The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Hi Quepensa,
Taking a position in the penny dreadfuls (and especially the sub penny dreadfuls) of the gold patch isn't all about investing . I'm preparing for the next gold mania, like 2011, when no hopers with "gold "in their name were multi-bagging in days and weeks. A bit like BZT this week but on steroids. Of course, you don't want to be too greedy and have to get out before the music stops.
http://www.321gold.com/editorials/thomson_s/thomson_s_101320.html
If it's good news then the AEM surveying and drilling will be combined perhaps with a JV; if not so good Scally is reported with another tenement. Surely they wouldn't start with Scally unless GGP and NCM had good reason to expect fireworks. If Scally is a duster it will take a while to rebuild confidence as it would be such an anti-climax after Hav. No, don't even think about it they're not daft.
I am interested in investing here so can anyone please let me know:
1. What is the general view of this board of the company's management?
2. The company is pursuing a number of projects with different minerals in two different jurisdictions. Are they going to be able to control all this or is it just a scatter gun policy and they will concentrate on any winners that turn up?
If Goliath is our best bet then why are we drilling Scally? The best defence against an unwelcome bidder would be to tell the shareholders sit on your hands and wait till you see our huge Goliath results. Plus the best , quickest shareholder value would be from doing a JV on the best prospective tenement after Hav. Have NCM and their geologists asked us if we would drill Scally first for some reason? All will be revealed soon.
The SP may be going down for a test of last week's low under 18p. It it bounces from there that will be a good double bottom and an excellent entry/add to investment point. Of course, any news from SW and all bets are off.
AB would like to get rid of us - he's more or less said so in the past- and replace us with IIs. For him we're a bunch of whingers with tuppence invested who want news every other day. In turn we are too diffuse and not organised so cannot influence him.
But the IIs and HNWIs who invested at 16p are another matter. They have his detailed strategic plans and sales forecasts and his direct tel no. With their Christmas bonus calculation not that far off and the SP only just over their entry point they will be piling on the pressure. I hope they are focussing AB's mind and efforts.
If NCM have been receiving updates from GGP on the Scally results is there a possibility that a JV could be announced at the same time as or soon after the initial drilling results? How much drilling would be needed for a decision to be made? Looking further out if we were lucky enough to have a couple of GGP's tenements strike would NCM have the financial and practical resources to JV on those at the same time as Hav? I assume GH would want to get them mined ASAP.
An alternative to a special dividend if NCM were to buy just Havieron would be for GH to offer to buy back say half the shares which would leave a less unwieldy number of shares in issue. This would be more tax efficient for IIs and PIs who aren't holding in ISAs and might encourage more PIs into the fold. The ongoing shareholders would own the other tenements and could get a regular dividend while GH would have spare cash to fund more drilling. Sorry if already suggested, it's hard to keep up.
If the Scally drill results disappoint then the SP will dip however well supported by Havieron in the longer term. That could be NCM's moment to pounce. Could GH hold the Scally results back in the hope that the other tenement results would be better?
Does anyone have any gold or silver UK quoted small cap explorers with an SP below 1p. When the gold bull market really got going up to 2011 these were rocketing for a couple of weeks. I want to monitor and get in early and hopefully out again before the inevitable crash.
The NCM acquisition in 2010 under a previous management that O'Conner referred to was that of Lihir, a Papua New Guinea gold miner. The original offer from NCM of shares and cash at a premium of 35% to Lihir's pre offer SP was rejected by Lihir's board as it did not offer sufficient premium for complete control of the company. To draw out a rival bid Lihir opened their books for due diligence but when this did not work they agreed an improved offer 6% higher from NCM a month later. The acquisition was a disaster for NCM because of mining difficulties. NCM would not need to do due diligence on GGP of course as they know more about GGP than GGP do.
If NCM do decide to bid for GGP after their earn in and after good results from Scally and elsewhere it will be an agreed bid with the GGP directors pledging their shares to NCM in the event of a successful takeover and receiving jobs and goodies like warrants from NCM if they want them. Because of the sheer uniqueness of the ounces in the ground in this scenario and just to tweak NCM's nose a counter bid or two will probably emerge and the GGP directors will have to approve these as they had already approved NCM's lower bid. The GGP assets are worth more to NCM than anyone else because of Telfer so they will likely win the bidding war but the counter bidders will have won too because they will have forced a rival to pay more than they wanted to for GGP and will pocket lovely cash when they offload the shares they've bought in the market to NCM at a higher price. So the moral of this is be careful not to sell your shares too soon in the market if we get an offer or you might miss all the fun and fireworks .
No one seems to be expecting further six weekly drilling updates from Newcrest. Why is that? How otherwise will we be kept informed about drilling progress? Is it correct that Newcrest will only be drilling now to increase the mineralisation at depth and to the NW, not in other directions.? When I say only that's a big only.
Silver is up well over a dollar an ounce today and silver leads gold in bull markets. Also EU has agreed to issue lots more counterfeit money to the club med countries and the US will be issuing trillions more next week. Gold is on a one way street. Also, didn't someone mention news tomorrow??