George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Cheers, Paddy - I still can’t wrap my head around it. Wow. Just like that, our excitement over the next two years will include 6 weekly updates on the eastern breccia growth and all the suspense that goes with it.
Hope all is ok at home!
Why are there high grade sulphides on that side of the dyke?!
I thought a new discovery would be a couple of km away, not connected to the main orebody.
The Eastern Breccia already gave us ridiculous 200m to 300m intervals over 2 g/t, but now it’s giving high grade sulphides. Also, just look at the HAD 104 assays still outstanding…more to come!
Remember when there was argument (ridiculous) over whether the eastern breccia was economic? It’s now becoming the star of Havieron.
That alone is the most extraordinary drilling update I can recall over the last 18 months..
25m ounces is becoming more and more conservative.
My preferred scenario for the 5% deal is a method that would be (a) be fair to all parties, and (b) not have to ‘guess’ at any of the unknowns. This method would include a per oz premium, and only take into account indicated / reserve ounces to date.
Let’s assume MRE2 contains 2.5m indicated ounces, ultimately to be included as reserves in the updated PFS. Thus the negotiation would be based on 125,000 ounces (5%).
Now we must find a fair premium for these ounces, and of course I’m going straight to the Pretium deal as representative of recent fair market value. Our ore body is more economic as we have copper (Brucejack AISC over $900), though our ounces have a few years before they come out of the ground. The key, though, is that to date we have contributed capex for this 5%, which must be accounted for to our benefit (again, strictly for the inferred ounces in MRE2). We’re effectively selling our HGZ ounces in which we’ve already contributed to the mine build, thus I want a premium of USD 775/oz.
That’s just under $100m to GGP now, knock off the loan balance and we have a nice pot of operating costs for the next couple of years to ramp up exploration, all while HAV goes into production. Also, a bank balance to assist with debt financing for HAV.
For Newcrest, this gets them their 5% with limited capital up front, whilst being able to wax lyrical about the resource growth requiring this approach.
Going forward and as the 5% grows, we get a cash payment every resource update, though agree a hefty discount as a sweetener for NCM, say $350/oz per indicated. Depending upon the rate of proving up the tenement, this could be an additional $20m - $40m a year to GGP, over the next ten years plus (who really knows how big this thing is).
This protects the time value of NCM capital and limits up front cash, whilst satisfying our short to mid term cash needs. It ensures an additional revenue stream for us, and keeps the JV relationship health. It also keep NCM honest - this is the type of ‘fair market value’ they’ve shown in the Pretium deal.
Most importantly, it protects the markets perceived value of Havieron for both companies. The market would say ‘wow’, whilst both companies win.
Joined 7 Jan 2022 and his first post on GGP was 15 days ago. Knows all about this BB history, yet you couldn’t see posting history over the past several weeks …
They come and go, based on tonight’s outburst it seems this name is nearly up. On to the next one.
And what if he isn’t a troll? Well, then just a cautionary tale to the children of why you shouldn’t eat paint chips.
Fact: Phelps wears socks and sandals. Get a life, pal.
Every few weeks a new one turns up. Phelps turned up 2 weeks ago, surely a new one is just around the corner.
Anyways, top-up Thursday tomorrow, think I’ll go for a nice round 77k shares.
Thanks Prof, good read.
This is the bit that gets me, Hydro, as I think looking at the Pretium deal gives real insight into Newcrest current mindset.
We know they paid $2.9b for Brucejack, and we know that on proven reserves it is say $700/oz, though using indicated figures you get in the $300/oz range. We also know we have copper and a more economic / profitable mine based on current info. Brucejack, whilst having amazing though sporadic grades, has had its issues. Put it this way, it’s no HAV.
If they’re willing to drop that kind of capital in rural Canada for 100% ownership, I just don’t see them stopping at 5% with us when they already own 70% of a mine sat in their back yard. Unless they have categorically chosen to keep GGP alongside for some strategic purpose, I just can’t find any reason to think they won’t try - it makes too much sense for them.
