Member Info for StarBright

@Bamps - you need to look at the page numbers used in the document itself (as these align with the index pages) not the way your pdf reader paginates it. The Greater Bilby is covered on page 70…

Table 7-3 shows forecast tons of greenhouse gases emissions associated with Havieron ore processing

CY23 zero tons

CY24 zero tons

CY25 38,842 tons

CY26 46,881 tons

CY27 53,089 tons

etc…

The document indicates that ore processing for Havieron won’t start until 2025. See table 7-3 on page 103.

I don’t think this is a big revision though. The Sprott financial model has just 33koz production in CY24 vs 175koz in CY25. If that 33koz (presumably just a few months production?) slips into CY25 it won’t result in a material change to their valuation output.

Def calendar years not financial years btw - it’s an EPA document not financial/tax.

@Culpepper - Newmont won't commission or (therefore) publish such an Independent Expert Report for its own shareholders ahead of their vote. It's a regulatory requirement for Newcrest only. In simple it gets Newcrest's directors & advisers off the hook for later being accused of recommending a sale at an undervalue.

"The Scheme is subject to customary conditions including:

- Shareholder approvals from both companies

- Newcrest: more than 50 percent of shareholders voting and at least 75 percent of votes cast

- Newmont: more than 50 percent of votes cast

- The Independent Expert concluding that the Scheme is in the best interests of Newcrest shareholders

- Relevant regulatory approvals

- No material adverse event or prescribed occurrences in respect of either company"

As others have pointed out, the transaction will go through. Don't be waiting on tenterhooks for the outcome of the vote, the major shareholders will have given undertakings in advance regarding their voting intentions subject only to MAC and IER.

@Dip666 - I think that SD is no longer as confident of being funded for 30% of Hav as he was last November*.

If he were to reiterate that level of confidence I think the SP would respond positively. But he isn’t / hasn’t. Rather he’s been carefully laying out breadcrumbs toward some sort of raise. If one is announced watch him point to these crumbs when anyone expresses surprise…

My read is that GGP needs additional capital to stand its 30% corner. Whether this is because of changes to the mining plan (potentially a net +ve) or the impact of inflation or the lending banks looking for additional capital etc etc I don’t know. All are possible, and CEO’s have to respond to changing circumstances.

We’ll find out at some point.

* “I think we've disclosed to the market, yeah, we had the 2 million tonne PFS, but we all knew it was looking at trying to create a 3 million tonne feasibility study. So, in our internal models, in terms of engagement with the bank, we really focused on that larger mine being the 3 million tonnes.

So and again we've kind of prebaked that additional capital of debt and equity and you know, we're keen to finalize the study so we can say that with complete confidence, but we feel we're incredibly well positioned for it.”

The threat/possibility of a raise looks to be weighing heavily on the sp. If GGP was indeed fully funded for Hav as per the preferred narrative here, then I think SD would have said so by now. Instead he is always careful to acknowledge the possibility that more capital may be sought:

[SD] “We'll obviously consider at the time of listing whether it's prudent to consider raising equity either in Australia or London. But our base case is to do a compliance listing, set up the platform.”

[SD] “…look potentially it's a compliance listing where we really just established the Bridgehead, alternative we create some liquidity here…”

[RNS] Greatland confirms that its ASX Listing preparations remain on track and it has been evaluating whether to conduct a potential equity capital raising as part of that process.

@antigua18 observes that SD won’t “…be stupid enough to do a raise at this price, he would lose a lot of respect from shareholders”. That might be true for a discretionary raise. But what if the company is short of the required funding for Hav so a raise of some sort is required?

Perhaps SD has backed himself into a corner, with the Aus instos he so clearly wants onboard prepared to participate only at an EV/MCap even lower than todays £300m? Whilst raising at this level might be a very bitter pill for LT holders, it may be the least worst alternative.

If SD were to state unequivocally that no further capital raise will be required for funding GGP’s 30% of Hav, I think the SP would respond positively. Such wording would allow him to retain the option of raising capital for any of the left-field/hail-Mary possibilities (buying the 70% etc) that are out there.

“September Quarter” in Aus finance parlance is the three months ending on September 30th. It’s a tax construct that has been assimilated into the general Australian business lexicon; a very normal phrase for an Aussie accountant like SD to use. In Australia, financial years run from 1 July to 30 June the following year, so the phrases “September Quarter” and “Quarter One” are used interchangeably.

See here for an unequivocal explanation from someone called Blake in the ATO (Australian Taxation Office):

“When we talk about quarters and refer to a "[month] quarter", we mean the quarter that ends in that month.

