Member Info for StarBright

@Dipp666 - “…none of us ever considered we'd be starting the 2nd wave up from here., crazy but upside is now not fixed albeit will mean holding on much longer than many perhaps planned - and we already have for a few years.”

With 13.1bn shares in issue, to get back to its all-time-high GGP will need a market cap of £5bn - which would comfortably make it a FTSE 100 company today.

A P/E ratio of 10x implies steady-state earnings (post tax) of £500m, USD715m. With an effective tax rate of 30% [as used in the CPR] that’s about USD1bn pa.

With LT POG at USD1844 [as used in the CPR] GGP might generate USD1k per oz (AuEq, using the quoted AISC USD818). That’s 1Moz pa (to generate USD1bn). At today’s POG required production would be closer to 0.6Moz pa.

TLDR; to get back to GGP’s previous 38.5p ATH (at a PE of 10x) will require developing the Telfer-Havieron complex to be a Tier One* gold mine producing somewhere between 0.6~1Moz Pa.

*Barrick definition: “Tier 1 is very clear – 500 000 oz of potential gold production for more than ten years at the lower half of the cost curve”

The Newcrest “Scheme Booklet” from their own transaction (published September 2023) indicated Havieron production would start in FY28. I remember remarking at the time that this seemed to be at odds with the expectations of GGP investors.

I also recall reading an EPA(?) or similar application last year that showed production starting in (I think) 2027. Again, at odds with the expectations of GGP investors.

@Zoros, the owner of the popular GGP road-map, only recently changed first ore estimated timing from 2024 to 2025. I see he’s now updated this to 2027 in the latest iteration.

So has SD somehow allowed GGP investors to hold onto a materially incorrect picture regarding the likely date of first production? Or has he only very recently found out that a delay to 2027 is on the cards?

A more interesting question to consider is when did SD and team become aware that first gold production might be as late as 2027? That’s a huge change from the last indications given. In 2022 some of SD’s corporate decks included a “Production Profile” chart that showed production in FY24, although I can see that he (quietly?) dropped this from later decks.

A question for the well-researched detail hounds here: When did SD last give a straight(ish) answer to questions about the timing of first ore? He must have been asked at all the TH meetings, Proactive videos etc.

If the last info he has provided (production in FY24) dates back to 2022, and he’s said nothing since then I wonder when he became aware that there was a material delay relative to the publicly stated position. It seems extraordinary that an update regarding the target date for first ore has only been revealed to shareholders in an Admission Document - when disclosure would have been forced.

Has he sat on the knowledge that the likely timing of first ore was materially delayed, and not disclosed it for an extended period? V problematic if so…

It’ll be interesting to see the delayed prints from today. Larger size = longer delay, some may not be released until as late as noon tomorrow.

My take is that there are two deals here that need to be assessed separately.

The first is the purchase of the remaining 70% + Telfer, for which a headline price of $475m was agreed.

The second is the funding of this purchase, principally through the issuance of 5.4bn shares at 4.8p to placees PLUS 2.7bn shares to the vendor. That’s total issuance of 8.1bn shares in return for approx £400m.

If this issuance had been priced at a premium to the price on suspension - as many posters were insistent was likely - then FAR fewer than 8bn new shares would have been required. By way of illustration, a 2.5pps premium would have required only 4bn new shares.

The preferred / defended narrative on this board has long been that:

1. Shaun Day would always protect the interests of existing LTH’s

2. No big equity raise would be needed (banks are queuing up to lend etc)

3. Should any equity raise be required it would be priced at a premium

4. Havieron would be in production in 2024/2025 as the decline (and therefore the mine) was close to completion

But we have now learned some brutal truths. £400m has had to be raised at a material discount and Havieron will need a further £400m to take it into gold production in 2027.

Shaun Day may (we’ll see) have secured a great deal for the purchase at $475m. But in securing only 4.8pps for the required issuance, he’s sold GGP’s existing investors down the river.

Incoming investors who will secure their holdings at 4.8p may have reason to celebrate Shaun Day’s deals. He is doubtless looking forward to being richly rewarded by a remuneration committee composed of grateful new shareholders. But existing investors should recognise that their situation is very different.

@Bfdinvestor:

5.0bn shares in issue today

5.3bn Placing Shares

2.7bn Consideration Shares

So there’ll be 13bn shares in issue on readmission.

The Admission Document says: “Market Capitalisation of the Company following Readmission £627.9m (approximately)”

So GGP are expecting approx £627.9m MCap with 13bn shares in issue = 4.8pps

Among the many other interesting figures in the AdDoc is USD534m required for pre-production CapEx

Yes - shorts will exit at 4.8p

The split in my list should be after shareholder approvals and before DFS. A double line-space was there when I posted it, but evidently reformatted by LSE’s chat system…

@MH01, I’m 100% confident that debt will feature in the funding mix - SD will want the leverage and tax benefits it brings. But that is a separate (albeit related) question to the shape of the consideration which is partially addressed in the RNS today.

More details needed before considered conclusions can be drawn. Inter alia:

- the agreed purchase consideration for the 70%

- the agreed purchase consideration (+ve, -ve or zero) for Telfer

- how the purchase consideration package will be structured (cash, deferred cash, equity)

- NEM loan retirement

- volume and pricing of equity raise

- details of any other issuance (equity or convertibles etc) forming part of purchase consideration

- details of shareholder approvals required

- the DFS

- required CapEx to completion of construction

- required working capital to first cash generation

- volume and pricing of debt raise

I’ve split this list into two because the shape of the announcement today hints that we may see the whole picture revealed in two stages:

1. The first tranche upon the purchase of the 70%+Telfer; this looks imminent. Looks like this is going to be equity funded one way or another.

