Member Info for StarBright

@Spades - only a few weeks back you posted: “They must be hopeful of a return to at least that initial 21p, as upto now this must surely be one of their big losses within the fund.”. They really don’t care about the returns from their GGP holding!

@MF11 - in the extract from the prospectus you shared, is the phrase “… by investing in a portfolio of securities that GENERALLY REPLICATES the Junior Gold Miners Index”

This is the key point. They aren’t constrained to holding all the index components. Only enough that they are confident they will replicate the index return.

@Jerryspaniel - none of us know what the manager is doing for certain. But slow-walking into or out of a position isn’t at all unusual for an ETF like this one. It’s the Occam’s razor explanation if you like.

The investment objective of the ETF is to replicate the return series of its base index. The main concern of the ETF managers (VanEck) is minimising their “tracking error” - the difference between portfolio returns and index returns. They aren’t worried (Sorry @Spade) about maximising - or even making - positive returns on individual portfolio investments; only about keeping portfolio returns within a narrow band relative to index returns.

If you ask an ETF manager why they are “underweight” a particular component, they will likely answer only by stating that they are confident that their portfolio as a whole enables them to track accurately its base index.

The day-to-day business of an ETF manager is balancing exposures and costs vs their tracking error “budget”. To replicate the index return within their permitted tracking error, they aren’t in any way required to hold every index component at any given point. In practice they have to be mindful not only of portfolio exposures, but also of trading costs. If the cost-related characteristics (spreads, volatility, liquidity etc) of a particular component are challenging, they may choose to run with an underweight (or overweight) target position for a period of time. They have sophisticated modelling that shows them how this might impact their tracking error. They might (for example) choose to simulate exposure to one component by overweighting another component that exhibits similar return characteristics, but has more favourable cost effects.

So it can be hard - as has perhaps been seen here - to predict the actions of ETF managers. They have more freedom than is readily supposed, and a range of strategies to help them achieve their replication objectives.

In the long run, the holdings and activities of indexed portfolios have no impact upon individual security returns. Long-term investors can - & should - disregard them.

This (Aquis) board was adopted and monopolised by MM and his imaginary friends. It gave MM a platform from which to work. It’s a shame that many played along and facilitated/indulged his self-centred fantasies….

There’s absolutely no need for two boards. Far better that interested posters collaborate over on the main board.

It would be great if this were to be the last post here!

If you couldn't see what was happening here with MM, you need a vision test.

The more interesting question is what was he trying to achieve, and was it on his own account or at the behest of others?

300k, 500k - these are still small trades, even the largest just £26k.

Price action late in the day may indicate that MM's were looking for shares. Never thought I'd say that - it's a wishful sentiment posted every day on every popular LSE share! But this time it may be more credible.

Watch the tape for bigger tickets reported late/tomorrow.

Clunk, rattle, rattle….

Must have a sore toe by now!

@Doublehun - the exchange rules allow for the delayed publication of trades above certain thresholds. In simple terms the larger the trade the longer the report can be delayed. The rules exist to make it easier for large ticket orders (both buys and sells) to be filled without creating immediate price dislocations, either upwards or downwards. The thresholds and permitted delays have been carefully calibrated over the years to balance the interests of market participants. The regime is ultimately beneficial for all holders because it improves liquidity by facilitating larger tickets. Research has shown that:

(1) markets with delayed trade reporting regimes function more effectively than those without - the benefits of increased volume/liquidity translate directly into easier trading and more effective price discovery

(2) delayed trade reporting has no long-term impact upon share prices

Without delayed trade reporting it would be significantly harder for institutional investors to manage positions in the size that they need. If you are one of the many here who celebrate the disclosure of institutional holdings, you should acknowledge that the delayed reporting regime is necessary to facilitate their participation.

Nonsense. All of the fund managers with even a passing interest in GGP will have had a proper look and asked all their questions during the placing process. I’m told Cannacord were relentless in pursuing meetings. Some credible managers chose to invest, many didn’t - not unusual. Those that invested were happy to buy shares at 4.8p, in the process appropriating the outsize return opportunity expected by the loyal LTH’s you, Hydrogen and the others have been gaslighting for years with “research” regularly topiaried* to suit your influencing objectives.

