For all those interested in understanding the commercial background to the Ernest Giles exploration and Newmont, the following local news article from October 2017 may be of interest;
It goes some way to explain why Newmont was interested in EG last year. Basically, the current Tefler mine is projected to run out of commercial gold production by around 2020 unless local expansion opportunities can be found. EG located 30km away presented a very compelling opportunity. Newmont have all the infrastructure in place locally with current operations and plant. A new commercial asset 30km away was just what they needed.
Unfortunately, after 5 months of assessment Newcrest decided that it was not worth pursuing - even though they badly need to expand the operations around Tefler.
It looks to me like they (Newmont) badly wanted it to be workable but it just wasn't - or at least not worth spending money to find out!
Just an opinion based on what I am reading. Other opinions available and welcome......
As far as I am aware, the DSG work was carried out and paid for by Newmont. GGP were given access to the data but did not buy it. Therefore the DSG data / findings remain Newmonts intellectual property and contain commercially sensitive information. That is probably the reason for the NDA.
For those who have me filtered for 'deramping' unfortunately you will not see this post. Hopefully others who take a more balanced view will either have already read this document or will find it interesting. It is a presentation on the Tefler mine 30km away - operated by Newcrest. Its is 10 years old but is useful to see the nature and scale of the mining operation which is staggering.
The Tefler deposit is acknowledged to be approx. 26m oz of gold and the document shows that at Tefler there was an extraction rate between 2007 / 8 of around 700,000 oz / year giving the deposit a life span of approx 30-35 years.
Page 24 sets out the costs of running the operation at the time which averaged approx $460m / year not including deferred costs and depreciation.
The point here is that commercial mining of the type required to access the likely mineralisation in the GGP licence block is dependent on scale. I do not know exactly what the minimum ore body size would be for it to be deemed commercial but unless any mineralisation is close to the surface, it would need to be sizeable to offset the costs.
Thoughts on a postcard
djryan777...... that comment really is poor. Just because this company is on AIM does not make it alright to make misleading statements about the potential risks here. A pound invested on AIM is worth the same as a pound invested on the main market and those making a loss will feel the hurt just as much. I understand that AIM companies tend to be the ones at an earlier stage and therefore carrying bigger unknowns but that does not absolve a responsible investor of responsibility to understand that risk.
Your last post is misleading. You state that "Black hills has similar mineralisation to the big deposit the other side with Newcrest".... and in the same sentence you state that "it�s hardly been explored". My point is that you DO NOT KNOW that is has similar mineralisation. Nobody knows.... because it has not been explored! GGP think that it may have similar mineralisation and that would be lovely but investors here need to keep with the facts.
The facts for the positive case are;
1. We are operating in an area close to (30km away) known commercial gold mineralisation.
2. We are funded for the current initial exploration programme.
3. Surface MMI sampling has shown localised areas of promising grades
4. The company is getting boots on the ground soon to explore further
5. We have several licence areas in play
The facts for the negative are:
1. Gold mineralisation occurs in narrow bands and we could be 0.5km away and miss it or it may not be present.
2. The amount, depth to, and cost of, extraction are massive unknowns.
3. In my view, available cash in the bank would not cover the work required to prove up a resource estimate to a sufficient confidence level - therefore placings are a certainty.
4. Our potentially interested major producer took a close look at our most advanced licence area a few months ago - but walked.
5. Directors have not purchased any shares since August 2017 and no-one has as yet addressed this.
Don't say I don't provide a balanced assessment!
How do you know the 'yummy' gold mineralisation is near the surface? Are you basing this assessment on the initial surface sample grades? You must be the worlds best geologist to make a statement than that without teh benefit of any borehole results. Your personal geological insight just exceed the sum total of all the exploration geologists in Newcrest to make that connection. My hat goes off to you!
You do realise that gold mineralisation typically occurs in narrow bands within fractured rock zones and that there is a geological principal called 'dip' whereby strata in tectonically active regions are typically inclined. Therefore gold mineralisation often occurs at increasing depth across an ore body.
I am sure you have already considered this but the best surface sampling grades are probably just associated with the narrow 'outcropping' of the host strata. The bulk of the ore (if present) will be a progressively greater depths and therefore more expensive to extract..... or to use your well researched terminology.... not so 'yummy'
Can anyone explain why this current spike was any different from the spike which happened between the 12th and the 21st March 2018 where the SP went from 0.54 to 0.68 in 2 days only to retrace steadily to 0.56 over the next 7 days on no news. Do you really not see a pattern here?
If we get some substantive news that great but if we don't, recent history of this share suggests we will loose 90% of these recent gains.
Please do not just write my comments off as 'deramping'. I have raised a reasonable, evidenced point. Dismissing me as a 'deramper' is not addressing the point. If you are seriously invested here then you should be able to make a reasonable, evidenced counter-argument.
It is proper debate such as this which will help inform people reading this board so that they can better make up their own minds about when to invest.
Many thanks for your comment. I do not have direct experience of working in the mineral extraction industry but I have been trading / investing as a private individual in such companies both on AIM and on the main market for 9 years now. In that time I have had successes and failures but on balance it has been a profitable experience and I have picked up what I feel is a decent understanding of how exploration companies at various scales work and also of the overall marketplace.
I apologise if you find my earlier comment condescending and I hope that those who have their head screwed on will not see it that way but rather as a warning to those who may be influenced by the blatant ramping on her over the last few days. Earlier this week we saw a sentiment driven spike in the SP. This was not driven by news. It was not driven by a particular reference rumor. It was triggered in my view, by opportunists playing on the unknown and 'painting a rainbow' for people to chase. The SP surged nearly 25% and has since fallen back around 15%.
