Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Bamps - I agree about dilution - as long as it is being used for investment to grow the company.
SD has to ensure as he builds the team and salary bill this can be supported from revenue - and this does not require dilution. Many AIM companies sit for years with no growth and keep funding the BOD in nice lifestyles with no gains for shareholders and often dilution for shareholders. However I do not think this is what SD is about.
Consolidation - I also have not great experiences of this - and I think it's all about choosing the time - I think it's OK if done with good news - like a big hit with the drill. So lets hop.
Topped up again yesterday. Tempted again today but off out.
WF - Telfer now has two open pit mines and a separate underground operation.
The mine is one of the oldest in Australia, producing around 6 million ounces of gold between 1975 and 2000, when operations were suspended due to high operating costs. Work resumed in 2004 and the mine up to end of 2018 has produced over 5 million ounces more, producing 425,536 ounces in the 2018 financial year alone. The mine also produces copper, generating 16,212 tonnes of the metal in 2018. Think it also produces silver.
Produced 416,000 oz's Au in last year according to NCM report and 13,000t copper.
Hav will be much bigger than Telfer IMHO in terms of production, but all the gold copper and hopefully other metals are in a much smaller ore-body in much higher grade. And Hav still open at depth and other directions.
ProfQ, I think many are excited at news of drilling plans at Black Hills and Scallywag.
Any good results will be brilliant news for GGP, but we must also acknowledge we are looking for a needle in a haystack, and if the drill does not find anything, it gives information to analyse and determine where to look next.
Had05 was stunning and I really do not know if we will see Hav type grades again, but let's keep hoping.
Ben - I am also confused about the 5% and arbitration. I read on Telegram (day off today so have more time) a post saying GGP/NCM are still trying to come to agreement on 5% before going to independent arbitration. I also saw posts on here suggesting some has seen email saying we had gone to arbitration. I'd have expected RNS though if this had been settled either way.
Be nice to know for sure.
Liam - good luck with the new group - and I will join.
I suspect like some others - lack of time stops me reading boards on LSE and telegram fully, and I read several boards on here - not just the GGP board - even although this is by far my biggest single investment.
Filters - I do use on here - simply because it saves me time reading posts I am really not interested in - but I have never reported any posts - I believe people are free to post what they want, and we have to decide their motives. I would however report any report I though was abusive or broke rules and guidelines.
I think the loss of loss of Hydro and Costa diminished this board and I miss their posts. At least Bamps and Paddy and several others who I feel I trust continued to post here. The level of research and information sharing on this board/share surpasses anything I have ever seen, and I am hugely impressed SD has met with shareholders and communicates openly with SH's through interviews.
I have had a bad experience (SML) where a lifestyle BOD led SH's down the garden path - and continue to do so - I never got out early enough and not worth exiting now.
AIM is a dangerous place, and people should take great care, junior mining exploration is tough - but I am very happy here invested in GGP. Hav is great - and we may strike elsewhere. Nothing is guaranteed but CB has found one monster ore body - lets hope he can repeat it.
Hi Doublehun - I too hope you are proved wrong and PI's have still the majority of the shares in GGP. But it is very hard to know. The GDXJ rebalance has been perfect for the shorters - put them back in driving seat - and they are looking clever now.
Just topped up again today, have seen the predictions of 7p - who knows - but if this drops more - many PI's will be buying I think.
I do not think the 5% will be resolved soon. To buy 17% of GGP at current SP - £68.5m. But of course cannot be done - if someone tried to buy 714m shares - demand would be huge and SP would rocket - don't know who has been accumulating but would be interesting to know and to know how much shares they now have.
In the last 18 months I added 377K shares from 11.5 to 13.7
The 12 months before that I added 426K shares from 15.5 to 33.5 - I started buying April 19 at 1.68 - and how I wish I had added a lot more then - but still very lucky - although SP now about 3p above my average.
Have never sold any - like many holders - very low risk from here - only thing stopping me adding more is lack of funds.
