 17p. If you increase the reserves to 10m Oz, the price increases to 35p. From my research, this is probably the most comprehensive valuation of GGP (albeit conservative) and would indicate that there is plenty of upside in most of the variables and of course, the inclusion of GGP's other assets. In the second pres, IJ provides a range of potential SP range of between 6p and £1.13 - the lowest is at 5M Oz and $1000 PoG, the highest is 20M Oz and $2000. Therefore, I guess the answer to your question is somewhere between 6p and £1.13 depending on how bullish/bearsih you want to be on each of the various variables.
Additionally, with the drilling at Scallywag, we will be able to attribute more value to the other GGP held assets - any increase from zero has to be good.
I recommend that you take a look at both of the presentations to get a better idea of how each the unknowns could impact the SP - each of these will be getting clearer in the coming months and, I suspect that the variables used will improve thus increasing the potential share price.
Sungam - If the offer is made for the 5% at Fair Market Value, then we are obliged (under the terms of the JV) to accept. Question then is what about the other 25%? Keep it? Sell all at the same FMV rate or sell some in order to get some cash in the coffers but to retain a steady income into the future? SHould GH and SB decide to transact some of that remaining 25%, the sign of a "fair" deal would be that both parties come away slightly disappointed thinking that they could have got a higher (GH) or lower (SB) price. We have to hope that this negotiation (should it happen) does not sour the relationship moving forward.
I suspect that this position will be having input into the pre-feasibility study and then in stage 4, the feasibility study so the costs of recruitment and employment would be part of the $25M and $20M which NCM are to spend on stages 3 and 4.
What this does mean however is that NCM is now in the process of getting to the mine/no mine decision and are starting to commit funds to the process. Not sure whether these costs would be part of the $65M which they are commited to spend as their commitment to JV.
Schlemiel - Without all the MRE and Feasibility Studies completed, I'm guessing that the "formal" decision to mine has not been taken, therefore, no need to make any announcement. However, informally, NCM are pretty certain that they will be mining and so are in the process of putting that plan into action and will be recruiting the staff to get involved in the planning process as the evidence from the current drilling provides clues as to where they would site the decline etc. Once all the phases (MRE, PFS) have been complete and NCM review the available evidence, they will have some form of (significant) governance process to "formally" decide to mine and commit significant company funds. Should that governance process determine not to mine, NCM will just undo the hirings and let people go - pennies to them. Hiring at this point means that they compress timescales by not taking actions consecutively but by doing them concurrently. The member of staff that they are recruiting has plenty on his plate before he starts commiting large amounts of NCM funds and commencing the physical digging of the decline and he will likely have a part to play in the governance process - to mine or not. I suspect that we will see plenty of other signals over the coming months that NCM are going to mine, ahead of their formal decision to mine. They're simply trying to minimise the time from flash to bang when they do decide to pull the pin.
Really enjoyed the discussion yesterday on potential risks ahead of us, thanks to those who contributed. I'm still in and comfortable with all the identified risks and any mitigations which might be in place.
My mind is now wandering on what happens on the ground...
For Havieron, NCM are now making that place look like a swiss cheese as they try to identify the size, shape and composition of the elephant and also to try to determine where to start the decline. Do we think that GH and CB have any input in drill locations and angles or do they just let NCM get on with it? As the assay results are revealed, I'm guessing that GGP is privvy to those results as they are one of the partners of the JV? SHould anything of note be identified, are they required to notify the market - I read up on notifiable events yesterday and it is generally deemed anything which could move sp by more than 10% see here: https://www.sharesmagazine.co.uk/article/understanding-the-different-types-of-stock-market-announcements
So positive news at Havieron might need to be reported by GGP with small market cap but not by NCM with large market cap. How does NCM and GGP address this particular conundrum?
More importantly, what is GH and CB's strategy with regard to investigative drilling in Scallywag? Do they drill many times around their biggest/best bet bullseye, or do they make one pinpointed drill in each of the opportunities. Perhaps the more experienced (in mining) on this board would be able to enlighten. I think that we're also conscious that GH is pretty smart when it comes to newsflow to the market so could we find that they decide not to drill in certain areas for fear of too much good news all at once?
There are clearly many elements which would need to be considered as they determine their current drill strategy:
One Target or Many
Need to release results of drilling to the market
Do they want share price high at this point?
Availability of rigs
Preservation of cash and need to get biggest bang for the buck
Just a few thoughts for debate today as Gold hopefully drives through $1800 and the GGP SP moves away from 12p
ATB
RA
Hi BR. More than happy to have my words in ggphelp.
Regards
RA
TMT - You make a strong argument for a "sell-out" to be recommended by the GGP BoD. This is where we, as PIs have to have confidence in GH and CB to have "our" interests at the centre of their decision making and their recommendations. They would need to make a judgement of fair value based upon the risks/rewards available and the relative probabilities on both sides given the information that they have at the time of the offer/deal. We're then reliant on them determining what is the SP which would be acceptable to the owners of 50% of the shares of GGP. Whatever the BoD recommends, there will be some shareholders who will determine that the deal is a steal and some who will argue that they have been sold down the river. If someone were to offer me 35p now for my shares, I'd take it, however in 8 months time we will know a lot more and I may not be as keen to part with my shares. I guess we will just need to see how this all develops, how the information reveals itself and whether there is any offer placed on the table.
I guess that my main thought on why NCM would not take out all of GGP is that NCM want to remain and focus on operating mines on proven locations - that is their sweet spot. They will allow the numerous small and agile prospecting companies to continue to find the locations and then purchase those locations once they have been proven. There is one thing which would be certain; if GGP were to be bought out by a big conglomerate - their effectiveness as a prospector would decline significantly as the conglomerate governance would stifle their agility and their ability to make bold decisions would go out of the window, the benefit of owning GGP would be simply for the tenements and not for any future prospects. Just my feeling.
These next few months are full of a number of unknowns as detailed in the original post but I, for one, am comfortable that the potential upside far outweighs the downside and only time will tell how good a decision it was to invest.
Most exciting and interesting share I've ever owned
ATB
RA
Thanks TMT for your comments. So we agree that the next set of drill results could be less than good along with no finds in other tenements which may peg the price back some and effectively leave us with "what we already have". Your other "risk" relating to a early and "low" buyout of either GGP as a whole or just Havieron is (in my mind) not a risk but a missed opportunity and you have clearly recognised that by purchasing NCM you are covered for that missed opportunity.
I agree with you that if there is a buyout, then NCM will be front of the queue or will win through toll processing at Telfer for another major. I also feel that GGP will not be bought out as awhole but simply the Havieron piece - it would be too difficult to determine a sensible value for the "non-Havieron" parts of GGP and could not be justified by any potential purchaser. In my mind, whatever happens over the coming year, it would take all the planets to line up for us to be in a worse position than where we are at present.
Thanks again and ATB
RA
Redhamster - Please do not take my post relating to risks as pessimism. You'll have seen from the original post that I am bullish on GGP and was simply wondering whether I was missing something obvious that could knock the SP down. In the responses I received, there was nothing that has made me change my bullish assessment.
There were a couple of risks identified which I will need to assess further in my mathematically compensated risk adjustment assessment. The risk identified by HopefullyGold that Scallywag could turn out to be a significant deposit of Tomato Soup and the risk identified by JoeBass that the Tooth Fairy would steal all of the gold. I will need to assess the likelihood of either of these happening in order to retain my bullish stance!!
Amusingly, the post identifying the ToothFairy risk appears to have been removed by the moderators which will clearly raise my suspicions. Thanks to all who identified other potential risks, I still remain invested and look forward to good news in the near future.
ATB
RA