The managers who bought at 4.8p will be happy with subsequent price action. They may even sell (or have sold) a few to lower their averages. They pushed SD for a massive discount, and he folded to them.

The fund managers who chose not to invest at 4.8p won’t be chasing the price up in the secondary market out of fear of being left-out. They chose not to get in at 4.8p, they are not going to pay materially more until some time has passed AND there is material new news - DFS, material resource extensions at Telfer, long-term sustainable cashflow etc. Don’t expect mainstream Aus insto investors to dig deep and chase when any dual/secondary listing is achieved either. They have likely told management that they’ll invest only at or around the price offered to placing participants. There’s no chance they’ll be “scrambling for shares” to avoid being “locked out”. Index funds may have to play, but theirs is a transient impact - the price dislocations they provoke don’t last. As amply evidenced here previously…

Short positions are entirely irrelevant, and always have been. At no point have there been material short positions outstanding. Their only relevance is as a stick for amateur influencers to wave at their misguided followers.

So what can GGP shareholders expect? As @Dip666 pointed out earlier, 2020 was a different time and a different company. SD now has to pull two rabbits out of his hat. Previously he had only to hold his nerve whilst GGP’s majority partner did all the work. But now he has first to find more gold at Telfer (remember Newcrest spent years looking) with quantity/economics to fund the development of Havieron . Then he has to develop and commercialise Havieron itself. Shareholders today are accepting significant time horizon, operational and funding risks. Strong returns are possible once operational competence and cashflow generation are demonstrated, but this will take years.

[*Your view on Telfer prior to the acquisition announcement:

- “I’ve done a lot of research at Telfer and from what I’ve found there’s not much gold left. Newcrest have done lots of exploration and no significant results.”

- “Telfer is the main issue it’s been touch and go for a few years, it’s run out of viable ore.”

- “The price of gold is only relevant if there is ore to value! There’s hardly any left at Telfer.”

Obviously you’ve d

@Nomlas: “ Have to admit, what does the market want to make this move North?”

GGP has moved materially North in MCap terms over the last few months. At the beginning of September MCap was ~£350m with ~5bn shares in issue, so 7pps. Today GGP has an MCap of over £900m, an increase of 2.6x. Unfortunately the number of shares in issue has been increased to 13.1bn, so still at 7pps.

A textbook example of the impact of dilution on “loyal lth’s”, and a perfect illustration of how the y-axis of the Lassonde curve reflects MCap(actually EV) not share price.

For some reason this continues to be a share where outlandish expectations are very much the norm… Talk of 900p - let alone 1485p - on a takeover is just delusional. I don’t think there are ANY recorded instances of takeover premiums of that magnitude. 5-10x may just be possible from here with a stretchy NAV-based deal, and holders would (& should) consider that a huge result.

Thank you for that. I think his analysis is good.

Sorry - good summary @broomtree…!

Good summary @jrlse

The only point I’d perhaps add is that the shareholder register has been overloaded with DFM’s who bought for their clients at prices much higher than those prevailing today. They appear to be the source of the selling pressure that has perhaps disconnected the company’s SP from the results/progress it has delivered.

Sure. Share prices reflect the aggregate expectations of market participants - not contractual certainties. If all market participants are confident that a particular deal will be completed as planned, then the share price will reflect the expected impact of the deal. The expected impact will be “in the price”. If material doubts over completion emerge then that too will be reflected in the share price.

My view is that the market expects GGP to complete the deal with Newmont as announced. As a result the anticipated benefits of the deal are already priced in. I guess there may be a minor uplift to reflect the removal of whatever small % of uncertainty/doubt there is at present.

But there are posters here who appear to think there’ll be a material step-change re-rate on the completion announcement, with the share price jumping to reflect the contractual addition of the acquired assets. Those posters will be disappointed, unless such an announcement is accompanied by other new news - for example confirmation of additional potential at Telfer.

Absent new news - eg if the completion announcement is limited to confirmation of completion - then the market cap will adjust as the 2.7bn consideration shares are issued, such that the share price itself will be essentially unchanged by the confirmation.

