Member Info for TakingMyTime

Thanks, Bamps. With GGP I'm in the "where am I putting this money if we get bought out" phase. So I'm casting my eyes around for possibilities that way. I like to track things for a while before investing so when I look at others right now, it's not because I'm thinking about moving out of GGP, it's looking for the future.

Appreciate your thoughts on PUR, good stuff to consider. I don't know enough about mining.

It's possible any Brexit drop in the pound is mostly priced in already. We've started to see reports about no deal the last few days and the pound has lost maybe 1-2%.

@Jambo, basically the rules of the tracker. If it's a tracker, it tracks stuff in the index. So to sell stuff that is in the index to buy stuff that isn't in the index (even if they know it is going to be) would violate their prospectus.

There's different kinds of trackers, but this one is full replication. So they'll change on the date they say they'll change.

I've been interested in PUR for a while but don't want to take funds out of GGP and don't want to increase my exposure to the sector (already kind of overexposed). Certainly worth watching, good luck with it!

Still stubbornly holding PSN, too. :)

@TomE
Yes, Spy is well-informed on some things, especially on mining industry, I believe, but obviously hadn't really looked into this at all. This is with the share markets. It's not really his area of greatest knowledge.

And I think if you read Paddy again, he wasn't casting doubt on GDXJ (though we know it isn't certain). He was comparing GDXJ to GDX and saying it looks like one will very likely happen (even though we aren't producing yet), the other won't. Which sounds right to me.

All IMO, of course. ATB to you, looks like another good day to be in GGP!

@hydro
The problem is that the tracker has become so big that it becomes very difficult to buy enough shares to fill it if you exclude larger companies. So they've fudged that a little bit in the past and may do so again.

You mentioned Goldfields. Yep, silly to call them a junior. But if they and a couple others drop out, then instead of buying £25 million (or whatever) of GGP, maybe they would have to buy £4-50 million. That would be almost 10% of the MCAP being bought on a single day. You would start to cause major market distortions, huge spikes, then significant profit-taking and falls afterwards, and the tracker would lose a lot of money on the distortion. The index would cease to be a useful measure of the market performance, it would be skewed badly by the rebalancing process, and the index is paid by the etf, so if they destroy the etf with this kind of distortion, the etf loses investors, the etf dumps the index, and they have no income.

So, whilst the etf tracks the index, the index needs to serve the etf, and that may mean keeping some larger members in longer than you'd expect. I don't have any clue whether they'll dump the bigger ones this time or not -- maybe only one bigger one, if any.

@TomE
Those who seem to be well-informed about the markets and how these things tend to work all seem to think it is very likely we are joining GDXJ this month. No one knowledgeable is guaranteeing it, though.

I tend to categorise posters in my mind by what they've shown they really know, and value their input in those areas, but discount their speculations about things they don't know that much about. It quickly becomes obvious who has on the ground connections, who has industry connections, who has market knowledge, who has mining knowledge, etc. Paddy seems to have done at least some introductory research on most every aspect, but most people have their particular areas of strength.

But the best way, in this case, is for you to simply go the Van Eck / GDXJ website, read through what it says about how they track the index, and then go to the MVIS website and read through the Index Guide. See for yourself what the rules are, when it changes, how they make the changes, and then check GGP's Market Cap and liquidity over the last nine months to see whether it fits the rules. DYOR and you won't have to care about what someone said here. All the rules are laid out pretty directly, as far as we can tell. There might be a stinger somewhere that would keep us out but no one has identified anything from the published index rules that would do that.

@Roxbury

I agree that he provides nothing useful to the board. There are a few others as well though they aren't so prolific.

I used the filter capability to block his posts long ago.

Any company can go bust.

If Moody's says they can go 500 days, they can go longer. Since 2008-9, when the ratings agencies got mauled badly, they've had to be very conservative. So if Moody's is saying the reserves after the RI will last 500 days, it's probably 600. That might mean another RI at this time next year if things haven't improved before then.

So yes, the company could go bust, but it's extremely unlikely.

Summary of the June rebalance: https://economicalpha.blog/2020/06/12/gdxj-mvis-q2-rebalance-update/

March rebalance: https://economicalpha.blog/2020/03/13/mvis-gdxj-rebalace-q1/

Dec 2019: https://economicalpha.blog/2019/12/13/gdxj-rebalance-update-for-q4/

Sep 2019: https://economicalpha.blog/2019/09/13/mvis-gdxj-junior-gold-miner-q3-etf-rebalance-the-latest/

The last one is interesting because it shows price performance Royal Nickel, added 3 months earlier. It's a cautionary note for those thinking GDXJ changes the GGP world. Huge price spike due to GDXJ, basically gave it all back.

I expect GDXJ will mean a rerate and we won't give it all back but the main thing driving this will always be what happens with Hav (and secondarily, our other prospects). The GDXJ thing is a lot of fun but that isn't what makes a company.

That's bizarre. There was no insider info or claim that there was insider info on those posts. Maybe because it included a specific name but the guy's name is public info. Weird.

