Member Info for StarBright

Lol indeed. Last two trades were for £1.04 and £8.67 respectively....

Just to extend this a little - in case there's anyone interested in how GDXJ might impact upon GGP going forward - we are now in a situation where flows in/out of GDXJ are more important/relevant than periodic rebalancing. If GDXJ attracts material new capital (from investor subscriptions) it will need to buy GGP in the market in order to maintain it's weighting. It will of course be buying other index constituents at the same time/rate, but for holders of GGP this is likely to be a positive.

Also worth noting that the main (non-UCITS) GDXJ ETF engages in stock lending. If the much discussed short gangs so beloved of LSE posters are operating here, it is likely that GDXJ is part of the market structure(s) supporting their activities.

Rebalancing for GDXJ is driven by changes in the composition of the underlying index - in this case the MVIS Global Junior Gold Miners Index. This index adds and deletes constituents on a quarterly basis, based upon a set of criteria, essentially:

- Full MCap of at least 150 mln USD.
- Three month average-daily-trading volume of at least 1 mln USD at a review and also at the previous two reviews.
- At least 250,000 shares traded per month over the last six months at a review and also at the previous two reviews.

GGP continues to meet all of the criteria comfortably, so isn't in any danger of deletion. It is probable that GGP was already held at its "full weight", in which case the periodic rebalancing process is unlikely to generate a material weighting change. If there is no weighting change within the index, then GDXJ (the associated ETF) won't need to implement any rebalancing trades in GGP.

It is interesting to note though that GGP is the second worst performing component on a YTD basis..!

Fortunately, neither that nor "...gold and general mining stock sentiment changes..." are of any relevance in the rebalancing process.

TLDR; the quarterly rebalancing of the GDXJ portfolio is highly unlikely to impact the SP of GGP

Aus corporate tax rate = 30%

Russky - no-one is being deliberately kept in the dark. Why don’t you read the article I linked above? It explains why what you propose can’t work.

I bought another 50k at 12.3p

Well I'm happy to add at this level, so have been nibbling.

It's an extraordinary story. I sense incompetent government, but also misguided zeal from Jolyon Maugham and his GLP.

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

There is no fraud or criminal act. Your platform executed a buy order for you under the mid-price, that is all. You should be pleased to have paid less than others transacting at the same time did....

Don't pay too much attention to the half-baked conspiracy theory nonsense posted here continuously with respect to market makers.

Excellent info & discussion - most appreciated.

The HL vs CIL decision is explored in reasonable depth in the scoping study https://www.coragold.com/wp-content/uploads/2020/01/Sanankoro-ScopingStudy-Full-WAI-Final-V3.0.pdf The conclusion there is that CIL becomes a realistic option at recoveries >70%

A few of the mining companies I follow / invest in have reported higher capital costs for projects post-covid. In part because of increases in the price of materials - steel etc. I wonder whether this theme could play through in the construction of a leaching plant?

I agree that positive revisions from the drilling programme might drive a re-appraisal of what is possible here. Let’s hope so!

Thanks. I agree on the alignment of interests point (as I said in my 16:04 post). I note that "The Quirk Family are potential beneficiaries of trusts that own around 34% of Cora Gold through Brookstone Business Inc and Key Ventures Holding Limited.". In the long run I am sure that their interests are maximised via CORA's SP.

It's an interesting idea that the term sheet might not apply though. I can see all sorts of potential problems were it to be re-negotiated on terms perceived to be less favourable for CORA's ordinary shareholders. My instinct is that such a re-negotiation would be inherently distributive, ie it would be hard to come up with a revised structure that benefitted equally the finance providers AND the ordinary shareholders. I guess it's not impossible..!

It would be interesting to know what the "other matters" referenced in the conditional statement below (from the term sheet RNS) are.

"This is conditional on, among other matters, the completion of a Definitive Feasibility Study ('DFS') on the Project before the end of 2021."

I'm not trying to pick holes. Just to understand properly where equity holders will stand if/when the Sanankoro and other projects prove to be hugely succesful.

Legalwolf - the TP note from 15/6 contains the following comment on exploration targets and potential NPVs...

"Potential value of exploration Success
At a gold price of US$1,750/oz the post-tax NPV8 for the project is around US$62.2m based on the oxide resource estimate of 233,000 ounces. Should Cora be able to increase the size of the oxide resource by 30% to 50% would we expect to see an increase in the NPV for the project greater than 30%-50%, c. (US$81m to US$93.3m), without taking into account any other potential economic benefits from a change in the processing flowsheet.

In the medium-term, should Cora be able to establish the lower-end of the exploration target, the project’s value could potentially be four-times as large, c. US$250m, and should Cora be able to establish the higher- end of the exploration target, the project’s value could be around eight-times as large at around US$500m.

Cora still has a large amount of work that needs to be successful before it achieves this level of value at the project, but Sanankoro clearly has the potential to be a very large deposit and could also prove to be very valuable."

Yes - the Quirk family are on both sides of the see-saw, to the extent that the financing package was disclosed as a related party transaction. I'm not sure whether their own outcomes are best suited by a higher or lower SP at the point(s) of issue. On balance, I suspect that all shareholders interests are best served by a strong SP driven by further "scintillating" drilling results. The existing shareholders also subscribed for equity in the June '21 placing. I am not deterred by the substance of the financing package as a result.

It would be nice to think that holders can sit back and wait for drilling results whilst adding on weakness. To get there it's important to understand the capital structure of the business as well as the drilling programme. I pretend no expertise on mining/drilling..!

Legalwolf - I've not missed or ignored the recent drilling results. I'm just trying to clarify the impact of the (somewhat complex) mine financing package.

AG1989 - yes, 20% looks v reasonable. If the SP is higher, then - as you say - dilution will be lower. That does represent a conflict of interest for the providers of the financing package though. They will end up with a greater % if the SP is low at the point(s) that shares are issued.

V interesting....

So if - in back of an envelope terms - the DFS was produced with the SP at 14p...

1. The equity financing component would lead to $6m / 1.4 * 13p = 33m new shares issued
2. The CLN could be be converted into $5m / 1.4 * [13p+30%=17p] = 21m new shares issued
3. The debt interest and royalty can just be considered to be annual/recurring expenses

So a total of 54m shares to be issued per the term sheet (effectively 20% dilution) for funding the $21m (£15m) cost of constructing the Sanankoro mine.

The Sanankoro project is NPV positive based on the current resource estimate of 265k oz, which *may* be upgraded by the drilling programme currently underway. AISC estimated at <$1k/oz. DFS is scheduled for late 2021.

What I have missed / misinterpreted?

Are you buying some CORA MasksNewNorm..?

Rather than wait for a quote (which might not materialise) why not place a buy order with a limit price of 17p..?

It's very common for trades to get filled at better prices than those quoted for online for market orders.

Nice rise! Might be enough to attract Degsy and co...

<£90k traded all day today in total at a VWAP of 19.23p is hardly "quick fire panic selling"...

HH - I agree that defining "normal" is the problem in such a discussion. My observation (see my original post) is that GDXJ has lost touch with XAU, with which it has been strongly correlated for many years. The 5-year version of my chart better shows the gap that has opened up: https://thumbsnap.com/ptrr1d1J

Absent a structural explanation for why this gap has opened up and why it will persist, it seems reasonable to view the sector as undervalued at this point.