I have some other junior miners I had hoped would be much higher by now - to sell and put here - still a bit of time though I think.
I do think our SP is being manipulated, but if someone is accumulating a large holding - nobody seems to be able to see it - even those with Bloomberg Terminal.
For a long time I have been of the opinion NCM would have been better accumulating 17% of GGP instead of pursing the 5% option. You'd own 5% of hav + all our other tenements. But I do not think they are - you would need in excess of 700 million shares. I expected maybe a high wealth hedge fund might accumulate GGP when the SP dropped.
For a long time I thought you had to declare your position at 3% holding, but many say only if you have finished accumulating.
Are NCM withholding size and scale? I can certainly see how many think this - and yes they could be.
But Hav JV has a management ctte, and GGP have access to all the drilling data - I'd like to think as soon as NCM have this - don't know what the legal terms of the JV say about GGP right's to publish their analysis - but as SD already did GGP MRE must be OK.
I often think - and I could be well wide of the mark here - that Hav is not the highest priority for now for NCM - the FS is a priority, but they already have PFS and decline is underway, and they know they will start receiving extremely high grade ore - hopefully in 2023 feeding Telfer, and bamps has already alluded because of the high grades - AISC could be very low - quickly repaying CAPEX and providing profits for CAPEX for the bulk underground mine.
I am sure the selective mining plan of high grade ore gives NCM some breathing space in planning and building the bulk underground mine, while using this time to get more drilling data, and explore inside the Hav blocks - with much future drilling done from underground to save having to drill through 400m of cover.
NCM expenditure on Hav has been quite low when you compare it to purchase costs of Red Chris and Pretium - and on those 22 projects they also need to drill, explore and have more CAPEX spend to get the growth and increased production they require - and these will be high priority projects for NCM - along with continued development at Cadia - the cash cow.
Hav has been bargain of century for NCM - stunning JV deal - and nobody could have envisaged how big Hav is likely to become. Like all shareholders - I'd like to see a much higher SP - but I will need to be patient - and the junior mining sector has been in the doldrums and I am hoping sentiment returns to this sector soon.
MH01 - don't know if that question was for me? I do not know what the 5% will be valued at. For the starter mine, capex is $US 73m + the $US 50m loan costs - and this has contingency of $20m US. I certainly hope the 5% sale will exceed this but I do not know. We are very fortunate Telfer already exists.
I also know the accounts showed a cash outflow of just over £4m. Hav mine development costs 6 months to end Dec 21 was £5.7m and we have £25m of liabilities and just over £12m assets (thanks largely to the £11m raise by SD). The report seems to say we have used just over $27m of the $50 loan facility up to end of Dec - and foreign exchange movements ($ strengthening against £)have not helped our position with this - although these could just as easily move in the other direction.
I will be glad when the 5% is behind us - and hoping for a large cash injection into the GGP coffers. SD is building a very strong team - but it costs - and will hopefully benefit us all in the long term.
I have been holding here since April 2019 - wish I had been brought here sooner - and had kept adding ever since that date.
I completely agree with the contribution to this board by Bamps21 - selflessly shares his research, paddygall encouraged me when I came here first and there are many other fine contributors to this board and I miss hydrogen's input - a loss to us normal PI investors in my opinion.
Sandeep a bully over the 5%? That is not my opinion - business is business - NCM smartly entered that clause into the JV - we will never know why - it may have been to help GGP with development costs, and to benefit NCM.
SB has a duty to NCM shareholders - and whether we like it or not - this means acquiring the 5% at the lowest cost he can legally for NCM shareholders - as per the terms of the JV - which we will never know fully - this will be a large legal agreement.
How I think SD played a blinder by issuing the GGP MRE - and only time will tell if the independent arbitrator comes down on SD side or SB side. If he chooses SD valuation, this will be a bit of a bloody nose for SB, but NCM have deep pockets and will still get 5% at a very good price, as the true size of Hav will not become apparent for years.
