Member Info for TakingMyTime

"Is it possible their weighting increased as they sold out of another stock s"
No. Their weighting increased because our SP went up, so the GGP shares that they own are worth more than they were and thus a larger percentage of their portfolio.

Weighting isn't based on number of shares, it's based on the value of the shares.

Perhaps not everyone has noticed that the GGP SP has gone up recently, LOL?

It is indeed possible to get shares on a tax-advantaged basis, though you usually have to pay capital gains tax on them when you sell them. If it is important to you, you could research the different tax-advantaged schemes and the limits involved and then write PSN and ask if Mr Jenkinson was in any of these schemes. Here's the link describing them: https://www.gov.uk/tax-employee-share-schemes

I think you'll find that most of his shares are not in these kinds of schemes (can't acquire that many in these schemes because of the limits). That means, for most of his shares, he will have paid tax on the value of them at the time he received them, Persimmon will also have paid employer National Insurance on that value, and then also paid capital gains tax on the increase in value when he sold them.

If you can find evidence to the contrary, I'd be glad to see it. If I am correct, it means that probably 50% or more has been paid in taxes. I'm sure that's not enough to satisfy everyone, but I have no complaints if that's the case.

Yes, cash has its own risk. If central banks keep printing money, cash can lose value pretty quickly.

In a potential hyper-inflationary environment, I like holding real assets, land, gold, oil, etc. Glad to hold them indirectly by owning shares of companies that own / produce them. BP and Shell are both moving more and more into speculative renewables stuff, something I'm not convinced either of them is good at. Thinking of shifting my oil investment to Chevron or Exxon, not sure which.

Hi, Nige. The Mrs doesn't need to bully me to do what she wants anymore, she has me much better trained than that.

This time, I talked her into increasing. We're at 40%. The crunch will come if the GDXJ thing comes through -- quite sure it should. I told her we could do it temporarily and then take some profit at that point if we wanted. Not sure she'll be happy holding that much, especially if we get a further surge, which could take us to 45 or even 50%. So we might top-slice at that point, I don't think we'll be over 40% for the long term.

Schlem, I'd be very careful there. NCM is talking about getting out, seems pretty poor research IMO to talk about they've got the backing of NCM when NCM is unhappy with the direction and is potentially divesting.

Read a couple articles before investing: https://www.mining.com/investor-cornerstone-looks-to-replace-solgolds-board/ and this: https://www.globenewswire.com/news-release/2020/07/15/2062439/0/en/Cornerstone-to-Requisition-SolGold-General-Meeting-to-Replace-Entire-SolGold-Board.html

SOLG appears to have a great resource in Ecuador which may be a reasonable jurisdiction. So I'm not saying it's a bad investment, it might be a great one. But I don't trust the board enough to invest, personally.

So, that was really good and useful stuff, though it probably only relates to the 5%. And that's only if the agreement specifies that to be the protocol used for FMV (but it probably does).

If we sell our 25%, I don't think it's defined by any FMV calculation. It's whatever NCM and GGP agree, or whatever someone else offers for it, I guess.

We've had a lot of speculation here as to how much NCM wants to own 100% rather than 75%. Also a lot of different ideas as to whether we should sell our 25%, if they offer to buy it. My impression is that GH is talking up holding it because he's signalling he's not going to sell it cheap. Doesn't mean he won't sell but has to be a good offer.

@jdt, I largely agree. It was 10 July. You said:
It's a really good point schlemiel on how FMV is determined. I have very little experience in this field and I am sure there are some on this bb a lot more equipped to add some colour to this, but there are some loose guidelines for determining FMV under the VALMIN code:

D43 of the VALMIN Code (2005): Value is the Fair Market Value of a Mineral or Petroleum Asset or Security. It is the amount of money (or the cash equivalent of some other consideration) determined by the Expert in accordance with the provisions of the VALMIN Code for which the Mineral or Petroleum Asset or Security should change hands on the Valuation Date in an open and unrestricted market between a willing buyer and a willing seller in an “arm’s length” transaction, with each party acting knowledgeably, prudently and without compulsion. Value is usually comprised of two components, the underlying or ‘Technical Value’ of the Mineral or Petroleum Asset or Security, as defined in D36, and a premium or discount relating to market, strategic or other considerations. Value should be selected as the most likely figure from within a range after taking account of Risk and the possible variation in ore grade, metallurgical recovery, capital and operating costs, commodity prices, exchange rates and the like.

