Member Info for TakingMyTime

@AM90, Ok, you forced me to do the maths. I believe you are correct. I believe GGP is likely to enter the index on 18 September. I have not checked the index rules on weightings or how quickly the GDXJ ETF rebalances when the index changes. The Sprott ETF weights SP momentum heavily, I don't know if the GDXJ does or not. And the Sprott ETF is quite a bit larger than GDXJ, so it may not have the same impact as Sprott had.

@Floater, I didn't even remember who cited Sprott this time but it keeps happening.

You can read the rules for yourself, both for the ETF and for the index it tracks. It really is just a tracker, just like a FTSE 100 tracker or any other. The rules lay it out. They designed the rules to reflect what the market thinks of gold juniors. There's absolutely no "this is a good share" logic in it, it's just, "What's the market cap and what's the price momentum?"

All it tells us is that the GGP share price went up enough in the months before the last rebalancing to jump into the index, and jump in at a high weighting. If the SP is relatively flat before the next rebalancing, Sprott will sell a bunch of shares because momentum won't juice our weighting. If we are up around 20p by then (November), the weighting will likely still be pretty high.

@Doggy "You smell of leftism"

You smell of dog, LOL, but I'm not giving any clues as to how I smell, and I'm not sure what our personal aromas have to do with GGP.

@Floater, I've only got about 7 people I filter on the whole forum. There's others I filtered and then unfiltered because responses to them made me think they'd said something worthwhile. And others I said I was going to filter and never got around to it. Probably at least half who say they will filter don't actually do it. So probably some who said they were filtering you, didn't do it.

But it doesn't matter. I don't agree that it stifles debate. Shouting people down can do it -- zoros may not want to come back to engage with those who tried to engage with him, because of the hostility of some others. But filtering doesn't stifle debate, it just means that some people choose not to engage in the debate.

The right to speak freely is not the same as the right to be heard or the right to get a response. In fact, filtering is as much an exercise of free speech as commenting. The right to not listen, and the right to not respond, are as important as the right to speak. It is only dictators that require innocent people to listen.

@ChristopheB
Re: GDXJ.

Key info on this page: https://www.mvis-indices.com/indices/hard-asset/mvis-global-junior-gold-miners. Second qualification under "Size and Liquidity Requirements."

Presumably met that at the June review and should be expected to meet it at the September review. But almost certainly didn't meet it at the March review. Somebody else can do the maths to check and see, but the SP was low enough in the three months to the March review that volume in shares would have had to be very high.

The week leading up to Christmas might be interesting!

But of course, by then we might have sold our share of Hav, had a nice 18p dividend, and the share price could have dropped to 1p, then gone back up to 5p again on Scal drilling results.

@panama / Jerry, I also agree.

There's a difference between RRR and someone like zoros. Zoros has a brain and is giving the reason for his view. I am convinced his thinking is flawed, of course, but it isn't deramping, it's a different way of thinking about the SP / value. And while it is flawed in the way he stated it and the extrapolation he made from it, the point that no one really knows how much gold is there, and what it is really worth, is entirely valid.

@Bamps, I agree. I understand why zoros is saying what he's saying, but I AGREE with what you are saying. My wife and I went in on this, and in again, based largely on your reasoning.

@zoros "Can someone tell me what GGP is worth currently - before we actually know how much gold is down there?"

Sure. It's worth approximately 12.5p / share. That's what a willing buyer will pay and a willing seller will accept. It's based on the average market estimation of what the gold in the ground is currently worth, plus the average market estimation of the speculative value of GGP's other tenements.

Most investors here, based on the drilling results, think that the average market estimation is too low and that the gold in the ground is going to be worth more than that. But GGP is worth the average market estimation of 12.5p. That's the simple facts.

If you think that average market estimation is an over-estimate of the value of what is in the ground you should sell. If you think it is an under-estimate you may want to buy more.

But you are wasting time and creating confusion and conflict by trying to redefine the value to be a certainty rather than an estimate. It will always be an estimate, a guess. No one knows. When we get the MRE, still, no one will know how much gold is in the ground. There will probably be a lot more gold than is in the MRE. The MRE has to be somewhat cautious.

And no one will know what that gold in the ground is worth per ounce unless it is sold. If it isn't sold, it will become gold out of the ground, eventually. No one knows what that will be worth, either.