I posted a very long time ago - don't recall exactly when - if I was NCM I would have started building a position in GGP when the SP was late single figures or in the teens - I think buying 17% of GGP would have been more cost effective than buying the 5%. Anyway - interesting we are back at around similar levels of SP now to where we were when I first started thinking about this.
I still think someone has been accumulating shares at sub 15p - but it's impossible to tell who.
Anyway - lets hope we get some positive drill results in 2023 - and some more news of drill going into ground on 100% owned land - SD says slow and steady exploration is the most cost effective method - but IMHO this means some drills going in ground every year.
GLA
I also agree with tiggerman - really enjoyed the show from London last night - and the drone display was spectacular.
Panama - agree with everything in your post.
No point speculating about the JV negotiations - but NCM were firmly in the driving seat here - having negotiated many previous JV's with undoubtedly a huge legal team advising - and also with Telfer nearby and nearing the end of it's life. GGP had great initial results from the deep drilled holes, but needed a JV partner to provide money for drilling, and I beleive GH/CB chose wisely with NCM due to Telfer and need for a find to feed that mine ASAP - and do not forget SD has said he could not beleive how good the tolling rate is for processing GGP % of Hav ore.
When the Juri JV was negotiated, my thoughts are that Hav required much more drilling expenditure than was envisaged - due to the size and excellent results, and NCM were probably spending a good bit more than the JV stages required, so NCM justifiably wanted to get to 70% ASAP, and the point when GGP had to start paying their share of drilling costs and capex. GGP would have struggled to get finance for this from the market, and no appetite for further dilution - so again NCM provided the $50m loan and drove a hard bargain on the Juri JV. NCM were in a much stronger position than GGP.
Would SD have managed to do a better deal - we will never know. Also SD was saying he'd have bought Telfer for a $, but that would have been a huge gamble - I think Paterson and Hav will feed Telfer for years - but we did not know that at the time.
We are in the period where patience is required, until we get to production and start getting revenue. I have been convinced by Hydro, Costa et all that the SP is being manipulated - but personally I have continued buying all the way down. Have made significant purchases in 2022. I am reassured about my stake here by Bamps/Paddy et all. I read and listen and make my decisions.
Now I read Tymers posts yesterday - and he always goes on about greed. I am fortunate I have funds to invest (through hard work). I am investing here - realising AIM is high risk - hoping I'll succeed and be able to help my kids and grandkids have a better life. Like many I was brought up in a council house with hard working parents. So if investing to try and make my families life better is greed then I have to accept that.
Tymers also said not trading is based on greed - I wish I had traded this share - I never held because of greed - lack of time and yes probably ignorance - not being an experienced investor. I accept learning when to sell and take profit is the hardest thing to learn. But with GGP - I really beleive the risk from here is very low, but many will take fright and sell thinking there are quicker profits elsewhere.
GLA. Read, research listen and make your decisions.
Bamps - as usual excellent post.
I posted last night - Australian coal exports produced 2 x CO2 emissions of all the combined Co2 emississions from the whole country of Australia.
However I don't think the emissions are their problem - it's the end users of the coal - what is Australia's problem is how to replace jobs and income to the economy when undoubtedly the mining and use of coal stops - which will be way before O&G ceases production.
I'd imagine if you looked at oil and gas and did the same comparison with Saudi it would be multiples of double that countries emissions.
But going green is expensive - and many will not be able to find the money required - big mining companies will invest in solar/wind as in the long run it will save them a fortune - and help their reputation - which is incredibly important now.
https://climateactiontracker.org/countries/australia/
This is the climate action tracker for Australia - and does not make good reading - compare with UK https://climateactiontracker.org/countries/uk/ which probably has one of the better records.
Every country will be challenged with finance - how to pay for all the change.
Australia still mining and using coal - in 2021 exported coal from Australia gave twice as many emissions as the whole of Australia the country produced.
Coal I think will be target #1. Australia has been expanding use of natural gas and I believe this will continue as an interim measure like it will in many countries.
