The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
My initial response: meh. Only four new holes. Wake me up when you have something to report.
My Don't. Be. Stupid. response: A) We're bulk mining the northern breccia, which is extended. B) WE'VE EXTENDED THE SE CRESCENT! C) We're still open in every direction we were open in.
My market-expectation response: The market will probably be stupid, or at least enough traders will be that they'll define what the market is for GGP. Potential buying opportunities in the morning.
But I know nothing.
@Jerry "TmT. I am not sure that NC would be overly pleased to find out that ggp was the consolidator in the Paterson. I think that they would think that is their job."
Perhaps. But it would simplify things if you have a hit that straddles the Hav / ARV line to have only two owners, not 3. And it would be complicated if half of it were 100% owned and half 70% owned, and simpler if it were all 70-30 or 75-25.
We're talking complete hypotheticals, of course. None of this is at all likely, in my view.
@spudimminent "Could you please confirm and maybe TMT suggest what Newcrest would think were we to attempt a tie-in or indeed a buy out of ARV"
I don't have a clue what they would think. I can only guess that NCM would be quite happy if an ARV target hit and it was controlled by a company with which they have such good relations.
Not sure how we'd buy ARV, though. We could sell part of Hav to someone like Franco Nevada, we know NCM wouldn't like that. I'd guess if we bought ARV it would be entirely an equity transaction, basically we'd give GGP shares for ARV shares. We'd almost certainly have to list on the Aussie exchange.
Effectively we'd be selling part of Hav, one way or another. Do we want to do that for ARV? Maybe. It certainly would simplify things if we have a cross-border hit with them. I'd guess "simplify" would be appealing to NCM as well.
Total speculation. I think we're looking for acquisitions but not sure ARV is the right target.
@Janus "I know what I’m doing here and I’ll be buying more tomorrow. As I have done on previous results."
I am not smart enough to know what the SP will do tomorrow but I also have cleared some funds and am prepared to buy if it drops at some point in the day. I mostly expect it will, based on past history.
I tell myself this would be a short term trade rather than a long term increase in my core holding. My past history suggests that every short term trade I've made in GGP ends up getting added to my core holding and not sold. :)
Trending towards a 5 star rating, too. Given the history, that's great news. If that holds for the year, the news reports will have to be very positive, which can only help.
This remains a long term hold.
@panama, thank you for the very nice post. Positive memories are invaluable.
I'm in a good place, don't worry about me. When God closes a door, He opens a window. I think I've found the right window for moving forward, that's all. I'm in the process of collecting advice from trusted advisors as to that future path. When/if it becomes clear, I'll let my friends know. ATB to you and your family.
I see it, Greggie.
@Bamps. "Have you got to isolate when you come back?"
Very sneaky, trying to find out where I am! I think just because of that I'll stay until all travel restrictions from everywhere are lifted!
I can't imagine I'll be as active here as I was at some points in the past. My world is different now, in a lot of ways, and still changing.
@chester
"My hope is that Havieron continues to expand in size and it becomes to expensive for Newcrest to buy it."
My hope is that it expands in size clear into the neighbour's territory, LOL. But it will never be "too expensive" for NCM to buy. If they are borrowing to buy a mega asset, everyone knows they are world leaders in developing those assets. In the last year they had no problem at all borrowing loads of money to restructure their debt. The American bond funds will knock themselves out to throw money at NCM if they are doing a leveraged acquisition of a mega-Tier1.
My hope is that it gets so big that NCM shrugs, and says, "Well, it would be nice to have it all but our share is Tier1 already, so no need to be greedy." Hopefully they'd be content with 75% of 40 moz + Cu. :)
@chester "Could Newcrest come up with $2b or $2.5b to buy just Havieron ?"
Easily. They would have no trouble tapping the debt markets for that kind of money to buy a Tier1 asset.
Whether they would decide it is worth it or not is quite another question.
I worry a little bit about people investing here on the assumption that NCM (or someone else) is going to buy Hav or GGP as a whole. They've said nothing to indicate they will. As a general rule, one should avoid investing based on assumptions about what other companies are going to do unless they've said something to give strong indications.
It's one thing to say you hope there's going to be a buyout. It's another thing to assume there will be.
Hi, Bamps, yes, still abroad for a couple more weeks, probably.