D36 of the VALMIN (2005) Code: Technical Value is an assessment of a Mineral or Petroleum Asset’s future net economic benefit at the Valuation Date under a set of assumptions deemed most appropriate by an Expert or Specialist, excluding any premium or discount to account for such factors as market or strategic considerations.

You then followed it with:
The positive I take from it is that there are two very distinct elements that have value applied (of course assuming this VALMIN code applies to all mineral FMV esimates):

1. What we know for sure, the "Technical Value" and that is deemed by an independent expert.
and
2. A premium or discount relating to market, strategic or other considerations. Value should be selected as the most likely figure from within a range after taking account of Risk and the possible variation in ore grade, metallurgical recovery, capital and operating costs, commodity prices, exchange rates and the like.

This seems to be a bit more of a "gentleman's agreement" to determine any value to the unknowns. Now I see 3 things in our favour in this instance:
-POG on its way up in the midst of global recession
-A good working relationship with NCM (who do seem to need HAV to keep Telfer going)
-GGP's strong indications of HAV being a larger resource hitting good gold in wider targets such as HAD066

Now could these "far out" drill holes from the bulk of HAV drilling be GGP lining up some ammo to say look how far out we are hitting gold at HAV, you have to assign some value this although we havent got a defintiive number?

Impressive. Don't recall seeing a double-post an hour and a half apart. Has to be a record.

Hi, Chester. I think Bamps has nailed it.

I think you are conflating two things that aren't the same. One is the MRE and the other is Fair Market Value. The latter is what will be used for buying our 5%, and perhaps also the other 25%. The former isn't relevant to that. These two numbers could be, and probably will be, very, very different.

I do not think it is in NCM's or GGP's interest to be proving up a maximum-size MRE. The MRE is a box that they need to tick before mining. It would be silly (IMO) to delay pulling gold and copper out of the ground just because we don't know the full extent yet. We want to know enough to know what mining method makes most sense, of course. But for both NCM and GGP, moving on to production as quickly as possible is best. If that means we still don't know enough to set FMV, presumably they'll work out a deal to handle that.

Hav is a company maker for GGP and vital for NCM's desire to really take advantage of potentially the greatest bull market in gold in history. I don't think anyone is going to be playing silly games that might end up with legal fights and possibly even delays.

Some of the answers here seem a little simplistic.

NCM and/or NCM/GGP together do not control the MRE but they do control the drilling that leads to it. It is their decision when to say, "We have enough now for an MRE," their decision where they drill (and how deep) in reaching that point, etc.

If you want a good working relationship with your JV partner these matters will be discussed between them, but it's not really right to say that they don't control it. It's also not all that important that they do -- it's to everyone's benefit to have a good MRE. It's also to everyone's benefit to have the MRE happen soon so matters can progress rapidly towards mining. NCM's and GGP's interests align on this point.

The only place interests don't align is determining Fair Market Value for the 5% that NCM is expected to acquire from us. It's in our interest for that to be as big as possible, NCM's for it to be as small as possible. But the MRE will not determine FMV, it's just an Estimate at one stage in the process.

"If its that deep could we not drill it from the other side?"

https://www.antipodesmap.com/

Put in Telfer, Australia, and you'll find a whole lot of water, but not all that far from the British Virgin Islands, I guess. Weather is better except for hurricane season. You could pipe some water through the tunnel and irrigate the WA desert.

"It could tie into the lack of rig movement of late."

I've been wondering why the NW hasn't been swarmed with rigs to ascertain just what's out there. I've cautiously assumed we're going for more detail around the horseshoe for purposes of nailing down an MRE. I'm still mostly assuming that's what it is, but some of those holes might be going very deep....

Mostly, though, you'd think they'd wait for the exploration decline to try to pursue the very deep stuff, wouldn't they?

Persimmon said: "A proportion of our properties were sold on a leasehold basis in the past. Following consultation with government, stakeholders and customers we took the decision to stop selling leasehold houses where Persimmon owns the land freehold in 2017. Any customers of a Persimmon leasehold property in the last six years have been given the right to buy their lease at below market value and many have done so. We look forward to engaging fully with the CMA on this issue as they continue their investigation."

(multiple media sources)

From Reuters:
'“We believe these are known historic issues where companies have already taken corrective action. At this stage we see immaterial risk to earnings or requirement for provision,” said analysts at Credit Suisse.