Probably right, Paddy. It looks like we might be eligible once Hav starts producing, even if all we retain is a royalty share, but I think you are correct.

There seems to be a little more leeway for them to make decisions on who to include than in the MVIS rules, but I'd be very, very surprised if we were added to this index.

@hydro, it depends on two things.

The first is whether AIM shares are eligible for the index underlying GDX. I'm not sure whether they are, and I haven't checked to see if any constituents are or have been AIM.

The second is how they calculate MCAP. It's tricky in this case because the 31st was a business day in the US (where the index "lives") but not here. So the ending price for the index was our SP on 28 August. No question on that, it was clear. But what exchange rate is used? Closing exchange rate here on the 28th? Closing exchange rate in NY on the 28th? Or closing exchange rate NY on the 31st?

If it's the rates on the 28th, we didn't make it. But if they use SP on the 28th and exchange rate on the 31st, I think we did. It's that close to $750 million.

So, I don't think we're in, and maybe we never will be if AIM is excluded. But it depends on how the rules are interpreted, and we might be. If so, we have even more interesting days ahead than we thought. Hey ho, here we go!

Quite sure on GDXJ, though could be wrong. Pretty doubtful on GDX, but could be wrong. LOL.

SP goes red, green boxes appear in the chat.

25, 30, 40, 50....

I'd like to see 18. Will be the first full-bagger for my Mrs ever.

I hope the SP isn't "only" 19-20p by the end of the year, a lot of very fortunate people will be disappointed, which would be sad.

LOL, I should just let AM90 answer questions on this.

@Jerry, it's based on the end of August.
From the Index Guide, page 10, paragraph 3.4: "The reviews for all Indices are based on the closing data on the last business day in February, May, August and November."

So the MCAP used for the weighting is set in stone, now. It's based on the SP as of close on 28 August, and probably on exchange rate as of the close on 31 August (this point isn't entirely clear to me). So increases in SP right now are actually marginally counterproductive to how much the index buys, though I doubt you'll find anyone complaining about increases.

If we spike above 20p, it will be mayhem.

No clue how much it will spike. A lot of buys driving the recent increases, some of them big buys. Are they traders looking to sell to GDXJ on the day or are they investors who realised they need to get in ahead of the 18th (and maybe ahead of the 11th)? Will we get the entire price bump before the 18th and GDXJ just be buying out all the short termers? Could happen.

If this really happens, it's likely to be a wild ride for those wanting to trade it. Best chuck your charts in the bin, too.

Also, remember, the higher the SP goes, the fewer shares GDXJ has to buy. They'll be buying a dollar amount, not a set number of shares. Exchange rate is relevant, too -- cable has been pulling back, and is likely to stay weak unless/until a Brexit deal is reached. That means those dollars buy a few more pounds and potentially a few more shares.

Many moving pieces here. The biggest ones, I think, are first, did we miss something and are we really in, and second, will the top two currently in the index get kicked out? If they do, our percentage is a lot higher.

I'd love to see us get to the point where we have the cash and expertise to prove up assets before the JV. Then, instead of a speculative deal for the major, it's a proven reserve. Bring them in on a JV to do the mining, use their expertise to get it out of the ground and processed. Or, just sell them the whole reserve, if the price is right and that's what they want to do.

If it's speculative, you're going to be hard pressed to do much better than a 70/30 ratio. If it's a proven reserve, you can dictate much better terms. Use Hav to generate the funds (whether by selling part or all of our share, using our share to support debt financing, or by using the proceeds of mining) to take exploration much, much further before you enter a JV.

Do the drilling ourselves, but always let a major do the actual mining, either by selling to them or a JV.

MFU, Elise has picked one of many threads that discuss this but it's probably one of the best, if you read back through it from the beginning. Other threads linked to and quoted from the index rules and the GDXJ fund rules.

Since this discussion started the SP has gone up by 3p, including some very large buys, one of 7 million shares. So it may be that some buyers are "front-running" this, buying in now at a lower price intending to flip the shares and take a quick profit when GDXJ starts buying (which would apparently be on the 18th). So they may find a bunch of ready sellers which may suppress the expected price increase -- basically, we're possibly getting some of the expected price increase early.

What could stop it? No one has given any reason that could. I've gone through the rules carefully, as have obviously Jerry and AM90 and probably Paddy, and undoubtedly others, and no one has found anything that would keep us out.

How did it come to light? ChristopheB suggested it. He doesn't post a lot here but is obviously very knowledgeable about the sector broadly (not just GGP), and has invested or followed multiple other juniors. So perhaps he's experienced it with one of his other investments.

I do not think it is guaranteed that we'll see a huge SP increase if it happens. These things are very difficult to predict. But it's bound to have some impact. We may see an increase on the 18th and then give some of it back in the following days as existing holders take some profits. But I strongly suspect the days of 12-14p are gone forever with this share, and I'll be very surprised if we ever see 15-16p after this month. That's my own personal opinion, of course.

I'm hoping the next NCM update blows people away and some of these people who were intending to sell to GDXJ and take profits are forced to think twice, and maybe keep holding.