Member Info for TakingMyTime

@Spy

LOL, can't stop laughing, I deserved that!

Ok, I've been waiting for a weekend and the right kind of weekend posts to come along. It's here, and so I'm bumping this thread. I know most of you have already forgotten it and are glad you did, but here it is again.

Let's be crystal clear about this thread. Right here, I provided the evidence, way back in July, that Gervaise Heddle's days as the point man in our relationship with NCM were numbered. I gave the reason, cited my source, and no one believed me. You all thought things would continue just as they had been, no changes, on and on forever. Some of you probably mocked me, most just ignored what I'd said.

But now, you scoffers, look at what's happened. GH is history, as good as GONE already, and I'm the one who told you there was trouble in paradise. I TOLD you that SB and GH were having a problem. It's hardly surprising the BOD gave GH the boot, I mean, if it bothered SB, how much must it have bothered them when they actually got together? The thought of lockdown ending and having to have face to face meetings, having their olfactory organ in the same room, must have just been too much.

Everyone says DYOR, but how many of you actually paid attention enough to this vital piece of information to research it and find out how truthful Sandeep's horse is? How many of you researched halitosis/JV interactions?

GH is on his way out the door, but I'm still here. Remember that, next time you doubt me.

And in case you wonder, I brush and floss my teeth regularly and use mouthwash when needed. And I am allergic to horses and saddles, too.

Genius is never appreciated until it's too late. That's the problem here. Everyone wants to find out some guy's speculations about pictures taken from up in space, but good, solid, first-hand reports are discounted. Did your satellite pics give any indication that GH might get fired? Well, did they?

"We desperately need a Scallywag RNS to fill our days with reading, comparing, contrasting and analysing every word not written between each line."

It will take some going to top that as the best line of the weekend.

@RC "Interesting TMT thanks. Every day a school day. So non UK PIs would work to calendar yr not tax yr?"
They will work to their tax year. For the US and at least most of Europe, that is the calendar year.

I suspect it's more than a tree shake. I suspect it is profit taking this week. I speculated on telegram that it's potentially non-UK PIs/institutions who waited until after the first of the year to take some of their profits so as to defer the capital gains tax another year.

It's not uncommon with shares on the US markets that have had big gains through the year to have a correction the first week of the year. If you crystallise gains on 31 December, you have to pay capital gains tax on the gains that April. If you crystallise on 2 January, you pay it a year later, and you have a whole year to find offsetting losses.

Silly of me not to think of that. I added £10k on Monday, should have waited a few days. Didn't want to miss a nice Scal RNS, though.

"There is £630 million alone...."

I know you know this, but just in case someone else is confused, that's not a tracker. So there is no guarantee that they'll be buying GGP in the same proportion as the index.

They might buy more, they might buy less, they might not buy any at all. The fund manager's performance (and generally, his bonuses) will be measured by whether they outperform or underperform the index.

What it guarantees is that the fund managers will be watching GGP carefully, because if GGP doubles in price over the next year, they'd better either buy it or find something else that does at least as well. So we're high on their watch list now.

I haven't searched for trackers of this index, so can't tell you if there are any guaranteed buyers or not. But anything that raises our profile with IIs is nice to have.

I suggest those freaking out over this read the RNS announcements carefully. George Weston has transferred millions of shares into a trust. There has been "no change of beneficial ownership" -- that means he controls the trust. It might be a charitable trust or something being done for estate planning, I haven't tried to find out. It's not my business or my concern, if he still owns / controls the shares, but now indirectly instead of directly, it's not relevant to my investment decisions.

He's also sold under half a million shares. This may be due to tax liabilities on the setting up of the trust. It may just be he wants to take a long and expensive holiday. Maybe he wanted to give big Christmas presents to all the little Westons. It's not really a concern to me, as many shares as he controls, if he decides to sell that many.

It's not accurate to say he's sold millions of shares. He's transferred millions into a company or trust that he owns and controls.

@SocialistB
I can't see that you gave any offence and I certainly took none. Whatever I said that gave you that impression, I apologise. I thought you misinterpreted part of my meaning, and wanted to clarify, but certainly I always thought the discussion was friendly. ATB.

Scroll all the way to the right on that report and you can see the effective date. In this case, it was 30 September. Many funds report only at month-end, many actively managed funds don't report on Morningstar until three months later.