2. A second tranche on publication of the DFS, when capex and working capital requirements will be set out along with debt requirements through to production.

If I had to guess I would speculate that we’ll see the remaining details of the first tranche shortly, following which the suspension will be lifted.

The second tranche (DFS + debtfunding details) we’ll get later this year, perhaps November.

Just speculation on my part, YMMV etc.

Have I somehow wandered onto Facebook?

Agreed re the mention of “deferred payments”.

Also interesting to note the mention of “…and equity”, which presumably refers to GGP issuing some of its own equity to NEM as part of the total consideration. This is potentially a material positive, as it creates alignment with NEM regarding GGP’s success going forward. On the other hand NEM won’t be paying cash for any such shares so they’ll be a straight denominator addition (ie dilutive) for existing holders.

It’s also interesting that there’s no mention of a debt component (I had speculated previously that there might be a convertible of some sort) for the purchase consideration. Perhaps that has had to be equity funded, with debt funding reserved (as before) to fund the remaining CapEx and working capital requirements?

The balance between the indicated component parts of the total funding (including remaining CapEx, debt retirement and working capital) needed will be key here.

@pv72, your illustration embeds an implicit assumption that Telfer is included at zero. You have GGP paying £250m for the 70%, which the market subsequently revalues at £840m to get to your £1.2bn and 12pps.

Why would such a revaluation occur?

Game on!

Interesting that the article says “Sources said despite Monday’s $500m raise, Greatland wouldn’t pull the trigger on its ASX listing until 2025”

More of the pieces need to be seen here before conclusions can be drawn.

Well shiver my timbers…. Holders here should reward themselves with a tot of throat massager, and look ship-shape on deck ahead of further keelhauling from sceptic Lil’ and the band of merry pirates.

@JiffyBag - @Hydrogen has told us that a combination of the stockpile and “…disciplined cost management at Telfer will produce immediate cash flows“ making us a producer therefore catapulting us into the GDX ,who’ll need to purchase a ton of stock on the open market. Boom! We will be buying Telfer “at a steal” and any decommissioning liabilities are years away and will be easily covered by future profits…

@Tinners, as suggested above take a look at ggpchat where @Hydrogen has laid it out in recent posts…

1. A deal for GGP to buy Telfer + 70% of Havieron from NEM has been done for c. AUD700m (call it USD500m) and is set for release, “…news this week it seems”!

2. Within 10 days of announcing the deal, SD will be “…dropping a fat DFS into the market” revealing that Hav will in fact be a 6MTPA mine!

3. The “…nay-sayers could be utterly dumbfounded”, as the market (finally!) sees that SD has acquired a “…$5bn AUD according to recent Sprott research note” or USD3.5bn asset from NEM for just USD0.5bn!

On the back of this overnight USD3bn value revelation, it should be straightforward for SD to structure a combined equity and debt raise (with the equity portion undiscounted/non-dilutive, possibly even at a premium to the existing share price!) to fund:

- the USD500m purchase price, PLUS…

- 100% of the remaining capex to completion, PLUS…

- any/all necessary debt retirement, PLUS…

- operational funding through to first cash received from the sale of gold

What could possibly go wrong?

Thank you for that link, @clissold345

I have seen Evolution highlighted previously as potential acquirors of Telfer. Here’s an example https://youtu.be/t8eiqQ4nWjo?si=I9KuhTa3ehFVdSWW (somewhere around the 44min mark)

What prompted you to mention them here/today @aim999?

@Hydrogen has a different view. He says up to around 10MTpa from Havieron SLOS: https://www.ggpchat.co.uk/viewtopic.php?p=4380#p4380

“I've been in conversation with a few people about why Havieron SLOS is capable of up to around 10MT PA, as some think its unlikely. (this obviously excludes the block cave)

As a consequence, I decided to work a calculation through, for the benefit of myself and other holders, who would like a better understanding of the potential numbers. in the process I've asked an experienced gold miner to assist with my calculations.

The long SLOS ore stopes of Havierorn should be huge - around 60 to 90m long ( I'm not certain as to the exact volume but something like 90m x 4.5m x 5m or wider) sections, blasted as a cut, say once a week.

Once the dust settles, these are cleared and mucked out by 20 tonne Sandvik underground shovel loaders to a dedicated ore pass ( ore drop) into automated skips and loaded into the hoist. Multiple Stopes would be worked at once to produce 21,000-23,000 tonne. The rest is loaded into a fleet of approximately 10-20 x 20t or 40t (TBC) Sandvik underground haul trucks, travelling 6-7km round trip up the decline to the surface ROM pad.“

@SpadesAspade - if Hav is worth USD1.2bn then doesn’t GGP have to raise $840m to buy the remaining 70%? GGP will also have to find 100% of the capital to fund the mine into production, not the 30% it was previously on the hook for.

That’s a lot of money to find. MUCH more than the USD350m you mention.

How can you be confident that SD can raise that sort of money (remember that additional debt without additional equity is a pipe dream) without materially diluting existing holders?

A material raise via ASX listing seems likely. When push comes to shove (ie when the placing price is being set) will SD fight for the rights of his loyal band of UK PI’s? Or will he focus on the interests of his new equity providers…? Remember which group will determine his remuneration, equity incentivisation and career prospects going forward.

THAT is the question.