Member Info for TakingMyTime

@Hopefully, a sharesave scheme is a tax-advantaged employee benefit. It's not available to ordinary shareholders.

@Bamps
"The Decline is expected imminently maybe before Xmas but definitely afterwards. The Decline is not in the Jv and should have been after Phase 4 and the full FS.
There are 2 points I would like to raise is Phase 4 coming sooner than we think and are Ggp liable for 40% of the cost of the Decline until Phase 4 is complete"

1. I think you are right that Phase 4 may well be coming sooner than we think.
2. Since the costs of the decline are not part of the Farm-in, it would presumably be negotiable. My guess is NCM will finance it and that GGP will eventually end up paying 25% of those costs, to be deducted from the price NCM pays for 5% at FMV.

In the large overall view, both parties want this to push forward with all haste. We're talking about a multi-billion pound asset, they aren't going to let a few quid for a decline stand in the way.

https://www.telegraph.co.uk/business/2020/08/10/gold-glittering-prize/

"I do not know whether gold halves or doubles from here, but I suspect it will be one or the other. And given the higher probability I would assign to the latter, I am happy to have a small proportion of a well-diversified portfolio sheltered in this traditional port in the storm."
-Tom Stevenson, Fidelity

@ProfQ
"I think if we use 3p per million oz at Havieron to work out the value then that assumes the gold to be worth about $530 per oz. That's divided by the fully-diluted number of shares, 4,206,000,000. That would mean 14p suggests about 4.6 million oz now."

3p * 4.2 Bln shares = £126 million (after 30% Aus tax)
£126 million after tax = £180 million before tax
£180 million for 1 moz Au = £180 / oz
£180 oz = about $235 (USD) / oz

Either your $530 is wrong or I've done something stupid.

Personally I think the 1 moz = 3p/share formulation is pretty conservative. I don't know how much the JV will have to pay NCM for the toll processing, and that (whatever it is) has to be included in the AISC for Hav, as does the transport to Telfer. I think those expecting AISC below $200 are overly optimistic. But given the POG, I still think 1 moz is likely worth more like 5p per GGP share. If so, and we get an MRE in excess of 5 moz, it's easy to see where this would be going, especially since the MRE won't include everything.

I predict that TomE and Fenixdor will never be best mates, LOL. Why don't you guys filter each other and lower your blood pressure?

@CTC / l-a
Perhaps we could get BR to put it on his site, how this has changed over time.

@ponieexpress
Why would we push for a new processing plant at Hav? If we're going to push for something, wouldn't it be better to push for a higher percentage of the proceeds of Scallywag, rather than a new processing plant?

If it becomes significantly inefficient to ship ore to Telfer and process it there, compared to building new plant closer, that's not something GGP will be pushing for. It's something NCM as the senior partner at Hav will want even more than us. They'll be pushing us to pay 25% of the cost of a new plant.

I admit I just don't see the focus on a new plant. It's serious money that doesn't have to be spent. Sure, if there's radical new technology that slices the processing cost to 1/4 of what it is currently it might make sense, if there's enough ore in the area to justify it. Otherwise, just build a conveyor system to get the ore there more cheaply, and have done with it.

@ponieexpress
You can move an awful lot of ore for the cost of a new processing plant.

If there are other major finds near Hav, look for a rail or conveyor link rather than a new plant. And don't expect GH and GGP to be insisting that NCM do anything. We are and always will be the minnow in this pond.

That's probably not how unemployed people in the US view it. They probably are glad he did something.

@RA, good question.

In my view, NCM will press on with Hav no matter what. We're on our way to an MRE probably over 5 moz before the end of the year. No one else will be close to that for more than a year. Havieron isn't going to satiate Telfer, she handles more than 20 mta. If there's another big resource to feed through, there's room for more.

Another big find make make them less likely to buy us out, because of other things to do with cash, but it won't mean they won't crack on with Hav. That's happening.

