Member Info for TakingMyTime

@Chain
I'd be very, very surprised if the JV agreement allows Newcrest to sell Hav. The JV agreement might possibly allow them to sell their share in the JV to Rio or Barrick or whoever, but I'd actually be surprised if it allowed either party to sell their share at this point without the approval of the other.

But if they can sell their share, that share would give the buyer the right to continue what NCM is doing and to very soon own 70% of Hav. If they wanted to make an offer for GGP's 30%, they would be free to do so. Or, if they wanted to buy out GGP's share now, they could negotiate a price for the 60% that reflected the fact that in a very few months they'd have half of that 60% for almost nothing.

If the suggested buyer, or NCM, is going to buy out GGP's share of Hav, neither they nor GH will be able to ignore the fact that the 60% is about to become 30% at very little cost to the buyer. That WOULD be reflected in any agreed price. Nobody is going to say, "Well, we think have is worth £5Bn and we're going to pay you £3Bn for your 60% share," when they know they'll have half of that 60% in a few months. Just won't happen. And GH isn't likely to turn down a great deal for the last 30%, if it is offered, even if he still technically owns 60%. Why would he do that?

If he thinks the 30% is going to be worth £2 Bn and they offer £3 Bn for it, he'll take it and not quibble about the other 30% that he's losing soon anyway.

@Mushroom, that's my second genuine LOL today!

Mushroom, you utter those words and then, as she looks at you aghast, you say, 'Not really, babe, just a 1% market fluctuation. But WOULD YOU LOVE ME?'

If you were so unwise as to get yourself into that position, the proper reply to her question would have been, 'Would you still love me if it were down 20%?'

FWIW, price of gold in pounds was down over 5% on the week, almost 3% on the day. GGP has done a lot better than that.

Ok, trucky, I'll try to shorten them. I do a lot of writing in my work and I do get on a roll sometimes.

@MFU "absolutely superb debate "

Your name could have been included. Thought you made a great point earlier, "IMO these high grade business people could definitely come to a mutual agreement."

Absolutely agree. If both sides want to do a deal, there are ways to find a win-win, now or later.

@trucky
LOL. Literally, I laughed out loud.

I type fast. And I'm off work this week. And I take my time to make investment decisions, thus my screen name. And, I do like to explain my thought processes, rather than just express opinions, which I suppose is rather egotistical.

Anyway, thanks for making me laugh. I'll be working next week....

Four more minor points that don't really detract from your father's main point, with which I agree, but which it is probably good to have clarity on.

1. "the idea that these big players would invest in any company without an income stream is IMO, highly unlikely."

I disagree. If an II believes that the company has assets that substantially exceed the market cap, and if their investment strategy is to seek capital growth (rather than income), it's a racing certainty they'll be giving a long hard look. If they believe there's a reasonable chance of those assets turning into cash within a reasonable time-frame, they'll buy.

2. "An MRE and perhaps, FTSE memberships would also be needed/helpful."

FTSE memberships come with requirements that, at this point, the company does not want. I think this is unlikely.

3. "Why does he want to pay an arm and a leg for the other 30% and **** off the junior partner in the process with an undesired (assumption) approach."

I don't think this is well-founded. Why would it upset the jr partner to offer to buy them out? They can always say no. GH goes back to the BOD and says, 'Hey, mates, NCM is interested in buying us out, do you want to enter discussions?' They say, 'Yes' or 'no' or 'how much'? If it's no, GH phones SD and says, 'No, but thanks for asking.' Who's upset by that? If it is 'yes' or 'how much', how is that causing a problem?

4. Finally, your father suggested the joint approach is how NCM likes to work, which appears to be the case, historically, and therefore they are not that likely to change. That seems true, but then he also acknowledges that exporation/mining combined is historically not been what happens, and suggests that may be going to change. A little awkward to use history in one case and ignore it in another....

All that said, I tend to agree with his conclusions. I do not think GGP will be bought out entirely. I put the chances at less than 20%, unless Barrick or someone else comes in and starts a bidding war. I think NCM likes the way things are going, and are happy to stick with it. I think GGP is likely to end up with a mining division and an exploration division, and make a lot of money over the years. I put the chances of a buyout of Hav at somewhere between 20-40%, definitely higher possibility than full buyout of GGP but still less likely than not.

But I'm guessing. Thanks for your very thought-provoking posts, to you and your father.

"I don’t think greatland will have a choice"
Greatland will always have a choice as to whether or not to accept an offer for their share of Hav.

They will also always have a choice as to whether or not to recommend a buyout of the company to shareholders. Unless the offer is well over 50p, more like mickey's 74p, I would guess a lot of shareholders will follow that recommendation.

I for one would accept 25p if GH recommended it, because I'd assume he has a better estimation than I about what the assets are really worth. I would also refuse an offer of 50p if he recommended against it, for the same reason.

I can't think I'm alone in that. I think GGP is likely to always have a choice, because I don't think NMC will offer so much money that investors would ignore GH's recommendation.

@Chain "Fair comment TMT. We shall see, either way I don't see how we loose with either scenario. It's good to be in greatland."

