Member Info for StarBright

This article covers quite well some of the areas which seem to cause difficulty here.

https://www.proactiveinvestors.co.uk/companies/news/81/idiots-guide-to-the-london-stock-exchanges-setsmm-0379.html

Agreed Bhargav. Those aiming for a sniper-shot at BG might be better throwing a grenade at the BoD in general though…

This is all very disappointing to read, and I will ensure my votes are cast. Thank you to those who’ve stayed close to the detail of the proposals and posted here.

A question though. Are we sure that Brad George is the source of the issues? I understand that he is a potential beneficiary of the options “proposal”. I’ve had some email correspondence with the company on various issues in the last year or so - Loryser, TSX etc - and it sometimes appears that Brad is not really the one pulling the strings. Maybe I am mistaken but my impression is that he’s something of a reluctant front-man..?I had the opportunity to speak a while back with one of Agnico’s directors. He didn’t even know who Brad George was…

Perhaps I am mistaken, but that’s my impression.

@Walkabout - the GDXJ ETF(s) hold some GGP shares in their portfolios.

GGP holders anticipating excitement on the back of the GDXJ Q4 underlying index review are going to be disappointed. Three small additions to the index (Artemis Gold @0.68%, Arizona Metals @0.42% and Prime Mining @0.34%) and one deletion (Freegold Venture, was 0.08%) mean that GGP's weighting is basically unchanged at 0.80% (+0.02% vs yesterday).

As is typically the case with cap-weighted ETF's favoured by "tactical traders", daily net creations/liquidations will have a much greater effect on the ETF's holdings than quarterly reviews. When GDXJ itself is growing it will be buying GGP, when it shrinking it will be selling. The daily flows are far more relevant than the quarterly reviews, and will likely obscure the impact of any weighting changes.

@JoeBloggsUk - GGP itself can’t be bought without 75% shareholder consent. A sale of part (or all) of GGP’s interest in Hav might or might not require shareholder consent, depending on the size/materiality of any such proposed transaction vs the 5 class tests.

@sandgrounded - Private investors could organise themselves to have more of a say than they do today through a shareholder action group or similar, although I’m not sure this could be done effectively after a transaction was notified. If someone wants to do this, they should probably get on with it… https://www.sharesoc.org/Shareholder%20Action%20Groups.pdf

@Tildo - in the event of a £1.5bn offer for the remaining 30% of Hav shareholder consent would be sought. It’s hard to see approval being given without some commitment to a special dividend (or buy-back..?).

@Matty - any shares accumulated before an offer *could* have an impact on the level of an offer. Simplistically, if you buy shares in the three months before an offer is announced, your offer cannot be on less favourable terms. I think that C is most likely only because it is probably the “safest” option for NCM - it avoids a lot of the noise and risks associated with a full offer. GGP might push for a full offer to be made though… All part of the negotiation game! You are right that NCM holds the whip hand with respect to third parties.

@JiffyBag - I agree that GGP can sit tight, as long as it has the financial resources to meet its JV commitments. NCM could choose to be less accommodative in that regard, although the eyes of the mining world will watch how it treats GGP. It’s a tricky balance. In terms of the timing of a valuation, don’t forget that NCM has a mechanism (via the option for the last 5%) to “force” a valuation during the next 12 months. I would expect GGP to seek a premium for the remaining 25%, although the 5% would be a line in the sand from which anything further would be measured.

@Floater - a lot will depend on whether NCM are happy to stick at 70%. If not I would expect them to move (one way or another) for the remaining 30%. This process will start with the optioned 5%. If the value of the remaining 25% is increasing NCM will likely be motivated to move sooner rather than later. All part of the great negotiation….

@Kieffy - I’m sure SD will be looking for a great deal for GGP shareholders. The process around the optioned 5% could be the starting gun for NCM. Remember that the JV agreement says that an independent valuation will be used if agreement isn’t otherwise reached. Such a valuation would be binding for the 5% should NCM wish to proceed.

@BiggL - I don’t think the offset provision matters other than to NCM. It means only that any loan balance is cleared before proceeds can be used for other purposes. I’d expect that to happen in any case.