The CMA said the possible outcomes of its investigation could include court action or legal commitments from companies to change their practices.'

If all they are after is 'legal commitments to change' this is all about nothing. If they are going to pursue mis-selling compensation that could be a big deal, obviously. But to do that you'd have to prove there had been mis-selling. It's easy for people to say "I didn't know", of course. But invariably they will have signed things that say they did know.

I keep reading this. It is not true.

Anytime a company issues more shares, it dilutes the stake of existing shareholders. In a 1-1 RI, you'd have a 50% dilution. The shares that you own would now be 50% less of the company than they were before.

In a rights issue, you can counteract the dilution by buying more shares, and you get the right to do so at a discount. But it's still dilution and it costs you money to counteract it. If the RI didn't happen you could take that same money, buy someone else's shares, and have a bigger share of the company than you have now. So this is, by any meaningful definition of the word, dilution.

It is not necessarily >negative< for shareholders -- it depends on if the extra cash raised by the RI increases the value of the company enough to overcome the impact of the dilution. That will depend on what the company does with the cash, and what would have happened to the company without the cash. Presumably, the RI will increase the value of the company, hopefully enough to justify the price we have to pay to counteract the dilution.

Once the RI has been approved by shareholders and is announced that it is definitely going ahead, you have been diluted. Effectively you immediately own a smaller stake in the company than you had before. You also own a right to buy X more shares at Y price, which for X times Y pounds lets you get back to the same percentage you had before. You will then have to decide whether to stay with your smaller stake and sell your rights, or use the rights.

The question comes down to this -- what do you think X shares in the new cash-richer IAG are worth? If you sell your rights, you get Z per share right (whatever you could sell them for). If you use them, you pay Y per share for them. So the cutoff point is Y+Z -- you have to decide whether they are worth more or less than that. If worth more, exercise your rights and pay Y per share. If worth less, sell your rights and receive Z per share.

@speedy "Am i correct in thinking there are other funds that will have to buy in, as Sprott did?"

We aren't entirely sure. There are some leveraged funds tied to the index that might be buying some but it's unclear. There's something on the index page that suggests there's one or more others, but I haven't been able to identify them. At the most, it would be about a third of the GDXJ buy -- which would be quite a lot, of course. But GDXJ is the main story here (if it happens).

As suggested in a brief interchange I had with RA earlier, it's possible (but unlikely) we get into GDX. Our weighting if we did would be very small but that would still be another very large chunk of shares. I think that might have to wait a few months, though.

@Jerry, but if the investment house were to just be looking to hedge by buying the shares, seems they'd want a pretty nice fee for that, which shoots down the whole tracker thing, doesn't it?

But when you look at these trackers, they aren't doing great, to be fair. And the more I think about the logic of how these things would work (with effectively daily returns), that's going to zap your return over the long run. I guess they have some value for very short term hedges but I can't imagine wanting to be in them long term.

I hate to be the guy that calls someone else's discussions "boring" but I suspect this one has even become boring for most of those who have participated in it.

@Jerry
"TmT, you may be right re the leveraged etfs, but if they think they can buy derivatives in GGP, it will have to be an OTC with someone fairly big, and the only way they could hedge that derivative would be to buy GGP shares, so the answer comes back to the same issue."

I was thinking about this and how you'd structure it. Part of it is easy. You have two funds trying to track double the performance of the index, one negative, one positive. Obviously, they can enter into a short-long contract with each other. If the price moves up, the short fund pays the long fund twice the price move, if it moves down, the money goes the other direction. Basically, it's spread betting between the long and short fund. That would virtually solve the whole problem, without having to buy any shares, if the funds were the same size.

But they aren't, the leveraged long fund is much bigger than the leveraged short fund. So the long fund can't cover the whole thing. But buying the shares doesn't get you to twice the performance. The only way to get there, I think, is to find someone who is willing to go short on GGP, so they can buy more long contracts.

Will the person going short buy GGP to hedge it? Perhaps somewhat. But if this is what the index was talking about, I don't think we should assume that there's another $2 billion to be purchased proportionally among the index constituents. It will be less, perhaps a lot less.

@wasu, I don't like Trump, either but I don't see why I should let that taint good news.

@LtCaptain, both the US and the EU used a fast-track approach for H1N1. That's a matter of historical record.

It's not playing politics, it's trying to save lives.

Very secondarily, it might be very helpful to our investment here, too.