Whether a find helps us practically, perhaps it would change the consideration on building a conveyor or railway to Telfer, and someone else sharing the cost, but that's not likely a huge factor overall.

As to whether it boosts the SP, who can predict sentiment?

@bluetiger, exactly. With emphasis on "sometimes".

Others disagree but to me ROCE is an important metric for income producing companies. Not so much for an exploration company, however, somewhat meaningless at this point in GGP's life cycle.

@schlemiel
Excellent post, but I don't agree with one of your conclusions.

If we need further financing (we might not after the sale of 5%), debt financing is likely to be better for shareholders than a further equity raising.

Further equity means dilution of current holdings. If it is done as a rights issue so we get to partake, we'll have to put up the cash to do it. That means extra cash just to maintain our current percentage of the company. But if we have extra cash we want to invest here, we can do that without a rights issue, just by buying shares.

It comes down to this -- is the debt financing going to cost a higher interest rate than the shares are likely to return over the same time period? If so, equity is a better way to go. If the debt financing is a lower interest rate, then debt financing is the best return for investors.

History, of course, may not repeat itself, but I believe the price on these shares has a long, long way to go, and that debt financing can be achieved right now at incredibly low rates. That suggests debt financing is going to be a better value for shareholders.

I am certain that the BOD will crunch the numbers and make the best decision. If we do reach the point where we need more cash, in all likelihood the SP will still be undervalued and have major upside left, and debt financing will be cheaper. And unlike the SXX comparison that you drew, I suspect there will be lots of debt financing available. That gold is getting closer and closer to coming out of the ground, and it's value once out of the ground is getting higher and higher. There will be debt investors wanting a piece of the action -- NCM had no difficulty raising debt financing recently.

@Gimme
Please send me two things, your girlfriend's 1) pic and 2) phone number. If I like the first I'll use the second to give her advice and relieve you of part of this terribly heavy burden you are bearing.

Always glad to help a friend.

Hi, Tom. You are right about Numis. Hannam & Partners did, too.

It's not locked on that we'll get anything new out of NCM this week, but I suspect they are waiting until after that. Since it could drop any day, and since it could move the market when it does, it would be foolish for anyone to be playing trading games on this one -- you wouldn't want to be out of it when the broker note comes.

LOL. No Welsh blood so we aren't twins, I guess.

@TomE
They could do that. But their clients who follow their advice won't be pleased if they get it badly wrong, and significant news may be coming very, very soon.

Their goal for a broker note is not to make GGP private investors happy, their goal is to look good to their clients.

It's an interesting one, because if they come out before NCM, and get it right, they could look really good to their clients.

I think it is likely to GGP's benefit if they come out after the NCM meeting. I expect discussion of Hav at that meeting to give a boost that will take out any resistance and squeeze any shorts that are lurking, and if a broker note follows soon after, it could become a momentum thing.

Someone who believes oil is going to remain viable, and that will too many majors reducing their oil holdings, the price is likely to go up someday.

@Avizandum
1. Who's roasting the board? Trying to understand why they are doing what they are doing isn't roasting them, it's research.
2. We're in a JV with NCM on one project. Our interests align beautifully on Hav but there's no reason to follow their interests outside of Hav unless there is again alignment.

Bamps started an interesting discussion here on why/how the current plan fits our interests. It's a great question and topic for discussion -- maybe someone will figure out the answer.

Hi, Bamps. "Why are they leaving it to after Scallywag?"

It's a good question. I don't know why NCM would be more interested in a Scal JV as opposed to a Saddle Reef JV, though. Not much cover at Scal but also not much at Saddle Reef, it appears. Goliath isn't quite as close to Telfer, so perhaps that explains that one. Maybe proximity to Hav means the possibility of shared infrastructure?

If you hit bit at Scal, it probably makes sense to build a railway or conveyor to Telfer. Obviously, that wouldn't come into play at the other sites.