But you can't act as if AISC doesn't matter, because AISC will be a huge factor in whether or not the gold in the ground is sold or not. If AISC is going to be less than $200, like at Cadia, GH would be foolish to sell gold in the ground for $2-300.

I understand what you are saying but you aren't thinking straight on this at all. You can't say the value is only based on certainty and you can't say things like AISC don't matter. Of course they matter, because it will affect the future path and so affects the current value.

Share prices are forward looking based on future expectations, not on certainties. If you don't understand that you shouldn't be investing in shares, seriously.

@Teddy "I have heard often on this BB that IAG should soothe shareholders concerns and offer some comfort. This is not going to happen and until the union stuff is sorted everything will be conveyed in the worst possible light."

I agree 100%. People who get spooked by bad news / bad rumours on this share right now do not understand what is going on. It's in the company's interest right now to let those bad rumours run rather than to bring out good news to refute them. One of those rare times in the life of a company when bad news is good news, when it doesn't hurt if the market thinks you are in trouble.

Can we PLEASE stop citing their ownership of GGP as evidence of the value of GGP? I'm as high as anyone on this share. But this is a tracker fund and it says nothing about the company or its prospects that this fund owns GGP.

I know that Eric Sprott is a genius and his company is full of geniuses. But that has nothing to do with GGP ownership.

The ETF says it tracks an index: "Sprott Junior Gold Miners Exchange Traded Fund (NYSE Arca: SGDJ) seeks investment results that correspond (before fees and expenses) generally to the performance of its underlying index, the Solactive Junior Gold Miners Custom Factors Index (Ticker: SOLJGMFT). The Index aims to track the performance of small-capitalization gold companies whose stocks are listed on regulated exchanges." https://www.sprottetfs.com/sgdj-sprott-junior-gold-miners-etf.

Click on the Documents tab and read the prospectus to see how it works.

It tracks the Solactive index mentioned above. You can read about the index here:
https://www.solactive.com/Indices/?index=DE000SLA6V02

You can read about the composition of the index in this document: https://www.solactive.com/wp-content/uploads/2020/06/Guideline-Solactive-Junior-Gold-Miners-Custom-Factors-Index-v1.2.pdf

It has nothing to do with Sprott thinking this is a good investment, or a bad one.

If you are invested in GGP because you think Eric Sprott or one of his analysts chose GGP for their index, get out. Sell now, you are here for the wrong reasons. They didn't choose it. The index was composed based on rules, and so was the ETF. The Sprott ETF bought for one reason -- their rules told them to, and their rules were based primarily on GGP's rapid share price growth. That's it.

@zoros
I get what you are saying. Totally. And most of this conversation is people talking past each other.

But what you are saying is based on a misunderstanding of how markets work. Maybe you understand but that understanding hasn't flowed through to what you've said here.

Share prices are not based on what is proven. They are based on what the market thinks the shares are worth. I'll illustrate with another of my investments, BP. Mainly, they produce and sell oil. Earlier this year, the price of oil went negative. BP share prices did not. Why not? Because the market assumed, rightly, that the price of oil would go up in future. At that point in time there was no proven value to what BP produces, but the market valued it, anyway.

Were BP shares overpriced at that point in time? By the logic you've presented here, they were. But everyone knew that wasn't reality, that they have oil and they will be able to sell it for something more than $0/barrel.

We may not know exactly how much gold is there, of course not. When we do, we still won't know what it's worth. What's gold in the ground worth? What's THIS gold in the ground worth? It's pretty much a racing certainty that this gold in the ground is worth more than Solgold's because it won't take the same CAPEX and will be in production sooner. How much more? That's as much of a guess as the guess as to how much is there. We're now getting into very educated guesses. We're pretty well past the uncertainty of "will this be mined?" It's going to be mined. We don't know what the MRE will be, but even then, the E stands for "Estimate."

It's all guesses. That doesn't mean that the right value is 0 or 1p. The facts we certainly know put everyone's guesses well beyond that, rightly so. Your guess of $200 for gold in the ground is probably very low.

Yes, that value has been used at times in the past. The problem is that it doesn't really fit all that well with the very low CAPEX here, the high Cu concentration, or the rapidly increasing price of gold.

The value of gold in the ground is NOT directly proportional to the POG. Increasing POG does not increase AISC significantly. A large increase in POG means a large, if not equal, increase in price of gold in the ground. Gold is at historic highs, and likely to climb. We have the option to mine if the price offered for gold in the ground is too low. Your valuation is full of guesses, too, and some of them are suspect.