So, they bought those 16 million sometime in September. Perhaps early September to get in before the GDXJ surge in SP.

Compare the price of gold to the price of copper, and ask yourself which you'd rather find more of.

Not that I'll be complaining if there's a significant and economical-to-mine copper deposit without any gold at all. But if given a choice....

Legalwolf has made a compelling argument for the benefit, given the current bull market in gold, of pushing forward rapidly in developing assets. I agree with him and others who argue speed is better, even though (by expected life span) I could wait 15-20 years for maximum return.

For those who would have preferred a placing to LIBOR plus 8%, please do the maths. A placing might have been at 18p. Given today's SP, that $50 million, if placed at 18p, would have already cost shareholders $100 million. Instead, it will cost $4 million / year, and can almost certainly be refinanced with a bank at a lower rate a year from now when the PFS is done. No doubt we could have done a placing. It wouldn't have been a disaster, but it would have been far more expensive.

@SocialistB
You have taken an interpretation of my posts which I don't believe at all, that NCM was hostile and had GGP over a barrel, and forced us into Juri basically at the point of a gun. I don't at all think that is what happened -- if it were that, they'd have had Scal.

The point is that they could have forced us into a much more expensive placing and made other things much more uncomfortable for us. I agree with whoever it was that said, somewhat cynically, that the big boys drive the negotiations. I suspect that NCM put the Hav JV and the $50 million on the table right at the start. And they said something like, "This solves your problems, we're happy with it, but we've got to go back with something to our shareholders. We want Scal."

And GH says, "No, but we can talk about PRE." They already had RFR on PRE, too. And at that point it was just reaching agreement on expenditure levels and percentages, and NCM insisted that they were doing us a solid with the Hav deals and we needed to do them one with Juri.

And GH and our BOD went back, sat around the table, and looked at the pictures of the cores from Scallywag, and said, "We'll never get to PRE anyway. Give them what they want, but Callum gets to decide where the drills go for this year."

Deal done.

I don't think it was hostile. Everyone protecting their corner, but also I am sure friendly and respectful. There's too many wins on both sides to view this as being a tense or uncomfortable negotiation, more like, "Are we all happy and is there anything else we can do here that fits well for both sides?"

I don't think your concern about maintaining our independence was a driver here. But that's a side benefit. If NCM wanted to take us out, they could have put the pressure on, driven our SP lower, and taken us out. They didn't do that.

But the further entanglement with NCM makes it harder for someone else to take us out, and easier for NCM to play white knight if someone tries. I also wouldn't be surprised if NCM were quietly building a small stake to help protect their position with GGP and help fend off raiders. I'd be doing so if I were them (but chances are they are a lot smarter than

Thanks, Paddy. I wasn't initially a fan when I heard it but I was in a situation where I had a lot of time to think and needed to focus on something to keep calm, so I thought it through a lot over several days. It probably isn't healthy to spend that much time thinking through something like this in normal circumstances, but it let my mind work and I became a fan, too. ATB.

One thing I forgot to say. Dodge was saying he needed to write more to stay up on the rankings. (I never knew there was a ranking, what a silly thing that is, LOL.)

But since there is a ranking, I must express my gratitude to SocialistB for giving me an excuse to write lots of stuff to put Dodge in his place. :p

Part Six, the Missing Piece

Scallywag. It's the missing piece. Both parties referred to it in their statements, NCM reiterating they still have the RFR, GGP reiterating they still own 100%. Why? It isn't part of any of the three agreements, except that the RFR is maintained as it was.

Both parties care about it and think that what they mentioned was important to their shareholders to know. That means both think it's a hit, or at least a likely one.

If Scallywag is a hit, what is going to happen? We are going to 1) JV it right away, or we are going to 2) prove it up a lot first to try to get a better JV percentage, or we are going to 3) become miners and mine it ourselves.

I'd suggest if we were going to do #1, we'd have just done it instead of PRE in the Juri agreement. So that suggests we've got a lot of drilling to do at Scal. We have a known hit and (whether we end up pursuing #2 or #3), we are going to be using all of our limited resources on developing it and Hav.

If Scal is another Tier 1 asset, or more than 1 Tier 1 (could be, you know), we're going to be throwing everything we have at developing Scal and Hav for a long time to come. We will have no money to drill PRE, and it would be stupid to let Scal languish if it is a known hit.