As there has been a lot of discussion today regarding the possibility of a “takeover”, I thought I’d offer a few comments outlining what this might mean.

Essentially there are four scenarios to consider:

Scenario A
- In this scenario NCM makes an offer for 100% of GGP’s shares
- In many ways the simplest scenario, and perhaps the one most LSE posters have in mind
- GGP’s board are required to notify shareholders if “…a firm intention to make an offer…” is received
- the oft-repeated notion that an offer would have to be above the highest SP in the last 12 months is mistaken
- 75% acceptance from all GGP shareholders would be required to proceed as a “scheme of arrangement”
- the remaining minority shareholders would be squeezed out


Scenario B
- In this scenario ANO (ie not NCM) makes an offer for 100% of GGP’s shares
- In procedural terms this follows the same path as Scenario A
- BUT… there are likely to be “change of control” (or similar) provisions in the JV agreement
- ANO would want to know that NCM would honour its JV commitments, and would include this as an offer condition
- NCM might not want a new JV partner, and could therefore use its majority interest in the JV to frustrate ANO
- As a result I think the “bidding-war” scenario sometimes discussed on this board is unlikely

Scenario C
- In this scenario, NCM agrees with GGP a price for its remaining 30% interest in Havieron
- The usual “class tests” would be applied to determine whether such a disposal would be a “substantial transaction”
- The class tests examine 5 measures: Gross Assets, Profits, Turnover, Consideration & Gross Capital
- A substantial transaction is one which exceeds 10% in any of the class tests. It triggers a shareholder notification
- A scenario C disposal IS likely to exceed the 10% in one or more of the class tests, so notification would be triggered
- But… only a disposal exceeding 75% in any of the class tests requires shareholder consent
- Based on today’s figures, a disposal at <£425m could be below the 75% level on all of the class tests


Scenario D
- In this scenario, ANO agrees with GGP a price for its remaining 30% interest in Havieron
- The likely “change of control” provisions outlined in Scenario B would apply here
- these could (for example) give NCM a right of first refusal at the same price…
- …or provide other ways for NCM to frustrate the introduction of an unwanted new JV partner
- As a result I think this is fraught with difficulties

As always E&OE with constructive questions/corrections welcomed.

FWIW, I think that NCM will want 100% of Havieron and that scenario C is the most likely…

@GGPThruandtru - your point about a takeover of the Hav project rather than of GGP itself is why I said I would check very carefully on the legal framework. This is a question of whether the class tests (part of the AIM listing rules) afford effective protection to shareholders in the circumstance you outline. I have asked an expert.

SD wasn’t responsible for the valuation bubble inflated late last year. He can hardly be blamed for its subsequent deflation.

Objectively he has three priorities:
1. Delivering results and progress on/in/under the ground
2. Managing the mission-critical relationship with NCM
3. Strengthening the company’s shareholder base and finances
Objectively he is delivering against all of these.

This boards enduring fixation with the transient 38p valuation is deeply destructive. It anchors so many conversations here - on valuation, on management performance, on price action/“manipulation” etc. This will - sadly - continue until a critical mass of posters recognise the anchoring bias it is fuelling.

Rotherby - many insto investors effectively sub-contract their voting to service providers who vote mechanistically along corporate governance best-practice lines. That's all that has happened here. As (partially!) explained by the Chairman. This doesn't worry me.

To clear up the discussion on resolutions 7, 8 & 9.

Res 7 (an ordinary resolution, so required 50% of votes cast) gives the directors authority to allot 1.25bn new shares, a little over 30% of the existing shares in issue.

Res 8 & 9 (special resolutions, so required 75% of votes cast) give the directors authority to allot some of those 1.25bn shares [I am not sure whether 200m or 400m as the legalese gets complex around whether the 200m’s should be added together or not] without offering them to existing shareholders first.

It’s the latter figure (200m or 400m) that matters to existing investors, as this defines the directors scope for what LSE investors call dilution.

I don’t think this is unusual, or particularly worrying. Many companies have similar provisions.