Mining is a very large employer in Australia and is the biggest sector accounting for around 10% of GDP. They are going to have to scale back coal, and will be more than happy to replace it with mining for metals needed to meet 2050 net zero targets IMHO.
When you look at NCM and GGP - they know they are going to have to generate power from solar and wind.
Australia has huge solar potential.
Interesting discussion though.
Trying to be optimistic - Q3 is only 6 weeks away - but being pessimistic FS could be 4 months away
Again thanks for an excellent blog, also bought some more today - did not get in below 5 but happy - could not resist
I know - I've been trying to buy sub 13 for a couple of weeks - spread has been wide - gave up and bought 37576e today at 13.1175. Happy with that - and pretty sure I am going to be taking more, if they drop it sub 13 I'm taking some more.
Bamps - you are on fire this morning!
I think Hav alone makes GGP and attractive T/O target - maybe not quite yet but in time - if we have a "hit" on some of the other properties (less as Juri JV as NCM have already done the deal there) - this might accelerate a T/O offer.
For me I think it's worth holding - at Hav alone I think we will not know the full size of the ore body for many years, but NCM will need to know before they design the underground mine, but even the underground mine can be developed in stages, but they will want to know highest average grade areas to go for these first. So once they can drill from underground and easily go deeper, some well spread exploration drills then infill drilling in the most promising areas.
For NCM - they are maybe looking 10 years ahead for the balance sheet - so if it's 15 moz or 50 moz, most of those oz's will take take decades to come out - great to know you have lot's of oz' in the ground, but the shorter term 5 - 10 years production profiles makes the most difference to the balance sheet.
I do hope there is much more found in the Paterson - preferably by us. Telfer/Winu may not be the only mines that will be in the Paterson.
I honestly don't know when I'll sell - but not until I think I am getting something approaching fair value - and I don't think that will be 50p - but that depends on success with the drill. Many thought would be tempted by 50p if the offer arrived quickly, if it was further down the road, don't think it would be so attractive. Don't think many would take 30-35p. Many in AIM are looking for quick profits and not long term holds.
I have kept accumulating, and yes bought quite a lot in 30's and 20's - but my average is still around 7.5 but going up as still accumulating.
GLA.
I've had a fill order sitting at various prices was 12.9 yesterday and today - only for 40k shares - but not filled - and price has dipped below this a few times.
but the remaining 25% GGP and their shareholders will have a lot more choice on what price to accept. for the remaining 25% of Hav is how that should have ended.
Good posts. If NCM decide to "remove GGP" from Hav - they will have to be willing to pay the price. SD only option for the 5% is what the independent arbitrer decides, but the remaining 25% GGP and their shareholders will have a lot more choice on what price to accept.
GGP are also in another JV - Juri - but I also agree NCM are very much in the driving seat on that JV. From memory there are timescales to be met - not had any updates but think we are now on stage 1 - $3m Aus spend and NCM own 51%. Then another $17M Aus within 3 years of stage 1 and NCM up to 75% ownership.
So not much there to worry about for NCM.
We have other attractive acreage in Scally - so NCM may want to keep a good relationship for this - but we need to find some interesting results from the drill. Scallywag 2022 plans "2022 exploration drill programme designed to test ground EM conductors at Pearl, Swan and Swan East" and SD has already made it clear slow and steady is the plan - so we may just have to be very patient.
Hav buyout - I am sure SD and the team will already have a realistic valuation figure in mind - I really don't think they want to sell - and although many shareholders would sell if the offer was right - not sure NCM or their shareholders want to go that high. Problem is we will never know the true size of Hav until we start drilling from underground at depth - and Hav still open in many directions including at depth.
I am continuing to add at these prices.
still 2.66 million and increasing - from April 19 till now - been adding all the way up from 1.65 to 33 and down. Not sold 1 - wish I had in 30's but that would have been to buy back more at lower cost - no time for trading though.