As others (notably Bamps) have mentioned, it will take a lot of money to drill PRE. So many targets.

Have you researched when our tenement holding for PRE expires? For how long it can be renewed? How many times it can be renewed?

It's not forever. If we don't press forward, we eventually lose it and someone else snaps it up. Time matters, we can't just sit on it for 15 years while we develop our other assets.

But it would be extremely foolish to neglect to push forward on Scal if it's a big hit.

The Juri JV is a win for NCM, no doubt about it. But it's also a big win for GGP if Scal is a hit, because it means a tenement that we probably wouldn't have even touched before we lost it is going to be drilled. Maybe we'll find something, and go along for the ride while NCM develops it. 100% of nothing is nothing. 25% of £20 billion adds a pound to our SP.

If Scal is a hit, and both companies think there's a high probability (at least) that it is, then the Juri JV is actually a phenomenal deal for GGP, too. Because it means that we'll be drilling and progressing a tenement that wouldn't have been progressed otherwise, and likely would have eventually been lost. Even if not lost, assets sitting idle for years while corporate raiders circle like vultures deciding whether to pounce is not a good idea. Better to develop them and force the market to value them.

If Scal is a hit, IMO, the BOD played a blinder here, even if it is also hugely beneficial to NCM.

Ok, I think I'm done now. :) Jerry said this all was "relatively concise." "Relative" is probably the closest I'll ever get to "concise."

I agree, Jerry. Great deal for both partners as it ends up.

Of course, there's the uncertainty. If PRE turns out to be worthless, then in my view this is a much better deal for GGP. If it turns out to be Hav x 4 or Hav x 10, it's a better deal for NCM. But we don't know. With what we do know, it seems a very good deal, finding the sweet spot for both parties.

Part Five, the Juri JV.

In my view, I've laid out compelling reasons why the other two agreements announced concurrently are much more to GGP's benefit than NCM's. In fact, in my view, on the whole they are at best neutral and possibly negative for NCM. But now we come to Juri.

I am of the view that the Juri JV is not a great deal. I am not persuaded that there is an economical-to-mine resource there. But if there is, it might be huge, right? And they get 75% for a relatively small drilling commitment. Standing alone, it doesn't make a lot of sense to me.

75% for a $100 million commitment? Yes, I could see that. Or 65% for a small commitment? Yes, again I could see that. I'm assuming the absolute baseline is 60%, and I think you'd have to significantly prove it up to derisk it for the major before they'd ever agree to 60%. But to be clear, at 60%, they get to pay 60% of the CAPEX, 60% of the ongoing expenses, etc. So a 60% deal on a major find that uses their expertise, etc, is not a bad thing.

But 75% for a minimal outlay doesn't seem very good to me, either. So in my view, NCM got a great deal on Juri. I'd have said with a $100 million outlay, or maybe $120-150 million, it would have been a pretty good deal. For what they are paying, no, not in my view.

But Juri isn't standalone. It's part of a package, and the other two parts were substantively in our favour. Juri is the payoff. It's a big payoff, in my view. But on the whole, with what we get in the other two agreements, the three agreements constitute a good deal that gives both parties some big wins.

I do not see why NCM would be able to tell their BOD / shareholders that it was a beneficial thing for them to do the loan agreement and Hav JV, if they weren't getting something else in return. I'm going to assume based on both company's news releases that they wanted that something else to be Scallywag, and GGP said no. They accepted PRE instead.

I'm convinced that Juri was the oil that greased the deal on the Hav agreements. Since Hav is our crown jewel and possibly always will be, I'm cool with that.

One more part to come but I don't know if it will be tonight or tomorrow.

Part Four, the Havieron JV agreement.

@SocialistB "Ohh, and by the way, “moving from "Farm-in and potential JV" to "Havieron JV” that is mutual beneficial for both parties. So no winner, as there shouldn’t be in any good partnership."

I respectfully disagree on both points. The latter first. In a good partnership, parts of a deal may be much better for one partner than the other. In fact, part of my argument here is that the Juri JV may be somewhat better for NCM than for GGP, but that the other two concurrent agreements are strongly beneficial for GGP.

As to whether the Havieron JV is more beneficial for GGP than NCM, to me, this is obvious. First, I readily concede it is beneficial for NCM. The Farm-in had run its course as a mechanism for bringing Hav to production. The total expenditure in the Farm-in wasn't going to get there because of all that annoying gold that has to be drilled.

