Member Info for TakingMyTime

Sure, more people will work at home now. But mass transit is now deemed to be risky.

We've had government and press doing their best to scare people into complying with the lockdown by emphasising, over and over again, how risky this is and that is. Are people just going to forget it all and jump on buses and trains without a second thought? Some will, of course.

Others won't. They'll drive. And electric cars are expensive, and have their own environmental issues.

I expect more cars on the road, not fewer, post-coronavirus. I think BP will be fine in a few months.

I forecast that the price will go up. Or down. Or more likely both. But probably more up than down. In between it will surely go close to 350. It will likely drop close to 300 and maybe lower. Unless I'm wrong.

I'm usually right but not always. It could go to 375 or 400. Or 280.

Donald Trump will tweet multiple times in the next two weeks. He might tweet things the market likes, and it will go up. He might tweet things the market doesn't like, and it will go down.

No one can forecast with Trump will do (maybe especially not him). No one can forecast what the Chinese will do. Or say with certainty whether there will be air bridges announced this week or next. Or whether the r rate will climb or drop.

How can anyone forecast this share price? One can try to estimate the value of the company and the share price will probably eventually get close to that. But it might takes months or even years for that to happen. The markets are even more manic depressive than usual.

How will a forecast from anyone help, especially from anonymous people on the Internet? We've seen drastically wrong forecasts on this board over and over again just in the last week. How will you know who is right? Do Your Own Research, don't rely on anonymous forecasts.

Here's a forecast for you -- if you rely on other people's forecasts without figuring out how to research companies and decide which ones are good investments, you will probably lose money. Lots of it.

I don't think this type of analysis works. The value of Hav to NCM is greater than the pro rata value of Hav to GGP. The JV will pay NCM for Telfer processing. That will also keep the mining of Telfer more economical.

Hav is worth far more to NCM than to GGP even if the JV were 50/50.

"Takingmytime - $400 per oz on the ground? Highly unlikely. I don’t believe anyone has ever paid that much for any gold."
I didn't say we'd be offered that, I said I'd be surprised if we accepted less than that for our share of Hav.

"By the way - the acquisitions generally happen for producing mines, so your point of “this WILL be mined” is irrelevant."
Some are, some aren't. People are suggesting this acquisition would take place before production. Many other finds are purchased before production.

"Also, how did you get AISC of $800? I’m sure many have calculated this to be between $1000 and $1250"
Telfer is $1250 right now, with a much lower grade of ore and lower Cu production. All fixed costs for processing are borne by Telfer right now. Fixed costs will be shared in some proportion by Telfer and the Hav JV, reducing AISC for both. Between the sharing of fixed costs, the higher grade ore, and the Cu byproduct, AISC will be significantly lower for Hav than $1250. Without knowing the exact terms of the JV how much lower would be hard to estimate.

The AISC at Cadia is $132. I would be very surprised if Hav is that low. I would be very surprised if it is over $800, with what we've been told of the grades. Admittedly I'm not a mining expert, so perhaps I am wrong.

If the AISC is going to be ~$500, GGP should not sell for less than $400 / oz. We should mine before doing that. By the time the gold comes out of the ground it is likely to be worth over $2K, so at an AISC of $500 that would be a value of $1500 / oz. I'd rather wait for that than settle for $300 / oz today, even if it required some dilution to raise necessary funds.

@Investor81
You've asked some good questions that don't appear to me to have been fully answered, so I'll take a stab at it. You're asking how to arrive at a valuation per oz and legitimately cite takeovers of other juniors at very low prices / oz compared to some of the numbers here.