I agree, absolutely! I also agree with your / your father's conclusions. But if the bid should come in after all, wouldn't want people to be confused about what's going on.

I also do not agree with this point:
"Everyone would like to see the SP significantly higher, but for this to happen. GGP bill board members need to ask themselves just WHO is going to buy at 12, 15, 18 and 20p to get it there ? It is possible that the Hannam material may attract some new HNW PI’s and just perhaps, some smaller II’s. I think it is fair to say that many existing PI’s profess amazement that nobody is buying at the current ‘bargain’ price, yet few are even topping up themselves ??
My personal opinion is that if you want to see the share price move materially higher,, we need to see big II’s, pension funds, sovereign wealth funds etc., get involved."

I'll give one example, Liontrust UK Smaller Companies. They have over £200 million under management. They say:
"To achieve this aim, the Fund will invest in a portfolio of UK smaller companies’ shares, the majority of which are contained within the FTSE Small Cap., the FTSE Fledgling and the AIM indices. Companies within the Fund that graduate into the FTSE 250 Index will be held until a suitable replacement company is found."

GGP is now squarely in their target range, moving into the AIM index. Sprott invested perhaps around £2 million into GGP and we saw how it moved the share. If this fund were to invest even 1% into GGP it would be another £2 million -- but now, Sprott has taken out the shorters and a lot of profit-taking. If another fund like Liontrust (and they are not the only one) were to come into this with even just £1 million, you'd break through more resistance and leave 12p behind, and maybe 13p, even without any further news. If they put in £2Mln you'd be bumping up against 15p -- and there are other funds.

I don't think you need the big beasts to drive this SP up. There aren't enough shares outstanding for that to be necessary.

I absolutely agree that the intent with Hannam was to increase the SP. That, and the Sprott investment, has cleared the first hurdle, it's put this share firmly in the AIM 100. It will probably take either really good news or another II to take us up much, but the II doesn't have to be a big beast -- we're now in the range where a lot of smaller beasts are going to be sniffing around, and probably taking a bite here and there, as well.

@Chain, great post and thoughts. Recommended both, even though I disagree with some points.

I'll start with the big one. If NCM moves today, they do not have to buy 60%. The fact that they currently technically only one 40% is irrelevant. They jump from 40 to 70 for pennies. If they want 100%, all they will do is simply say, "We'll buy you out now (talking about Hav, not all of GGP) for a bazillion dollars" (or whatever it is they've decided to pay for the remaining 30%).

If GGP says, "That's not enough, we still own 60% of it," they'll say, rightly, "So? We're going to own 70% of it if we spend another few million dollars, and we're going to do that. So we're only talking about moving our ownership of that 30% forward a few months from when we would have had it anyway. And it's not producing, so those few months are irrelevant." And they are, so GGP won't say that.

If they want to buy 100% of Hav, they could do so now or later, the 30%/60% discussion is irrelevant to that. Several people have mentioned that, and it's understandable, but it's really not the case. NCM says they have a clear path to 75% ownership, and they do. The last 5% of that is going to be expensive, of course. But they really only have to do 25 or 30%, and they could do it now or later -- if they want to, and if they can agree a price with GGP for it. I don't expect that to happen, in part because of some of your father's other thoughts, but the 60% thing is not at all a barrier to them making a move now.

There are no AIM 100 trackers.

There are, I believe, funds that will not invest in AIM outside the AIM 100. Those funds will now be able to look at GGP. Whether any will buy is unknown.

Moving into the AIM 100 does not mean automatically there will be new institutional investors. It does mean that more IIs and PIs will look at GGP and may invest. You may see people like LF Gresham House Micro Cap and funds like that coming in. Or, you may not.

@Deanmck7
Your opinions may not be nonsense, but your assertion that I quoted is a nonsense.

1. You've taken a probably-inflated CND estimate (these people are hardly unbiased) for the entire life of the project and turned it into an >annual amount<. Even the CND never said £205Bn a year. That's absolute lunacy.
2. You've determined that tax avoidance is £50Bn a year. Official estimates are in the £35-40Bn range. Of course, they could be wrong. But there's more reason to believe their estimate than yours. But the difference £10-15Bn, not a big deal.
3. You've ignored the cost of ending that tax avoidance. It will have four costs. A. Increased regulation on UK companies (the law-abiding ones), reducing profits and therefore Corporation Tax, also probably reducing employment and therefore Income Tax and National Insurance. B. Increased investigation costs, more inspectors, etc. C. Because of A) above, increased incentive for companies to move more of their operations out of the UK, decreased incentive to come here, with knock-on effects on CT, IT, NI, and probably VAT. D. To the extent any of the above reduces employment, increased benefits costs. These (A-D) are real costs in the real world. How much will they cost? No one knows but it isn't zero, and you assumed it was.
4. You ignored the security cost of abandoning Trident. We know China, Russia, and Pakistan have nukes, and Iran might, or might be getting close. If history teaches anything, it is that while there are bad people in the world you need to either defend or deter. There is no defense against nukes, there has to be a deterrent. If we abandon Trident our defence relies on the resident of the White House. That comes with significant costs, moral and probably monetary. You may wish to rush into the arms of the Donald but I do not.
5. You vastly understated the impact of coronavirus on the UK budget. It's going to cost over £300Bn this year alone. You've accounted for less than £100Bn.