It's clearly to NCM's benefit to arrive at a new deal that pushes things forward, to get Hav ore to Telfer. It's been discussed at length here, it needs no further discussion. But NCM has other nearby JVs that they could shift to as a stop-gap so as to leave GGP to twist in the wind. And Telfer is only part of NCM's operations, while Hav is everything to us.

So the Hav JV is a win for NCM because it allows them to push forward on Hav and feeding ore to Telfer. Definitely a good thing.

But for us, it is immense. It removes any doubt that Hav will be mined. No more is it "potential JV" in NCM announcements, now it is "JV." The market now accepts it as reality. We're no longer just an explorer, we now have an asset that one of the most respected miners in the world views as a mine to be developed, one for which they've formalised a JV.

It is no surprise that institutions have started to buy in, and the SP has jumped. It was a huge win for us, we are no longer a flaky explorer, now the instos see us as legit.

So I view the JV as a win for NCM but a much, much bigger win for GGP. For them, it protects an asset (the Telfer plant) and lengthens the life of the Telfer mine, as well as pushing a new asset towards production. For us, it's everything.

It's also, in one respect, a loss for NCM. As with the loan, it takes away leverage they could have used to pressure us into accepting a low-ball offer for Hav or for all of our assets. On the whole, I think it's a win for them, but it comes with a cost, too. For us, there's no cost, just benefit. Huge advantage to GGP.

Ha, looks like someone was ahead of me on that last one. Sorry for the redundancy.

Part Three

The loan agreement is to GGP's benefit and NCM's detriment because it allows us to defer any discussion of the 5% at fair market value until FMV has grown and grown and grown.

Hav is too big, it broke the old agreement. The old agreement was supposed to take us all the way to the end of Stage Four with the agreed expenditure. Sadly (LOL), they kept finding gold and so had to keep drilling in unexpected places, and so we're not even close to Stage Four.

Under the old agreement, at this point NCM could say, "Sorry, we've spent our money, you have to come up with some cash to push this forward." They'd have been totally within their rights, and they could have then said, "Of course, we can make some assumptions about the 5% FMV. But those assumptions have to satisfy our BOD and shareholders, so they aren't going to be too optimistic."

All that has been deferred. To our advantage and their disadvantage.

So that's three parts on the Loan agreement. It was a huge win for GGP and a significant detriment for NCM.

Next part, the JV agreement.

Part Two
Short version for those who don't want to read the logic: The loan deal was actually detrimental to NCM's interests.

Logic: The most beneficial thing for NCM would be for the GGP BOD to say, "Hey, guys, we were wrong, we think it's worthless, we'll sell you our remaining share of Havieron for $1 (AUD, we won't even hold out for USD)."

Short of that, the best thing is to get it for a low gold-in-the-ground price. Could they get it? Maybe not, but they certainly could have put the pressure on. Their option to buy 5% more, which would solve GGP cash problems, kicks in when Stage 4 is done, and that's a year or more away. Meanwhile, stuff has to be done, and it's stuff that takes money, and GGP is supposed to pay a lot of that. And GGP doesn't have that kind of money.

Where will they get it? Banks don't want to loan at this stage, not that kind of money. So we're talking a very large rights issue or placing. As mentioned in my last post, that's pretty detrimental to GGP, very expensive compared to what did happen.

There was an alternative that would have been very beneficial to NCM. By not doing a deal and applying the pressure (or simply letting the lack of money apply the pressure), NCM could have come in and said, "We'll buy your share of Hav for $250 / oz." Or even $350, it would have been a great deal for them. They could have paid $350 / oz in the MRE and continued to pay a royalty at that level for the life of the mine. It would have solved our cash problem for sure, but been an incredible deal for them.

They could have had us over a barrel. The loan deal removed the barrel. It destroyed their largest bargaining chip, if they wanted to play hard-ball. If their only concern was to maximise their profits on Havieron, it was a stupid thing for them to do.

Conclusion: the loan deal, on its own, was detrimental to NCM's interest.

Secondary conclusion: the loan deal, being a huge win for GGP as I've said before, and detrimental to NCM, something had to give on the other side to facilitate it.

Whether or not one believes the price paid was too high, to me it is an absolute certainty that the loan deal was far, far more beneficial to GGP than to NCM.

Will try to come back to part three in a bit.