I took a look at what was being paid for jrs before my wife bought in here. I'm convinced this one is different, for the following reasons:
1. The copper. Either you have to add a significant value, above and beyond the gold value, for the Cu, or you treat it as offsetting the price of production. The latter method should drive the AISC very low.
2. Telfer -- no uncertainty about mining. This WILL be mined. Telfer is right there and hungry for more ore.
3. Telfer -- low CapEx. Because Telfer is right there, the CapEx will be low. Sure, the JV will pay NCM for processing, but that's not comparable to the CapEx needed if Telfer weren't there.
4. Jurisdiction. This mine is in a safe and stable jurisdiction, none of the jurisdictional risks that would impact the price of some of those others.
5. Ore grade. This ore grade is significantly superior to the grade of some of the other recent acquisitions.
6. Economies of scale. It costs money to dig a decline, etc. All those fixed costs are going to be spread over what I'm guessing will be more than 8m oz, maybe a lot more. Larger finds are worth more.
7. Early production. NCM is in a hurry because Telfer is hungry. This resource is not going to take five years from now to start producing.
8. JV agreement -- 5% @ fair market value. The result of this is that GGP will not be desperate for cash and so not hostage to a low offer. It also means that GGP is in a position, if an offer is unacceptable, to say, "No, we'll mine."

There are a few other factors as well, but that gives you a sense of my thinking on it. This is not SEMAFO or Otis Gold. Some of the factors above may apply to some other juniors acquired recently at lower prices, but none apply to all of them, as far as I can tell.

I would be shocked if GGP accepted an offer for the remaining 25% of Hav for less than $400 / oz, and I think that's conservative. I suspect if we just hold it and go to mining the AISC will be well south of $800 and so the value (as mined) will be $900ish, or more -- and the price of gold is rising. It could well be $1200. As GH has said more than once, Telfer significantly derisks this and he wouldn't be saying that if the cost of using Telfer were going to be overly expensive.

Obviously if we sell it rather than mine it we would receive significantly less. My expectation is it will still comfortably be more than $400 / oz, though perhaps some of that would be an ongoing royalty stream -- upfront cash might be significantly less.

Thought I 'd respond because I had looked at this question.

@TomE
Have had some experience with people who abuse certain substances, and it skews their perceptions of what happened. They generate "memories" that are very real to them, and seem incapable of letting things go. They've been "wronged" and they keep saying so and they believe it.

If that's the story with your stalker, he's to be pitied. He's probably spending 10 times as much time turning this over in his mind and re-persuading himself of how badly he's been wronged. He'll have events in his life that he'll blame on you and it will keep him from responding to them appropriately, and thus his life will just get worse.

Maybe that's not the case but the style of writing is very familiar to me. If it is the case, eventually he'll find a new enemy and generate new "memories" of what that person did to him, and you'll recede out of his consciousness. It's unfortunate.

It would be best, if that is the case, if people just reported him and didn't respond, other than to say something like "reported for stalking," so others who may not know the story will get clued in.

Consider yourself fortunate that this is just on a BB rather than in real life. It can get scary in real life. Good luck.

"Surely the market would reflect the fact that Hav will no longer be an asset from point of announcement?"

Yes. It would also reflect that a big huge pile of cash would be an asset. Hav out, cash in. If the cash is more per share than the current SP, the current SP will go up.

If a dividend is then announced, then the market will value the share with the coming dividend in view. Then, it will go ex-dividend, that means the dividend will be paid to the person who owned the shares before that day. So on that day, the SP will plummet, because the people buying that day don't get the dividend.

Might want to read up on dividends and how they work if you are going to be investing much in shares. It doesn't usually have much impact on this kind of share, but on a lot of them it does.

If your shares are held in an ISA, any dividends paid would go into your ISA.

Do your own research but I think it will confirm what I've said. Good luck with it all!

No one knows if NCM will even offer to buy our share of Hav, or at what price.

No one knows whether they would offer a "we'll negotiate if you want out" or a "we want to make an offer you can't refuse."

No one knows whether Barrick or Rio or Newmont or some venture capitalist wanting to get on the gold express might make GGP an offer they can't refuse for our share of Hav.

No one knows whether we might learn on Monday that Barrick or someone else has already acquired 3% of GGP and is on the prowl. No one knows, if something like that happened, if there would be a bidding war.

No one knows whether it would be possible, for a JV of Scal with some other miner, to do a deal with NCM to do the processing at Telfer, and what NCM would charge for that.

