Member Info for StarBright

The number of shares in issue makes no difference whatsoever. But the lower market cap of CORA means that adding (say) £70m of value will treble its price vs adding 10% to that of GGP.

I won’t comment on whether one is a “better” investment than the other.

Final drill results from Selin demonstrate continuous 3.4km long ore body

Cora Gold Limited, the West African focused gold company, is pleased to announce the thirteenth set of drill results from its largest ever +40,000m drill campaign at its Sanankoro Gold Project ('Sanankoro' or 'the Project') in Southern Mali. The drill results have continued to be extremely encouraging throughout the campaign with high-grade results in generally shallow oxide ore. An updated mineral resource estimate ('MRE') is expected in the coming weeks after the final set of drill results have been published.

HIGHLIGHTS
· Latest results from Selin deposit delineate a continuous ore body of 3.4km strike length which remains open in all directions, intercepts include:
o 18m @ 2.32 g/t Au from 86m in hole SC1051
o 18m @ 2.29 g/t Au from 146m in hole SC1032
o 16m @ 2.15 g/t Au from 90m in hole SC1090
o 24m @ 1.13 g/t Au from 91m in hole SC1087
· Results infill a 300m gap between the existing pit shells at Selin
· +700 metres strike length of new surface mineralisation proved in this drill programme
· Several new hanging-wall ore shoots have been discovered parallel and within 100m to the west of the existing Selin ore body
· Selin resource remains open in all directions, since the 2021 drilling was focused on Measured and Indicated (M&I) conversion proximal to the 2019 pit shells

Bert Monro, CEO of Cora, commented, "The final results at Selin from this drill programme have once again shown good quality grade and widths in oxide material. More importantly these results infill the gaps between the current two pit shells that make up Selin offering the potential to create one larger pit in the upcoming MRE update. Over this drill campaign the mineralised surface footprint of Selin has been extended +700m in strike length north and south of the previous pit boundaries which, coupled with these infill results, offers the Company encouragement in advance of the upcoming MRE.

"This recent drilling at Selin has also identified a new mineralised structure less than 100m west of the existing ore body. This is an interesting development that will need further drilling but offers yet more potentially significant upside at the Selin deposit alone."

To view the RNS with illustrative diagrams and maps, please use the following link: http://www.rns-pdf.londonstockexchange.com/rns/5880P_1-2021-10-19.pdf

https://www.londonstockexchange.com/news-article/CORA/final-drill-results-from-selin/15179760

@speedy - what do you mean by “…dealt with and supplied..”?

Here’s how this works.

NMC have an option, which means precisely that they have the RIGHT to buy the 5%. The value (if not agreed between NMC and GGP) will be determined independently by a third-party. GGP will have the opportunity to provide input to this valuation process, but the what the third-party says will stand. NMC will be able to proceed at this independently determined price, regardless of whether GGP are happy with it or not. Neither the GGP board or its shareholders will be able to prevent a sale at the independently determined price if NMC wish to proceed.

In practice I expect that NMC and GGP will do all they can to avoid a dispute. The two companies appear to have a close and continuing relationship that is mutually beneficial. They are likely to wish to sustain this. I do not expect the process or any resultant transaction to be controversial or a source of conflict. Other than on this ‘board of course..!

Colin1’s notion of free funding is not the most far-fetched fantasy advanced on this forum today.

In all honesty I wish CEO’s wouldn’t tweet comments like this. With first production 3 years away, the spot price of copper isn’t really that relevant. Tweets like this look a bit desperate, just like the replies referencing broker valuations… All IHMO, of course.

@speedymeadie - the conjecture is your statement that the "...gold/silver price is being held down to help...". This is only a hypothesis as to price action in PM's. It is a hypothesis repeated often in the PI world, but the plural of anecdote is not fact. The hypothesis attracts little support from professional investors other than those who also happen to be salespeople for PM businesses. It's too great a stretch for me because I don't believe that the mainstream banks cited have aggregate unhedged & undisclosed exposures remotely approaching the magnitude required for it to hold true. Nor do I believe that the level of capital and collusion that would be required is achievable.

If you are correct, we'll find out in early next year and I will eat a humble pie hat for you..!

They use a model that looks at analysts free cashflow estimates and converts these to an SP using a discount rate derived from a risk-free rate and an equity risk premium. It incorporates a perpetual growth rate driven terminal value, based on UK long bonds.

The minor variations seen and commented upon here arise because of market-driven movements in these rates. It’s just a mechanistic computation.

The principal criticisms that might be levied at their approach are:

1. Their model is intrinsically suited to established business with stable cash flows, a very different situation to exploration companies. This also affects the appropriateness of the input rates they’ve chosen for the discounting, perpetuity and ERP components of their calculation.

2. Their isn’t enough data to support their approach. They have a 10 year + perpetuity model, but only have analyst sourced inputs for the first 3 years. They include unexplained/unsourced estimates for years 4-10. The perpetuity alone assumes that GGP will go on producing forever, and represents over 80% of the value they propose!

My opinion is that this approach doesn’t work for GGP, so I don’t regard the output as useful.

@speedymeadie - I enjoy your contributions here, but wish you would distinguish more clearly between fact and conjecture. Especially when responding to (obviously) inexperienced posters.

