Member Info for TigerByTheTail

Hi The Chain!
You'd do yourself a favour to study one of those typical share price graphs of the life cycle of a gold junior, as it moves from initial exploration excitement, through the long slow slog of development, licensing and feasibility studies, and finally into production. GGP is currently at peak "hype", and it's all downhill from here. Especially as the drill results aren't really a major find (depth, difficult geology, and high costs make the gold that is there most likely uncommercial to mine). It's worth comparing them to Centamin's historic and near surface drill results at Sukhari - they were the real thing, genuine bonanza grades. Certainly, the idea that Newcrest is soon going to pay hundreds of millions of dollars to buy out GGP's remaining 30% stake in Haveiron is ridiculous.
I'd also recommend that you study the bio of GGP's chairman, Alex Borelli. E.g.: Take a look at the bulletin board for the now delisted BMR, where he was CEO and Chairman - that should REALLY make you worry about the safety of your investment.
Anyway, back to HUM now. And the blatant absurdity that you can buy 3.3 Hummingbirds for 1 GGP.

Hi Gold Gnome!
Thanks for the replies. I should say that I'm deeply uncertain about where the world economy is going.
Essentially, I see it as an arm wrestle between the Fed and fundamentals. The real economy isn't going to recover from the coronavirus shock easily or soon; that much is clear. So the question becomes, can the Fed goose the markets in such a way that they no longer reflect what is going on in the real economy? It appears that the answer to that is "yes", at least in part and for a while. (E.g. The S&P500 has become almost completely detached from the forward earnings of its constituent companies).
And yet, I still think the reality of millions of unemployed and thousands of failed companies must win out over the power of the Fed to print money in the end. Certainly, I don't see how stocks can go much higher at the moment, but I do see how they can go MUCH lower; so the risk/reward is skewed heavily and to the downside.
I'm not confident enough in my judgment to short the market, but I do feel more comfortable being out of it than in it at the moment.

RedJordy!
Unfortunately for you, I have done my research.
As I said, a 300m mcap for GGP's 30% share of a likely uncommercial project is ridiculous. So is talk of a 20m to 30m ounce resource - you're likely out by a factor of 10.
I confidently predict a 90% drop in the GGP share price over the next year as this becomes clear.

Hi GoldenBull!
It's both. HUM is undervalued at £90m mcap, no question. But GGP is absurdly, ridiculously overvalued at £300m mcap. It could easily drop by 90% over the next year.
Another example of ridiculous under and overvaluation would be to compare the mcaps of cash rich, debt free, highly profitable, low-cost rhodium, palladium, and platinum producer Sylvania Platinum (SLP), and the highly speculative, possibly fraudulent, Russian palladium explorer EUA (currently suspended from trading). This is an even more egregious example than the relative HUM-GGP misprice, which God only knows is bad enough.
There is a theory that claims that markets always perfectly price stocks, and that therefore the best thing to do is to simply buy a low-cost market-tracker. IMO, that theory is complete bullocks. Especially when it comes to smaller companies.

Hi Ctw!
If you want an example of the kind of crazy valuations that AIM can come up with, try this:
You can currently buy more than three Hummingbirds (mcap £90m) for the price of one GGP (cap £300m).
Hummingbird is a profitable and net debt positive gold producer turning out over 100K ounces per year, with substantial exploration upside.
GGP is an explorer who own 30% of a few holes in the ground in Australia; holes that probably will prove uncommercial to exploit owing to their depth and the costs involved.
Explain that if you can. I can't!

Hi Caterham!
I'm not disputing the basic investment case here - I'm just marking down this afternoon's rally to a share tip / quick pump and dump, rather than to a leak of information from the company.
IF we had evidence that Glenover was about to be sold, or the license for Star Zinc was about to be granted, well, that would be very different.

Hi Caterham!
I think this may be a false alarm as well. There are traders on Twitter boasting that they have already sold out for a fat and more or less instant profit.
Just another pump and dump...

The trouble is there is no "realistic level" for a stock like GLR. As things are now, it can't be priced properly by any normal methodology.
IF you think there is a route that means Star Zinc will be producing and selling willemite to Sable relatively soon, then this company is worth one amount. And IF you think that will not happen in the near future, then this company is basically worth next to nothing. As, as outsiders, we've got no way of accurately judging the chances of Star Zinc happening. For instance, I was not even aware of the licence difficulties that were apparently resolved in the 14th April RNS.