GH may know some of these things, but we don't know any of them. There are many, many free agents who will freely make their own decisions that they believe best benefit them, and their decisions, many of which are unknown, will determine which options GH has. We can certainly speculate about what MIGHT happen or which we would prefer but we have no way to say what the best decisions would be because we have no idea which options will be available.

You might prefer to sell GGP entirely but if no one makes an offer, it isn't happening. You might prefer to mine Hav, but if NCM makes an offer GH can't refuse, that isn't happening. You might prefer to sell Hav, but if NCM doesn't make a good offer for it, and no one else does, we're mining it. I'm pretty confident GH will try to maximise shareholder value but exactly what that looks like we can't know because we don't know what options he'll have.

Of course everyone knows all this but some of the posts today / last night sound like some of it's been forgotten.

@Cobrakai

I think there's a significant chance that the SP could drop precipitately in the event of a sale of Hav -- and that you'd be very happy, anyway. Let me explain it.

I'm just going to throw a number out, with no idea whether it's reasonable or not, to illustrate. Suppose NCM offers to buy our share of Hav for the equivalent of 30p / share on Monday, and GH says, "I'll take that."

Our other assets are all speculative, the market might put a value on it all of 1-2p / share. So if Hav is valued at 30p / share, the SP would immediately shoot up to around 31-32p / share.

Now, let's suppose GGP decides to retain a lot of money for future exploration costs / to acquire further tenements. At the levels we're talking about, they could retain £200mln and still pay a 25p special dividend.

Once paid, the SP would drop significantly. There'd be cash worth 5p in the company so probably not below 6p, but who knows? But we'd all be holding 25p/share in cash. A pretty good return on investment even if the SP drops to 3p, wouldn't you say?

The point is, if you've made your return on investment via dividends or via SP, you've still made return on investment. There might be a big tax difference, but someone who cares about that could sell their shares after the div announcement and before the ex-div date -- the market would certainly be paying a high price for the shares to cash in on that special dividend.

@mickey "15m oz What u guys reckon?"
Not possible. I have it from an absolute authority that the proper SP is 74p (without even knowing if we have any gold anywhere else).

SP/m oz is perhaps 3p (I guess that's what Numis used).

Ergo, resource must be 24.667m oz.

The logic is infallible and the source for the future SP is surely impeccable. Surely you'd agree?

@stuart "can you really see GH selling out early after those results, No, sorry but I cant"
Not likely, but as always, depends on the price, doesn't it? NCM could always make an offer he couldn't refuse, they "Hav" the resources to do that.

Thanks for the discussion. Sadly, I'm about to disappear into a work bubble for the rest of the day, you all must keep an eye on GGP for me and make sure RIO doesn't steal it while I'm not looking!

@CTC "Sorry TMT I can now see that my post appears to direct the $1700 comment to you."
Hey, no apologies needed, no offence, your post wasn't directed towards me, and you made a good point. I was just enjoying the discussion!

I agree the MRE is likely to use a conservative POG, perhaps a little beyond $1300, but closer to that than $1700, probably.

But what will POG would GH accept in a buyout? I'd hope higher than the one in the MRE, because the actual value is likely to be higher than that. The number in the MRE may drive the price of NCM's 5% buyout, but the used for the final 25% will be determined by what GH agrees. Time will tell!

@hydro "I just posted a fact. Somebody didn't like it."
FWIW, when I read it I thought it might get taken down. Because even though you said you had permission to divulge it, LSE moderators had no way to confirm that you did indeed have such permission. And usually, the people who gave you permission, if they were going to announce it, would announce it themselves.

Quite surprised you got an enforced holiday rather than a warning but not surprised your post was taken down. I'd have done the same if I were in their position.

Glad you're back.

@WF, surely HL would let you buy NCMGY, won't they? Look into it, and into ADRs, maybe.

Hi, Stuart. My spreadsheet has an input for when the buyout is made, and another for the market POG. I'm discounting the market POG by 5% in all scenarios. I'm discounting it by an additional 10% if the buyout is made in 2020, 7.5% if first half of 2021, 5% if 2nd half, 2.5% if first half of 2022.