Your first three sentences are conjecture. They represent your opinion, and could have been flagged to indicate this. “MANY BELIEVE that the gold/silver price is being held down to help the bullion banks reduce their short exposure($450billion ). This MAY be resolved early in the new year and all pointers are for a much higher price. To take advantage of the coming profit potential, ANOTHER OPTION MIGHT BE to invest in GGP.”

The remainder of your response is very factual and contains some good advice.

Please don’t take this as a criticism. It’s really just an illustration of a general point - that experts should always distinguish clearly between facts (what they know) and conjecture (what they think). This discussion board is full every day of posters presenting entirely unevidenced claims as cast-iron facts. The endless posts on “shorters closing” are a prime example. All it takes is a little precision with language.

The principal difference between the Hannam valuation and those promoted consistently by the “tried and tested sources” that curate discussion on this board is that the Hannam version incorporates the impacts of taxation and the time value of money. These two items have a material impact on the NPV, perhaps reducing it by 30-50%. This is why the Hannam sp target is SO different to those proposed and discussed regularly here, even with similar starting points for production, POG etc.

The good news is that with these numbers properly included, there is still a strong case for investment in GGP at or around the recent trading range.

But the last time a poster (not me in this particular instance) pointed out that tax and the time value of money have to be considered, this is the response they got from one of the principal posters here:

“The former is never taken into account for any NPV's because it differs, dependent on the personal circumstances on the company paying that tax and any offsetting it has, or credits. Silly idea mentioning tax??
The latter.....sorry, don't speak Irdu.”

I don’t understand why posters with paper-thin knowledge of financial modelling persist in making unqualified assertions like the one I have quoted above. Anyone with capital markets experience reading that particular quote would know immediately that its author is a long way out of their depth.

Havieron looks like an amazing discovery - I am fascinated by it and enjoy/benefit from the excellent geo/mining knowledge shared daily on this board. But demonstrated expertise in one domain does not translate readily into another, and the relatively under-developed discussion on valuation here shows this consistently. Shareholders should take care to ensure that they are invested in the company and not only in the assertions of its most enthusiastic supporters, some of whom are swimming naked where financials are concerned.

Yes Kevin. Any post/poster not referencing the forthcoming £5 party etc should be immediately set upon in full "burn the witch" pile-on mode.

We do Speedy, but the AISC is effectively included within the MCap/SP. If the AISC were higher, the expected profitability would be lower so the MCap would be lower. You can’t have a calculation that includes both AISC and MCap as variables.

@Speedy - using your numbers if GGP is valued at GBP700m that’s USD960m for all 6m oz, or 960/6 = USD160/oz.

I’m not sure where AISC comes into this particular calculation.

@Speedy - could you lay out the steps involved in your calculation?

Agreed. For me the underlying issue is the lack of transparency. This in itself creates opportunities for those who like to promote and sustain conspiracy theories. Some sunlight might do just as much - if not more - to reduce the opportunities for manipulation of both price and naive market participants.

This is a complex topic, and I make no claim to deep personal understanding. I did though discuss (in late August) the impact of Basel III with a former colleague who ran (at one point) a high-profile precious metals fund. He said:
- don't be quick to accept the hype on this topic as it is being driven HARD by the marketing teams of retail bullion dealers
- retail is a massive market in the US where gold ownership is tied-in with gun-toting Trump supporters etc...
- as with every narrative the retail dealers have pushed over the years, the outcome is always PM prices roofing
- there are equally credible arguments that such changes might force the POG lower
- the wholesale/professional market doesn't see either as likely
- specifically the banking sector is heavily researched/analysed and it is not credible to think the potential balance-sheet impacts have been missed
- everywhere but London implemented the NSFR changes in June 2021 (*this was news/surprising to me)
- London was scheduled to implement the changes in Jan '22, but an "exemption" has been secured
- the scope and duration of this exemption remains unclear
- the exemption may be subject to challenge as it confers a material competitive advantage on the London market
- story is still developing and should be watched

My take is that the popular narrative on the PI "circuit" is over-simplified, and can be discounted.

DYOR etc.....

DGR1980 is 100% correct. The characteristics of the shareholder base makes any sort of takeover extremely unlikely. Can you imagine the discussion here..!?

I agree. Keeping an eye on SoP for NCM might be worthwhile though. At some point it might offer [comparatively] cheap access to the economics of Havieron. One to watch. I'm certainly not contemplating (much less advocating) committing capital there at this point.

Great / thanks. That's extraordinarily helpful.

Telfer today generates about 20% of NCM's gross economics in FCF terms. Using the estimates you've provided and removing Telfer, 100% of Havieron might represent closer to 33%, or 24% if GGP retains its 30% one way or another.

NCM equity owners will be interested in 70% of the Havieron production + (critically..) exploration upside. If Havieron is ultimately driving 30% of NCM's value then effective exposure through NCM is 21% vs 30% via GGP. Possibly a case for owning some NCM alongside your GGP holding, especially if Hav were to be mis-priced "within" NCM at some point. GGP owners worried about NCM somehow increasing its interest in Hav at a bargain basement price through a distributive/opportunistic deal, could hold some NCM as a partial hedge.

The underlying point for those fascinated by the potential at Havieron is that NCM's equity might offer meaningful exposure too, because Havieron may be a large component of NCM's business going forward.

73m @ 2.24g/t from a shallow hole is a GREAT result...