The latest Investing Matters Podcast episode with London Stock Exchange Group's Chris Mayo has just been released. Listen here.
GH was a big part of why we invested large amounts here and therefore made large amounts of money. But there are two things that jar with the brilliance of his GGP career to date - the Juri deal and his appearance yesterday which compared to his immaculate image previously was a PR disaster. He has not been seen for a while and if he had not had to appear yesterday to introduce the new guy I think he would have been kept away from the cameras. I hope I am wrong because I owe the man so much.
Alaluna, I have looked back over Newcrests joint ventures with juniors and they all seem to be either 25:75 (Juri and Altazor/Mirasol) or 30:70 (Hav and Imperial/Red Chris). So there would have to be a good reason why Scally would come in at 50:50. Some posters have floated the idea of a back room deal whereby we take 25 for Goliath in exchange for 50 at Scally. That would be misrepresentation at best and would see the CEO of NCM shown the door if it ever came out. Why bother if they can routinely get 70/75 without dodgy deals?
When will we get the next set of Scally drilling results after the ones which are currently due? GGP will be busy from April with the Juri JV drilling and NCM are busy with Hav. So will the one set of results, however good, be enough to produce the major rerating that some posters are hoping for? How far out can the market extrapolate from a few drillings?
Share patterns though tend to repeat themselves. I talked here about a bull pennant on our SP in November which is often followed by a sharp price rise. The rest is history.
It's been interesting watching highly intelligent posters on this board trying to find some convoluted way to justify this deal to themselves and others over the last two days and to go against everything they have said about Goliath etc for years. You can put all the lipstick you want on a pig but it's still a pig.
The only way this JV works for me is if GH and CB have got serious doubts as to what they are going to find at Goliath etc and whether they can be mined profitably. In that case get NCM on board with a bit of funding and when our doubts are confirmed NCM take the hit.
We are going to have to bear our share of the drilling costs of the new JV after the initial 20m from NCM and there is no 5% to sell at fair market value. The same people who are defending 25% were confidently talking about 50:50 a short while ago and extolling the massive potential of Goliath which we owned 100%..
I really cannot understand why Goliath which was supposed to be the jewel in the crown has gone for a less good deal than Havieron. GH is going to face some harsh questions. If NCM were not that bothered as they have Hav to worry about why not go elsewhere? Or am I missing womething? No wonder the SP reaction is so subdued.
November has been a slow news month and the SP has been in the doldrums. December should be hectic and rewarding but what is there to look forward to in the new year? NCM's 7 weekly reports seem to have lost their ability to thrill and Goliath etc will not apparently be drilled until April and not reported on until June/July onwards. Gold should kick off in the new year but we seem to be impervious to its ups and downs. Are we going to be droning on about a possible takeover bid for 6 months? What is going to excite all GGP's many PI followers and draw in new investors? Or will it become a stock for IIs looking for slow steady growth?
If AB has any other news up his sleeve this would be a perfect time to release while we are riding the current little wave up.