If you believe the market expects the deal to be completed as set out, then it is irrational to expect a material uptick in the price when completion is confirmed.

The regulations on holdings disclosure https://www.handbook.fca.org.uk/handbook/DTR/5.pdf are carefully drafted to preclude loopholes like the one you propose.

The regulations are written for professional market participants, so their drafting assumes a high base-level of familiarity with applicable terminology and concepts. They are generally drafted on an “exception” basis - that is they establish a general principle - in this case “Holdings above certain thresholds must be disclosed…” and then set out a limited number of tightly-defined exclusions. Regulations are not drafted to say what you can’t do, so you won’t find (for example) a specific clause saying you can’t use incomplete orders to avoid disclosure obligations.

Whilst bulletin boards are replete with endless idiosyncratic variations on how regulatory requirements can be circumvented on technicalities, these are best viewed in the same way as the whole “freeman on the land” notion - ie uninformed nonsense that can be safely disregarded.

@Freddie2 said: “ 2021 market cap 1.2 billion - 30% hav + exploration licences

2024 market cap 590 million - 100% hav + telfer + exploration licence

Doesn’t make any sense”

Take yourself back to 2021. We had a Covid-driven speculative bubble in AIM shares, with GGP among the most obviously detached from reality. DFS & DTM were scheduled for 2022. GGP’s share of modest pre-completion CapEx was expected to be fully-funded by the sale of the 5%.

Compare with the situation today. The speculative bubble has burst. DFS is now expected in 2025 at the earliest. Substantial pre-completion costs are not yet funded (will hopefully be covered by a combination of Telfer earnings + bank debt so no further raise on ASX listing). First gold production from Hav now scheduled for H2 2027.

Viewed against the realised course of events since 2021 the market cap change is easy to rationalise so makes perfect sense.

Telfer AISC FY2023 was USD1633/Oz 2023, albeit that too was affected by lower sold volume (see AR extract below). AISC FY2022 comparator was USD1388/Oz.

“FY23 Performance

Telfer’s lower gold production in FY23 was driven by lower mill throughput and

lower grade.

In November 2022, the Newcrest Board approved expenditure of A$214 million

(~US$150 million) for the West Dome Stage 8 (WDS8) cutback. The cutback

underpins the continuity of operations at Telfer, with the mine now expected to

continue operations into early FY25. (3) First ore production in WDS8 was achieved during the December 2022 quarter with mining rates in the cutback performing above expectations in FY23. AISC of $1,633 per ounce was higher than FY22 primarily due to lower gold sales volumes, a lower realised copper price, an increase in production stripping activity relating to WDS8 and additional costs relating to inflationary pressures. This was partially offset by higher copper sales volumes and favourable FX movements.”

@Bamps21 said:

21/10: “We had 30% of Havieron with MC £350m & 5bn shares. Now we have 30% plus the cash to buy T/H. With MC c£650m with 10bn shares. 100% of T/H maybe £1.5bn with 13bn.That’s still positive even with the extra shares and with the biggest gold miner owning 20%. I would hope for at least 12p after acquisition.”

22/10: “This share price is about right now for what we have at the moment. Algorithms, trading patterns they will be useless once the acquisition is announced.”

@Bamps21 these posts indicate you expect a ratio-driven re-rate is going to take place when completion of the acquisition is confirmed. That the market cap will increase by 70/30 as the shares in issue increase from 10bn to 13bn. So £650m x 70/30 = £1.5bn / 13bn shares = 12pps.

But that REALLY isn’t how share prices work. The market today expects the deal to be completed as announced, so the current share price embeds the value of the additional 70% AND the additional 3bn shares that will be issued upon completion.

All other things being equal (ie no news announced etc) when the completion is RNS’d and the new shares have been issued, the market cap will rise in proportion to the increase in shares in issue. So today’s £650m x 13/10 = £845m, divided by 13bn shares will give 6.5pps. There won’t be a step-change upon completion driven in the way envisaged in your posts.

The DFM’s on that list are the likely sellers. Company should ensure its broker is all over them now, making the case to hold from here.