The September quarter for 2020 is 1 July 2020 - 30 September 2020.”

https://community.ato.gov.au/s/question/a0J9s000000170k/p00003257

If there is significant interest from Aus insto investors then perhaps it will make sense to do a placing alongside the listing and shift the financing mix toward equity. Equity might even be cheaper than debt now that rates have risen so far since the original structuring work was done.

If (big if!) insto demand is there then such a raise might not require a discount. If -say- AUD70m were raised, that would reduce annual interest costs by AUD70m*7.5% = 5.25m going forward. Perhaps more because it may be possible to re-negotiate the spread if there’s a larger equity component.

Not all placings are bad for pre-existing equity holders…

If there isn’t sufficient insto demand to support a placing, then existing holders shouldn’t expect the same institutions to chase the SP higher on the open market after the ASX listing.

Max - this is an incredibly basic point on which to parade your ignorance... If they were WARRANTS, the company would receive cash in exchange for issuing the shares. As they are OPTIONS no such receipt is required - the shares to satisfy the exercise may just be bought on the market by the company when exercised.

@Max111: “…with options, they have to buy bringing in cash into the company.”

Wrong.

Indeed! Although 10% of such gains will now accrue to the new appointees rather than you…

Too many spoons, no soup so far.

@nookie: “ Will buy more shares when the trend is upward….maybe today??”

@cjmorley: “What we need now, is some significant director share purchases to show confidence.”

Guys - they have just been “granted” nearly 10% of the company…!

@RNS said: “In total, the Board has agreed to issue 505 million Performance Rights and Options representing approximately 9.5% of the Company's issued share capital”

“…operation of the han**** project will now commence during 2024.”

Operation may not mean production…

The Sep '22 RNS on funding stated: "Completion of the debt facilities and Wyloo Placement will enable Greatland to be fully funded for its 30 per cent share of the Havieron project development based upon the October 2021 2Mtpa Pre-Feasibility Study; and well positioned to be fully funded in respect of the Feasibility Study targeting an expansion to around 3Mtpa due in the December 2022 quarter."

As the junior JV partner, GGP may prefer what @sandgrounded summarised: "The original plan was to mine the high grade ore from the main breccias and then use the finance from profits there, to explore and develop the enlarged south east breccia and other areas. This plan was developed to get the mine up and running and to use the profits instead of increasing equity."

The majority JV partner - itself undergoing a major transition - may however prefer the 3Mtpa expansion pathway, even though this might require greater upfront capex and time spent on planning etc. As @Dip666 says: "All this suits NCM more than us but they are the majority partner."

The market appears to have concluded that GGP may not have the funding required for anything beyond the 2Mtpa pathway and plans to address this through a placing alongside the heavily-trailed ASX listing. Thus the risk for existing GGP investors is that SD is forced to raise equity capital at what many consider to be a suppressed share price. Further dilution at a discounted level will be hard for loyal LTH's, some of whom may not have understood that the y-axis of the Lassonde curve illustrates value not share price.

The better scenario for existing GGP investors is that the current funding package will adequately cover the upfront costs for the chosen mine development pathway, so no raise is required and the ASX listing is indeed "compliance only".

Both scenarios have their advocates. Other / new scenarios are also possible, although harder to envisage than those highlighted to date in RNS etc. I think we will all find out during the next 3-4 months.

These really aren’t key to any of the valuation hypotheses explored/expressed here, so the news this morning isn’t particularly meaningful. The predictable/opportunistic reaction of MM’s (& no doubt some others) can be safely disregarded.

@Bertiesboy: “Has to be the strongest signal yet that Havieron is a sell as far as Newmont is concerned. I take that as great news.”

I think the opposite. An asset owner looking to sell will be super-animated and super-positive about their project.

@maddog38 - no, debt doesn’t work like that.

The RNS indicates that ANGS presently has the following debts:

1. £7.35m under it’s “senior facility” @LIBOR+12% (I think, may be wrong)

2. £9m of “junior / bridge facilities” @SONIA+15%

These will be retired and replaced with a new $25m “global facility” @15% fixed. Certain restrictive covenants (no details provided) will be relaxed under the re-fi.

@WG818 - thank you for sharing the insight that the P90 figures are “far more likely” than the P50 ;>

A few months back I made a post about how free cash flow opens up opportunities - for refinancing, for the derivative contracts etc etc.

Game on.

A lot to digest in there.

My instinctive reaction is that it is positive news. In which case why RNS on a Friday afternoon rather than Monday morning? Perhaps their hand was forced by a leak?

Perhaps nothing more than an opportunist raise that leaves ZIOC with more fuel in the tank so less vulnerable to delaying tactics..?