Your opinions may be valid. There's certainly an argument to be had about Trident and about whether we are doing enough about tax avoidance. There can be legitimate views about what the real costs are, and what the cost of reducing tax avoidance would be, and what could be saved by eliminating Trident. Many people will have legitimately different opinions about those things.

But the numbers you used were a nonsense, and I stand by that. If you want to advocate your opinions you should do so with numbers that make sense.

Not according to Warren Buffett. Who is wrong often enough for me not to care.

But the time to buy them was last month....

Hi, young-one. I got on board at 240 when it was still on its way down. I didn't know where the bottom was but saw a phenomenal value at that level, so didn't care. I knew at some point the value would come through and didn't want to miss it if the bounce started. So I got in higher than you did.

My exit point is probably around 6-700. I can wait ten years for it, if I triple my money over ten years, I'm pretty happy, especially if a few dividends show up along the way. Not expecting divs for 2 years and maybe up to 5, depending what happens, because the cash position needs rebuilt.

This share could drop like a rock again if the news is bad (second wave, continued quarantine). If fear of that bothers you, maybe sell some of your shares and lock in some of those lovely profits. If you don't care because you think it's worth a lot more in the long term, then ride it out, the drop may never happen anyway.

Some people sell investments "way too early" to pay off a mortgage or pay for a wedding or whatever. These are individual decisions. Everyone's target will be different because they have different long term views, goals, etc. Some are looking for a quick profit (you've got that, baby!) and others want something that's going to pay off even more and are willing to wait for it. If the longest you want to stay in is a year, no one can promise you this will be higher in a year than it is now. It might be, maybe a lot higher, but no one knows. If you can stay in a lot longer, this probably has a lot higher to go. No promises, but that's what's likely.

If the share goes to 600 in 1-2 years, I'll re-evaluate. Was my target too low? Or do I still think it's going to be 6-700 in 5-10 years? If the former, I'll stay in, though if I'm not certain I might sell half my holding. If the latter, I'll probably get out, and say I made the money I expected to make, it just happened faster.

Don't be afraid to admit that your first target was wrong. Don't be afraid to take profits and sell some or all of your shares -- if you think the price is high, get out!

Always drilled into me -- will you hate yourself if you don't sell the shares and the price drops and never comes back? Will you hate yourself if you sell them and the price goes up? Which would you hate more? If you would hate yourself more for selling them, hold. If you would hate yourself more for holding them, sell enough of them to flip the equation. If it's even, then sell enough to tip the balance. I've found it a good general rule.

Good luck!

@hydrogen
If it stops at 2nd gen "occasionally", totally agree. The problem is for too many people it becomes regular, and then something stronger is needed.

Enjoy your bike ride! I'll go do an old-man stroll down the street. By the time we get back, maybe we'll be richer!

I need to practice what I preach, though, and sell some shares somewhere. I invested almost all my cash after the crash because I didn't think I'd see this kind of buying opportunity again. Some of my shares are up 40-50% now and are making me nervous. Not this one, though, not nervous here at all.

@hydrogen
"Takingmytime - I tend to disagree ,wholeheartedly... Losing sleep is part of life. And If you're not sleeping well a simple solution is to exercise longer and harder (If possible). It's the best antidote. Along with a large glass of red wine and a couple of 2nd generation Antihistamines like when you're really stuffed."

To each his own. But if a guy pushes his blood pressure sky high, gives himself a stroke, and ends up dead or crippled, that money might not seem so important. Just saying.

I will say that if you've got the discipline to get that additional exercise and it solves the problem, then the investment is good for your health, lol. The antihistamines, not so much. Once you start down that road, it can get ugly.

@DeanMck7
"Given the renewal of trident costs circa 205 billion and the amount of offshore tax avoidance that's lost is circa 50 billion.

Stop these two for a year or so and the country will be fine. "

Sorry, but this was a nonsense. The furlough is a fraction of the cost. Thousands of small businesses are being destroyed. That means hundreds of thousands of people moving onto benefits instead of paying taxes. VAT and Corporation tax receipts are being decimated. People on furlough are getting a fraction of their income, and that means lower income tax, lower national insurance, eventually lower inheritance tax.

Lower incomes means lower house prices, which means lower stamp duty receipts. Lower share prices means lower capital gains tax receipts. Hardly any driving recently means petrol duty receipts were microscopic for several months.

The costs of this are astronomical.

" You have already decided that BA's version of events must be more truthful than Unites."

I disagree with this evaluation. One doesn't have to accept BA's version to be convinced that Unite is a thoroughly dishonest organisation.

I had the unfortunate experience years ago of being a union member and learning from bitter experience that the union personnel are more interested in their own power and remuneration than in the interests and well-being of the people they supposedly represent. Since, I've learned that not all unions are like that, but Unite has managed to convince me that they are driven by their own political agenda more than by the well-being of the workers. I hope WW crushes them, and the BA staff find a way to get better representation.