I still wouldn't rule out a small placing or rights issue, but debt financing to bridge to the sale of the 5% is certainly possible, if needed.
GH always said he wanted to use debt raising, not equity, but he doesn't call the shots anymore. I don't expect major equity raising but am ready for a small rights issue.
@Bamps FS vs PFS, you are correct, my mistake.
@Dave, I doubt anyone lends to us on our track record as an explorer. The evidence that one great find makes an explorer likely to get another is about as thin as the evidence that I'm Donald Trump and you are Kim Jong-un. Banks lend on two things -- proven reliable income, or proven reliable assets. Fortunately, by the time we need money, we should have a sufficiently proven reliable asset at Hav. But even if we have some very good looking drill results elsewhere, I wouldn't expect banks to lend to us on that basis. They'll want a loan secured by our share of Hav. All IMO, of course.
I agree with GGPT&T that we are unlikely to sell Hav.
Sandeep has said many times that NCM has a clear path to 75%. As an NCM investor, after all the times he's said that, I'd be shocked and disappointed if they didn't take advantage of that clear path.
That's also an implicit acknowledgement that they don't have a clear path beyond that, right? In my view, as I've stated before, if they wanted to pay the necessary amount to 100% own Hav, or to take out GGP entirely, the time to do that was last summer, or at the least, before they provided Hav financing.
They've provided sufficient financing to get us to the PFS, but not really beyond that.
Nothing is certain but everything is signaling that they intend to exercise their option and acquire the 5% at FMV.
No one knows how much that will be, though the recent Tropicana deal sets a nice market for the FMV of gold in the ground in a good jurisdiction. I don't expect it to be that high since we aren't in production but hopefully that pulls it higher than it would have been.
I do expect it to be sufficient to cover further development of Hav plus general expenses and exploration expenses for some time. It WON'T be enough to cover our share of drilling costs if we hit big somewhere in PRE and need to stick lots of holes in the ground, and then pay our share of developing a mine. We'll probably need further financing to develop a mine at Goliath or somewhere else. But that's a great problem to have.
For anyone who considers themselves a holder for the long term, Tymers is asking a good question. It's a question that had no good answers for SXX, with drastic consequences. In my view, the answer for GGP has come out of Sandeep's mouth multiple times. As a back up, we know from the Solgold story that Franco Nevada likes to come up with finance, too. That's a good option if NCM decides not to take the 5%. Bank financing would most likely be available as well.
I'd be of the view that any IIs that are going to bail on coal would have likely done so already, and therefore any of that is already baked into the current Evraz SP. Once the demerger goes through, you'll have a steel company and a coal company. The steel company should be able to clear some of those ESG constraints and see some upside as a result.
The coal company will certainly have ESG constraints but perhaps not anymore than Evraz as a whole does today. So sure, the fact that many IIs will give it a miss will have its impact, but that impact is already felt, so you'll be starting out with the "a bunch of IIs won't touch this" discount on the SP.
I'll be happy to hold both entities.
You are right about coal being out of favour but that doesn't mean it won't make money and produce dividends.
It's all well and good for spoiled rich Europeans and Americans to bleat on about oil and coal and expensive changes, but the third world needs cheap energy to get a decent standard of living, and I for one don't care too much about the IIs and the politics of it. My sense of morality is not based on what the press and dear Greta decide is moral, and I'm happy to own coal. So it's never bothered me to own Evraz, and it won't bother me to own both demerged companies.
But I agree that it is a good political move by the company and I hope it goes through.
Hi, Gavster. Posting less but still holding, for sure. And still reading here for sure, too.
@Qzqz, I don't mind being in coal or oil. I think it has a long future ahead. But I think it is good to separate out that which is likely to be politically targeted, so that those investors who want to take that risk can do so, and not have the main company held back by it.
@Davielad "I will make sure you are ok lol"
Where I come from, when someone says that, then it's really time to be afraid. ;)
This price is a bargain. Missed the opportunity a month ago because funds weren't free. Still expecting very strong recovery here, will double my money on today's buy, willing to wait for it for a few years if necessary.
Always figured I might top slice at 650, but I'm wavering on that. Might hold everything until 700. I think it would have to push close to 1000 before I'd sell out completely. I like this company. I think the demerger, if it goes ahead, will be a good thing, too.
LOL, Davielad, I think I'd be afraid in Glasgow, too!