There is still no news or new rumor. The directors have not purchased any more shares at this 'bargain price' since the middle of last year. Has anyone asked themselves why that is if GGP are on the cusp of a reformation? They are not is a closed period precluding director purchases so is GT skint? I doubt it. So why is he only holding 4.2m shares??
I did make some predictions earlier in the week. I did not mention shorting at all but I did say that the SP would drop 5-10% which it has. I have not predicted a retrace back to 0.60 today but rather before news which I stand by. We will see next week how that plays out.
You may regard my posts as subtle deramping and that is your view. As I have said previously, I believe GGP is a good company with good *potential* assets but there are several hurdles to get over before true value can be realised. I am not interested in hype driven spikes. I have seen good people loose thousands on these and it does not do anything for the reputation of the company or the market.
I would rather some people think me condescending if my words of warning save others from loosing money.
Nice to see it holding so far today but in fairness I think we will slip back to 0.60 before news here. I can't see any news dropping for another week or so at least and even then I think people need to be realistic as to what the news flow will be.
The boreholes and analysis being undertaken at the moment is a first stage intervention at the site with very wide spacings between the boreholes. The purpose of these holes is to get a better feel for the gold play distribution laterally and vertically across the licence area and also to start to assess the physical rock properties for mechanical strength etc.
If people think that the next RNS is going to say 'we have proved 1m, 3m 5m oz of gold then they are barking mad. It will take several successive phases to borehole investigations to fill in the 'gaps' in order to evidence a resource estimate to a level that will hold water with any potential off-take partner doing their own due dilligence.
If you don't believe me, go an read up on REM / KDNC. They are sitting on a massive lithium resource in mexico which is VERY near the surface (less than 15m depth in places) and they have been drilling and drilling and drilling in phases since 2013. Only now in 2018 are they getting close to securing funding to develop the mining / extraction of the resource and even that is up in the air.
Investors looking here need to keep their heads screwed on and assess the risk here in the cold light of day. GGP MAY prove it up successfully, but this will take TIME. If people expect a provable resource estimate to be stated anytime soon (which is the only way to achieve a JV / Sale) then they are going to be sorely disappointed.
I would very much like to see GGP succeed however people need to understand that it is true growth that is needed, underpinned by factual evidence of 'accessible' resources, not a speculation driven bubble. All that will result in is good people getting trapped in here in spikes generated by rampers. At best, the patient ones will have their money tied up until GGP (hopefully) do prove it up - but the odds are 50/50 at best. At worst, they will get ****ed off at clearly being duped and will sell at a loss which served no-one.
Also, having people trapped in here in spikes wanting to get out just tempers true steady growth as those people will likely sell out in layers as the SP reaches their buy-in price.
I realise that this commentary is not going to be popular with the dreamcatchers but AIM can be a dreadful place for the inexperienced. People can loose thousands following speculative rises. Just look at what happened over at UKOG back in Feb/March. All that hype, everyone was convinced the oil flow rates at Broadford Bridge were good then suddenly an RNS drops and they are crap. SP drops over 50% in one day!
I hate to state the obvious, but RNS's can be negative as well as possitive. All this talk about 'the RNS is coming' is fine but just be aware that it might not say what you want. Newmont clearly think it wont!
Just be careful and manage your risk
That's very true djryan777 and I take your point. My point is that value that is built on speculation is shaky and very susceptible to sudden changes in sentiment - as we have seen today. I take your point that Newmont did come and take a look.... they spent time (6 months plus) and money on DSG assessing it and had the benefit of all their own research and knowledge about their neighboring licence area to assist them. Thats more information that other competitors would have access to.
At the end of the day they voted with their feet and walked - in spite of all their expenditure and knowledge. The inescapable fact is that at the present time, they have decided to write off their costs here and consider it not worth pursuing at the present time. They have not agreed to enter into a joint venture, even 20 / 80 with GGP. They have not, as far as we know, bound GGP into a continued right of first refusal of the licence area.
Looking at the facts, coldly in the light of day, it is clear that Newmont consider it is more likely that the grades are not commercial. If they thought they were, they would surely retain some sort of interest in the project.
**** the charts at your peril. There is a reason why professional traders use them. I am by no means an expert on the techniques but I have been trading / investing long enough to know the basic principles and have seen this pattern many many times before.
GGP are a good company with good potential assets what require work but this is AIM and this SP will get manipulated something chronic whilst speculation and rumour are all that there is to go on. Newmont walked for a damn good reason. If they can prove it up then great but it will take a good amount of work to convince a major. That will take time...... In the meantime the SP will spike and retrace..... mark my words.
Watching this closely at the moment and can see a 5 - 10% pre-close sell off coming in the run up to 4.30pm as traders close out their positions. Good progress for the day but still not substantiated by news if it was a leak / rumor.
Would be nice to see it hold here but I don't see it. Traders will close out their positions and to de-risk against a drop tomorrow morning if no news then. Just the way I see it.
Agreed that would be nice to see and a good base to build on but without news its not going to happen.
There is no chance this will hold onto 20 - 25% gains with no substantiated change in circumstances having been held in such a tight range between 0.54 and 0.60 since March
Just looking out for new investors here. Its a really decent company but you will be able to get in cheaper if you wait. Just look at the chart, the mm's are slowly releasing the pressure back down here. Without news to the contarary this will continue this pm
Agreed, this is a good company with lots of prospects but IMO news is still a way off. This is being played for day trading based on tapping into people being trigger happy on the buy button. All it takes for a fake spike is to deliberately put through a few decent buys in quick succession and the rest is done be people piling in for fear of missing out.
By all means get in now but this will drop with no news. Buy in cheaper later on.
I've seen this before so many times on high expectation stocks where people are wired ready for news. This looks very much like a false dawn at this moment. Without news this is likely to finish flat today. Be careful those trading.