That's to reflect the additional discount I think NCM will want if the buyout occurs before Hav starts producing.

So rather than play around with POG to reflect the discount, I'm using scenarios for POG and then playing around with the discount. FWIW.

If the buyout happened today I think the net (after discount) POG used might be something like $1550. But obviously, I'm guessing, I don't know what GH and SD are thinking. That's the way I'd view it if I were in their shoes. We can all be glad I'm not.

""On a related subject though I am very curious as to what is going to unlock the big II money."

Hi, JC.
I have been wondering this point, daily watching the interplay between buy, sell, offer prices... I wonder if one of our more 'connected' members could ask someone in the know. Surely this BB has SOME connections. "

We won't know until it happens. No fund research department in this space is going to be telling ANYONE that they are looking at a share -- because people would buy in on that news, driving it higher.

I do think it's pretty certain that joining the AIM 100 will unlock some restrictions and draw more fund scrutiny. Whether that will result in buys, time will tell.

WF "They are looking at NCM, Telfer and Telfer's value. Pushing through some high grade ore makes differences to Telfer's AISC which in turn feeds into profitability for Telfer and NCM. This will forse an increase in boo asset value of Telfer. Basicall there is no direct relationship with UBS's view of NCM value and GGP's value."

Excellent point and well-stated. For NCM, the Hav JV is immense because it rescues Telfer. This WILL be mined because of Telfer.

And that's the reason I also bought into NCM.

Hav is an even bigger win for NCM than for GGP, in absolute terms. It not only means they make money at Hav, it also keeps it economical for them to keep pulling gold out of the ground at Telfer.

In percentage terms, of course, since NCM has other major assets and GGP doesn't, it's much more important for GGP.

@VS thanks for the nice comment. Believe me, I've noticed what has happened with the shares with almost entirely PIs. If I'd bought when Nige first tipped it to me I'd have almost a ten bagger now. And I looked at it and said, "Very interesting, looks good, outside my risk profile." So I know what PIs have done.

But it was the Sprott buy that finally put 10p behind us for good. PIs might take us up to 15p, maybe even to 20p, but in doing so some of the current holders are going to be taking some profits at those levels -- and we'll still probably be well below what our share of Hav is worth, let alone Scal. I could be mistaken but I don't see us catching up to the actual value until some big buyers come in.

@Nige, yes, my overcaution causes me to miss some opportunities / fail to fully capitalise on some of them. But the money that I'm playing with here is money I could afford to lose, but would rather not. When my retirement is assured in safe investments, then with money beyond that I'll start to be more aggressive. Maybe I'll also retire then and have the time to really properly research more of the opportunities.

But THANK YOU, Nige, for your tip on this one! Mrs has already made more than 30% on this one in a month! Incredible to think, with that kind of return, that we're still immensely undervalued.

Snow globe.

@CTC "Those figures may be revised upwards a little, but it might be unwise to use $1700 in any fag packet calculations."

Yes, but.... There's a big difference between NCM using a figure that they are announcing to the public and me using a figure in making my investment decisions.

They have to be very, very cautious. If they were using $1700 I wouldn't have bought their shares because I wouldn't trust them. They need to plan for eventualities, the well-being of their staff, their bondholders, and their shareholders depends on them not getting it wrong by over-estimating revenue.

My investment decisions are based on a range of likely scenarios. I have my fag packet in a spreadsheet with multiple columns based on multiple scenarios / variables. I certainly don't cover all variables and my scenarios didn't include coronavirus. But the point is, I'll not be using $1300 for the POG in my investment decisions. I've got scenarios at $1500, $1700, $2000, and $2500.

I think average POG being lower than $1500 over the next five years is so unlikely that I don't need to worry about it, it might be $1700, more likely $2000, possibly $2500. That's if this is a hold. If either GGP or Hav is bought out it's likely to happen when the price is near $1700.

NCM won't pay $1700 because they are buying gold in the ground that they can't even start to get out for a while. So they'll pay a discounted price for it. But using $1700 in evaluating investments isn't a bad starting point, IMO.