This could be a leak of major news. But this could also be a Twitter organised pump and dump.
It's hard to tell right now.
Only an RNS will make everything clear.

The RNS is about the buyback for the small, historical Australian shareholders of SLP. Essentially, that is a clean-up operation, offering to buy them out so as to simplify the share register (and consequently make it cheaper to pay dividends!).
SLP will report its annual results in August. That's when the big action will come. The company is in a position to pay a monster dividend if it chooses (10p per share?), or to announce a huge new share buyback scheme.

Hi Gold Gnome!
I agree that IF we must invest in stocks, Centamin is one of the very best - a gold miner, no debts, cash rich, long LOM, fantastic resource, solid dividend payer etc... And in a few months I'm sure all kinds of opportunities will appear to companies that have the cash and balance sheet strength to take advantage. Cash will be king. There will be distressed assets going cheap galore.
But I do wonder if (for us PIs) cash won't be the best position of all for the next few months.
The only way that asset values can stay this elevated relative to the crashing real economy is if the Fed and other central banks print huge amounts of money and hand it to the rich to invest in the markets. Let's call it "welfare for the wealthy", whilst the working class are losing their jobs and homes. If they do that, I think there will be riots in the streets. And rightfully so.

Having just posted that, I read this article, which sums what I meant up quite nicely:
https://www.zerohedge.com/markets/stocks-scream-most-expensive-ever-after-greatest-monthly-gains-1974
(Apologies for posting a ZeroHedge link here. They publish all kinds of garbage, but this summary of the past month is useful).

There's an old stock market adage - "Sell in May and go away until St. Ledger's Day" (i.e. September).
I'm thinking this may be good advice this year. There is a huge disconnect between the high valuations of financial assets and the slumping real economy. IMO, fundamentals are like gravity - you can ignore them for a short while, but in the long run they are relentless. If the stock market doesn't collapse before then, then surely dreadful Q2 earnings (July) will bring it down.
I've left a little money in Centamin and in Sylvania Platinum, but otherwise I've sold everything. Now I'll just wait and see what bargains may or may not appear over the next few months.
IMO the story will go - demand shock, mass unemployment and collapsing GNP, deflation, another stock market crash, US Fed money printing binge and announcement they will buy stock market ETFs as well as all the other junk they already have on their balance sheet, and then stagflation... It's that last one that will be REALLY good for gold, but we're not there yet.

Trust me, I'm not wanting in. Just look at the mcap - it's beyond crazy.
If there were a borrow, I might consider a short. But I don't think there is.

Absolutely. And I know what I'm talking about. It's my daily bread. These grades in these circumstances are NOT a commercial discovery. If they were close to the surface, then yes. But not at this depth.

Given the depth of the holes and the high cost jurisdiction, today's drill results are not "outstanding", as the RNS would have it.
My own description would be mediocre or marginal or simply "meh". You really need long intervals of well over 10g/t to make this kind of mining pay. Newcrest will analyse the results fully, of course, but my guess is that this "find" is going nowhere in the long run.
All in all, this share is wildly overvalued - maybe by 90%. There are good producing gold miners with smaller market caps than GGP!
I know all the rampers here will now pour insults on this post. In advance, I don't care.

Hi Spikeyj,
Precisely, the LSE will issue an RNS (not EUA) to the market if and when EUA is formally delisted.
I make "when" to be substantially more likely than "if" now. Very sorry for all shareholders, but investing in a small Russian resource company was always ridiculously risky.

Hi Lucas!
It's the Motley Fool - of course it is badly informed. Do you know who writes these articles?
$575m in CASH for Uganda is a very good deal for Tullow. The original deal was mostly in kind, and there is no certainty that the project will ever go ahead.
I'd say Oiluser is pretty much on the money with his analysis.

If Remdesivir checks out (as it looks like it will when they announce later today) then TLW and all other oil stocks will go straight up.
Gilead Shares will go to the moon, of course.

Hi Nonesgplease!
This drop on results is actually so predictable that I've now built it into my management strategy for my holding here.
As far as I'm concerned, it's the dip that should always be bought...