It makes you wonder what language is in the JV agreement - if I was GGP and wanted to see the asset into production over the next 30 years, I’d be looking to sell 1-2% royalty stream, (a) for a sizeable cash injection, and (b) a small dilution of our interest to a separate party might deter any takeover. This then clears the way to move towards being a multi asset company.
Surely anyone should buy into GGP for the suspense and game theory alone ;) All very positive and the only way is up - it’s just how high and for how long!
I don’t know why, but I can’t let this go. That’s not what you said, this is what you said:
“If the 5% valuation is based on the MRE2, which in turn, generates a SP of 25p (ish), GGP will be worth £1.05Bn. If GGP then sell their remaining 25%, say at the end of the year around about the DFS stage (when they plan to sit down to discuss the way ahead, re: bulk underground mining) and the SP "doesn't move from its Feb 25p, GGP will sell their Hav portion for atleast £5Bn extra. Making them a multi billion pound company.”
Zoros, that’s what I took from your original post in this thread, as well as the follow up at 933am.
You corrected your earlier calculation to be £1.05b (25p) for 25% of HAV at the FS stage. You also think MRE2 alone should put as at 24p. Just a bit all over the place.
You also said Havieron is a ‘medicocre find’! If that’s the case, not sure we are in the same side. No need take my post as aggressive, I just see too many battered PI’s trying to justify they deserve being in the mid teens as some sort of therapeutic exercise, as opposed to fair in ground value of some of the worlds most economic ounces, with a clear path to production.
We’ll both reap the rewards in due course, so all good!
Zoros - to be clear, you’re saying you want to sell HAV for 25p (£1.05b) the ‘end stage’ being FS?
You posted earlier:
“Before you spray a "Z "on my front door and tarnish me a troll collaborator, please DYOR and understand why 3.4Moz = 15p. When the MRE2 comes out = 24p. Each incremental MRE = +Xp.
The 5% valuation = +Xp. Term sheets = +Xp. The DFS = +Xp.”
Which is it? I’ve seen you recently try and be a voice of authority on the company, sp action and shorting, and frighteningly a lot seem to listen. It was better when you stuck to your road maps :)
Good ol Scally ;)
The end is near, SD’s little Christmas week gift ruined their plan and now what will be pesky GDXJ buys might finish them off…unlucky! Money is returning to our unloved sector. Remember 2020? Here’s to the return to true value, nothing but respect to all the diamond handed apes who held in there and improved their average.
I agree, Hydro. Fair market value…well what’s recently been paid fairly in the market?
These ridiculous £50m figures being thrown around, a lot of FUD and battered investors. I can take our current reserve only number (1.6m oz !) and get to £50m just by using what Newcrest recently paid Pretium on a reserve basis. BUT…based on current AISC our ounces will contain an additional 40% profit margin than those at Brucejack (Pretium), who has no copper. Are our reserves worth more than $750/oz to a buyer, given the amount of capex we’ve already contributed?
So the £50m above is based on a fraction (reserves) of a fraction (PFS) of a fraction (MRE2)…because MRE2, again, is a fraction of HAV. And then you might have another orebody within the tenement reveal itself in the coming weeks…..
If we start getting over 4m oz inferred in MRE2, all bets are off in terms of the 5%. Surely Newcrest would consider this a good time to just go all the way…
Well this is quite a long discussion based on incorrect data :)
Pretium is the key comparison, and your low end per oz. figure is quite a ways off.
Important : THE MINERALS RESOURCE FIGURE IS INCLUSIVE OF THE MINERAL RESERVE.
Brucejack has a Mineral Resource of 10.3m oz, and within that figure is 3.9m oz of Mineral Reserves. Hence the remaining 6.4m oz is a mix of inferred, indicated and measured.
This is why the range of the Newcrest deal for Pretium is from $300-$700 per oz.
And the key here….Brucejack AISC is currently about 50% (or $300) higher than Havieron. Brucejack has no copper. Thus if we were taking ounces out of the ground today and we’re going to be bought out…we’ll you get the idea!
It’s all about the economics of Havieron, people. Not just the ounces (though we’ll blow that metric out of the water, as well!). And don’t forget all of the capex we’ve already contributed for the PFS starter mine…