Chairman doing a reasonable job of explaining the allotment and pre-emption disapplication resolutions to a shareholder who perhaps doesn't have enough knowledge to pursue his line of questioning....

That's a close call for Alex Borelli on proxy votes..!

347m for vs 334m against

Interesting question @GGPThruandtru. The futures curve for gold shows backwardation only in the very front months. Otherwise it is clearly in contango. I'm pretty sure that was also the case at September 2021, so it's hard to rationalise the description of their sliding scale as "consensus pricing"... I suspect that Altus would tell you - if pushed - that these are their own conservative assumptions, rather than any form of deliberate forecast.

See here for what the futures market says: https://www.denvergold.org/precious-metal-prices-charts/gold-futures-curve/

The Dec '25 and later contracts all trade above USD1900/oz

Manipulation? Some other possible explanations include:

- some sell trades went through that are subject to deferred reporting
- there weren’t actually 2.4m more buys than sells (we know the “reporting” of this is flawed)
- a sell order is being worked
- one or more of the MM’s thought that reducing their quoted spread might win them some flow

Either you are clued-up on how the market works and your post declaring “Manipulation at it’s finest” is a deliberate attempt to mislead. Or you don’t have a clue and are just mistaken . Which is it?

@Bamps21 - when you say “…more ounces can be added to the accounts…”, you mean added to the JORC Resource and Reserve Statement don’t you?

Balfour Beatty has a mature shareholder base with most of its shares in the hands of genuine institutions, the top 10 of which own 40-something% of the company. It’s a FTSE250 company with an ownership profile that is in no way comparable to GGP. No meaningful comparisons can be made regarding trading patterns..!

I sold my UFO holding back in May at 1.2p after the company revealed it was proposing to use funds from a placing to purchase an asset formerly acquired privately by some of its own directors. Related party transactions are one of the tried and trusted mechanisms for siphoning £££ from AIM investors, and - as I posted on the UFO board at the time, long before Tom Winnifrith picked up the story - I have zero tolerance for opacity where potential conflicts of interest are concerned. The proposed purchase was subsequently dropped after further adverse publicity, and UFO’s SP has fallen by nearly 50% from that point. Clearly this has created some sore losers amongst that boards resident ramping community…

For the record once again I am positive on GGP, and added to my holding in the recent placing. I am less positive on this boards resident rampers, and will continue to offer a grounded alternative to their self-serving nonsense about manipulation, shorters, paid trolling gangs etc. History will say that the rampers who roared on the spike in GGP's share price a year ago created the conditions that have led to many private investors being hurt by their investments here.

Thank you Zoros. I agree!

The negative sentiments that dominate discourse on this ‘board are artefacts of the anchoring bias created by the spike, and will only be undone by significant recycling of the shareholder base over time.

Anchoring is the underlying cause for the endless posts about “… why so many still think the SP is currently underrated... horrible year for the SP… Market manipulation holding the SP back… Shorting causing the SP to stay low…” etc

To these you can add all the comments about how badly SD has done, about how the SP will “spring back” when “they let it go” etc etc etc.

Look through the words and you will see that ALL these expressions are framed by an implicit comparison with the transient spike high. Very little thought is given to the reality that GGP is a tiny company (17 employees?) valued at nearly £600m despite not being expected to produce any gold for several years. By most objective standards, the SP/MCap is high not low…

I think you also have to look at the starting conditions. GGP was massively overvalued at the start of '21 on the back of the mother-of-all-ramps coupled with a uniquely price-insensitive buyer in size. It's taken/taking (depending upon your point of view...) a long time for the bubble to deflate. In the process a lot of investors have seen their dreams punctured, and their pain is visible here daily. Well over 5bn shares have changed hands this year at a VWAP >21p, so many many hold parcels of shares that will need +50% from today's SP before they are above water.

The first rule of Italian driving applies now though... https://youtu.be/fDaONrHK1f8

ETF's are an awkward passenger when they are among your largest holders, particularly if its an ETF that sees cyclical expansions and contractions. When these two factors combine the activities of the AP's can create distortions.