@Teddy "That said the situation is playing right into WW’s hands, a big **** storm facilitates negotiation."

Yeah, so do you think WW had someone drop the suggestion in that reporter's ear just to create the noise and facilitate the negotiation? Or is that just too Machiavellian?

@spoon, since karma kicked you, you don't need to kick yourself anymore, LOL. Hope you make it all back on your investments!

@Moonman, I'm absolutely certain WW and the Board of Directors have agreed he's going to be the fall guy for the union fight. He stayed on to do it, has probably hated the union for years and wants payback.

The stink of a rights issue that excludes PIs would stick to the BOD, too.

There's already been some very negative press on this: https://www.telegraph.co.uk/investing/shares/scandal-looms-diy-investors-ignored-firms-sell-shares-cheap/

They can only get away with it if it is an emergency. I think it would be hard for IAG to say they are in an emergency situation. I just don't see it happening.

"How would they calculate the cost at this point in time?"
Pretty clearly, it's to everyone's advantage to push forward on this. If that means amending the current agreement to make it mutually beneficial, that's what they'll do. If this question isn't covered in the agreement already, they'll just work out something.

It's a multi-billion dollar find. No one's going to be getting in fights over the cost of the decline.

@schlemiel, all good, for sure! The more gold they find, the better!

"Dividend tax is at a lesser rate than income tax I believe."
0% if within an ISA.

If within a SIPP, taxed at normal income levels in a drawdown (but 25% tax free), or if used to purchase an annuity, the annuity is taxed as normal.

If not in a tax wrapper (SIPP or ISA), £2K of dividends is tax free. Basic rate dividend tax is 7.5%, higher rate 32.5%, additional rate 37.5%. All subject to change at the next budget, of course.

@schlemiel "A hefty cash payment (monetisation) is far preferable to a taxed, unpredictable, unsecure dividend."

No doubt. Though the hefty cash payment would also be taxed.

But it depends on the level of the cash payment, doesn't it? And here's where we have to trust the BOD. If NCM makes an offer for our 25% of Hav, they have to assess whether the offer is better than holding and going to mining. If it's not, then those dividends will be coming.

That won't be bad for people like you who want to cash out, because if we have divs of 2.5p / year for the next 10 years or more, the SP will immediately be at least double what it is now, probably more. You could sell it all, or you could sell 75% and hold the rest to see if Scal hits, too. People who want to cash out don't need this to be sold, they just need the market to catch up to the value. That's coming.

A chance, sure. Likely? Not very. If there is a rights issue, is it likely that private investors will be excluded? There's a chance, but not very likely.

Reasons? I don't think a rights issue is needed. Still sufficient cash and still resources to draw on.

Why is a RI that excludes PI unlikely? Reputation. BA is getting a huge black eye in the British press right now over the unions. Everyone else is making thousands redundant but BA is catching all the flak. WW obviously thinks it is worth the reputational hit to take on the unions right now, but that gives him little room for other unpopular moves. If he treats PIs poorly, it will blow up in his face. He can't afford more enemies right now.

In my view, the risk of a rights issue is low but the risk of a rights issue that excludes PIs is very, very low indeed.

Annual production of 2 million tons au would crash the price of gold and affect the balance of world economic power. Perhaps you had 2m oz in mind.

Assuming AISC of perhaps $1000 / oz (I think that's too high) and POG of $1800 / oz (might be too low), you'd have US$800 / oz. Assuming byproduct-AISC so the copper is used to reduce AISC. In that case, with 2m oz, you'd have about $1.6B, of which our share would be £400 million. Depending on the USD/GBP exchange rate, you come out somewhere around 7.5p/share.

Some would of course be used for further exploration. 4-5p might be a good guess. Of course, there's always the question as to how long Hav would produce at that level, if it ever does. It still remains to be seen if we would be borrowing before that point, and if so, obviously, the debt would have to be paid.

The AISC is a guess. So is the price of gold. So is the production level.

I'd love to see plenty of money for further exploration and a regular dividend of 2-3p / share. That would boost the SP to levels that everybody who wants to be cashed out could sell and sell, and those who want to keep playing the game, at Scal and Rud and other current and future tenements, could hold and hold. If it went to 4-5p / share, well, Mickey would be a popular guy, I think.

If BP shares exactly tracked the price of oil, they would have been negative a couple months ago. BP shares are influenced by what the market views as the average price of oil for the future, not so much by what the price is today.