Member Info for TakingMyTime

Hello, E1. No stealth, I think. If you look at the listing of owners, you'll see a long list of high powered institutions. That list does include State Street but also others.

So, it looks like a bunch of institutional investors who use State Street have been adding to their positions, and because of the custodial arrangement, it all gets rolled up. JP Morgan adds a little, Nataxis adds a little, State Street adds a little in funds they manage, Northern Trust, Societe Generale, Citibank. It adds up. When the institutional world starts to wake up to a share, it's not surprising to see a custodian's holding move quickly as their custodial clients get on board.

We might see some of these start to show up outside the custodial arrangement, too. These big institutions have loads of funds, and their various fund managers may want to get in on the action. Not all of them will necessarily be operating through a custodian.

I think I've talked about State Street before but perhaps not.

They are investment advisors and so own shares for the funds they manage. But they also are a custodian bank. They hold the shares that other people own. So shares for which Arrowstreet and JP Morgan and Northern Trust and a whole lot of other institutions are the real beneficial owner are held in State Street's name. If you look at the RNS you'll see that.

State Street doesn't really own 5%. They legally own them but contractually they aren't theirs. They just handle all the clearing, settlement, disbursement of funds, etc, for their custodial clients. Saves those clients some of the red tape / logistics in exchange for paying State Street a nice little fee.

When you see State Street as a 5% owner, that tells you that's 5% in the hands of institutional investors, but not necessarily that State Street actually owns them.

It's pretty straightforward. There's no formula for calculation because there are too many uncertainties. There are general guidelines / factors to be considered.

Take free cash flow after taxes.

Subtract expected capex. How much is that? It's a guess.

Subtract reserves needed for unexpected expenses (like, say, higher fuel costs if there's a war shutting down the Strait of Hormuz). How much is that? It's a guess.

Subtract anticipated drilling / exploration costs. How much? A guess.

Subtract reserves needed for potential merger / acquisition activity. A guess.

Now you have a guess as to what you might want to return in capital. Do you believe the share price is significantly too low? If so, the company (and therefore shareholders) likely will benefit more from a share buyback than from a dividend. Ah, but will paying the dividend boost the SP up to an appropriate price? If so, maybe the dividend is better after all. What is the tax impact for shareholders of a dividend vs. share buyback? Figure out what's most beneficial to the company and its shareholders. Maybe it's all dividend, maybe it's all buyback.

Should you return all of that capital? Depends. Will you be able to maintain the dividend? It's better to maintain it than to pay one big dividend and then have to cut it.

Does retaining too much cash make you vulnerable to a hostile takeover from someone who won't run the company well but wants to raid the cash? Maybe you push the dividend a little higher than you would have.

Does disbursing too much cash leave you vulnerable to not being able to respond quickly when one of the neighbors finds gold and wants to sell to you? Maybe you retain a little more than you would have.

Those are just some of the considerations. You can't put a precise number on any of it. There's no formula.

LOL. Well, we think 'great minds.' Other people may think differently about us!

(Beat you by five minutes, though, I'll take the time trial win.)

We're not an explorer anymore. We're a miner. We're making millions every time I blow my nose. We have real, proved up resources. This is an exciting hit, but it's not proved up. We're not the kind of company that will multibag on a single drill hole, even a good one.

Could we be looking at 10 moz or more? Absolutely. And if so, it will put rockets under the SP. This is great news.

But stop expecting our SP to respond as if we're a junior explorer. Those days are gone. The institutions that have been driving the SP higher aren't going to just decide to throw millions at this share just because of a single drill hole, even a very good one. Give it time and a few more drilling results and if this turns out like it might, we'll see a rerate, and lots of fun.

Maybe a word of caution re: OC and the speculation about a special dividend.

There are multiple ways to do a deal. The best way may not be an outright sale with a big cash inflow all at once. If that happened, it probably would mean a special dividend (unless there's another gold mine we want to buy with the cash, then maybe not).

An alternative would be a JV where the venture partner does the mining, accesses Telfer infrastructure synergies, and we get a big chunk of royalties as the tungsten is mined. That could give us exposure to the ongoing upside in the tungsten price, keeps the venture partner from having to put out a huge chunk of cash up front, and other benefits as well.

This would not mean an early special dividend or even an early contribution to regular dividends starting up. It would mean larger dividends over the long term, once the tungsten mine is producing. It would mean an immediate boost in SP, and as the mine moved through the process until production, further boosts along the way.

In the long run, this would likely be much more profitable. Probably not as good for those who can't stick with it for the long run.

NIce post, E1. Thanks for all your research over the years.

"Mh a special divi can be structured by the compamy as either capital gain or incme or a choice. It has to be set up correctly though, and preferably rnsd as so."

Generally only if it is part of a capital restructuring / merger / buyout. Otherwise, it's not capital gain, it's income. The likelihood of a special dividend resulting from the monetisation of OC being able to be treated as a capital gain is virtually nil, as far as I can see. (Disclaimer, this is not my particular area of expertise and I could be overlooking something. But I've never seen this kind of special dividend be structured as a capital gain.)

It's pretty well known that miners often leverage the gold price. So that ratio could drop even without news if the gold price keeps rising.

Add in good news to a rising gold price and that ratio can still drop a lot.

@Rotherby1 Correct. Thank you for bringing the facts. Anyone who complains about daily volatility isn't paying attention to the big picture.

I believe it is probable that the ratio will continue to move and the price of gold will also move up and hit new highs by the end of the year, on its way to in excess of $10K USD before the end of the decade (and possibly much sooner, maybe even this year).

What if an ounce (at $10K) would only buy 400 shares, rather than 470? What if it would only buy 333? Or 300?

Does anyone really think $10K / oz can't happen? Does anyone think 300 shares per ounce can't happen, with all the potential for growth in the reserves / resource?

We're still at the equivalent of 7.25 on ASX right now.

"If you were offered 60p (old terms) for all your shares tomorrow, would you take it? You cannot partial sell - all or nothing."

Only in a buyout is it all or nothing.

So there are two scenarios. One is a hostile takeover offer. The other is an agreed sale of the company where the board of directors is recommending it.

In a hostile takeover at that price, I would say no way. I personally believe the company is going to be priced at twice that (or more) by 2030, even without any more big finds, just progressing what we already know, while gold continues to rise.

In an agreed sale/merger, I would take it. I would be disappointed because I believe the company is likely to be worth more than that. But I would accept that the Board of Directors have a better read on the risks and possibilities than I do, and that (as a result of the ownership interests they hold / represent) their own interests are sufficiently aligned with shareholder interests to guarantee that they are making an honest recommendation. We're not some junior explorer where hidden deals with execs and directors can influence that decision -- there are big players here now who have too much reputational stake to risk. And there are too many institutional investors on board now for them to risk ripping those people off.

Further, if a buyout were recommended, it would mean the current management team are ready to call it quits. I'd have to respect that, and it might be that would limit the upside more than I'd like even if we continued independent.

So I'd go with the board's recommendation. If they recommend a sale at that price in a buyout / merger, I'd accept it (with some regret). If they recommend against a hostile takeover, I'd absolutely follow that recommendation.

"It turns out I was de-ramping again when I concluded it was worth somewhere between US $250 to $500m Taking my Time will be taking note."

We may have to see if we can get you banned. Disgraceful. LOL.

The hard question in cases like this is always, "What's it worth now" vs. "What will it be worth a year or two from now?" And even if it's value only goes up in line with inflation, is it better to have its value in the bank today (where it won't track with inflation) or have the inflated value in two years' time?

With tungsten, it seems likely that it will go up more than inflation. So if we sell it, it should either be to use the cash to buy or build something valuable, or to distribute the cash to shareholders so they can invest it in something that will make it worthwhile to cash out now.

I'm content to just hold it while the price goes up before rushing a deal, but I don't expect to need the cash and others might. It's a nice dilemma to face. Make lots and lots of money now, or maybe make even more in a year or two.

Buying opportunity for those in a position to take advantage. Of course, it's still over 35.5p in old shares. I suppose there's always a chance it drops lower, so there might even be better buying opportunities, but this one looks pretty good to me.

"If they buying someone selling!"

Congratulations. It seems like you were trying to use your brain when you wrote that.

"Expert investors/traders always say the term ‘free ride’ is a giveaway that someone is a complete novice in the markets. As you say it makes no sense whatsoever."

Totally right about institutional investors. But a lot of PIs, even if they know that mathematically it makes no sense to be thinking that way, still feel a sense of satisfaction to be on a "free ride". It means you've really hit a winner and your initial investment is completely derisked. That's satisfying. Does it mean you should stay in? Take more out? Put more in? That's a different question. "Free ride" is backward looking, and the right investment decisions are always forward looking. But it's not wrong or even foolish to look back and be satisfied with what you've accomplished with this investment.

@Grezzz I was surprised by your comment! Makes sense, now. Easy mistake to make.

@Grezzz "So what percentage of share holders don't understand the 'put' options, that we've purchased from our excellent cash flow? The price of gold doesn't bother me very much for the rest of the year, at least."

Price of gold certainly matters very much. Do you understand how the put options work?

"strike price of $4,200/oz (CY26), $5,000/oz (Q1 CY27) and $5,200/oz (Q2 CY27)."

That's Aussie dollars. We only exercise the put options and sell gold at those prices if the price of gold drops below that, which I certainly hope it doesn't. Otherwise, we sell at the market rate.

We make a lot of money at today's prices above what we would make if we exercised those puts. We will make even more if the price of gold resumes its upward trajectory.

If you are on LinkedIn, this guy knows his stuff and I've been following his weekly news analysis of the markets for the last six weeks. US centric but very informative as to what's going on in the markets. Obviously some of the people he quotes you'll want to take with a grain of salt but it's still going to give you insight into what people in the markets are saying and thinking.

https://www.linkedin.com/posts/jamespruskowski_hennion-walsh-fixed-income-bond-brief-activity-7451985157827452929-dtUX/?utm_source=share&utm_medium=member_desktop&rcm=ACoAAAG4KW8B8IB5d83Oh9RfRBA4XiooIH1Go4U

14.23 AUD, about 7.54 GBP.

Despite "peace" talks collapsing. I think we're soon getting to the point where the markets start to shrug about the war. If it all actually ends there will be a surge in the markets, but I'm guessing panic fatigue is setting in, and gold (and miners) are going to be more stable and maybe even start to move up. Oil moves are less pronounced with good or bad news now. The market starts to focus more on the fact that companies are (or aren't) making money and less on what the latest and greatest (or worst) news/rumors out of the current panic factory are. The current panic factory is Iran and it's always going to have an effect, but there's still lots of oil elsewhere and not too many people think it's going to $300. Ultimately, with gold, no matter what happens in Iran, there's still inflation, and there's still high demand for gold.

Of course, good results / news for GGP is likely to push us higher even if gold / miners don't move broadly higher. But if they do move higher, it's going to just make our good news have greater effect.