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GGP seems to be defying the market again!!!
I do wonder if the average PI is wondering if the opportunity here is as good as we think it is. If the tide turns here and the SP makes a move I can see a strong upwards movement here. Maybe the DTM or resource upgrade will be the turning point.
I would certainly feel more confident we were in control of our own destiny of the company was double its MCAP.
Serious question. Is there any way GGP buying 70% Hav and 100% Telfer doesn’t lead to hideous dilution for LTH. I would appreciate an informed view on what other likely options could be on the table.
Thanks
There does appear to be a curious disconnect between what GGP and its investors are doing and what NCM are doing.
Gold miners decision must be singular in focus. Profitable mining of gold. With NCM under threat it makes no sense to delay the upgrading of a value enhancing asset. I don’t know why NCM messaging is so underwhelming but it won’t be because they have intentions to sell it. Why would you talk down your own asset if you’re going to sell it?
There are a few missing pieces of the jigsaw here. Time will tell. More patience required.
Agreed Bamps - it’s all in the structure of any deal and the money raise solution. If we could borrow £1Bn and not dilute then our SP would rocket and we could then do a modest raise and pay some of the debt or pay debt on the basis of ongoing cash flow.
Bamps - I think we all love the idea of a 100% owned Telfer and Hav. It’s not the real question though is it. The real question is at what cost. Assuming an equity raise of 3 new for every 1 old you need a new 38p share price to balance the PI books. Whatever the offer - it needs to add value for shareholders.
Hi MF11 - you may be right about inflating the value of the 70% but a low Mcap is a problem from an equity raise perspective to buy that 70%. There is a small chance we get a ‘deal’ on Telfer but if Hav is as good as we are led to believe why would Newcrest or Newmont let it go?
Far too many permutations but I still think at our current SP a buy out of GGP is a risk getting done at sub 20p. All very interesting.
I agree it’s a win win either way based on 8.7p a share but I must admit the way this is now moving it feels more likely us PI’s will have to settle for sub 20p equivalent if GGP/Hav end up being sold. Really need SD to get an updated resource estimate out to shake things up and get our SP up. Our best SP in the last 12 months was under 17p!
Would be a shame to see the journey end given the long term potential here.
Great interview and very helpful insights by CB.
A change it control event won’t automatically trigger a right to buy unless the JV contract states it.
I can’t imagine NCM lawyers agreeing to this type of clause as it affects the ability of any buying company to value NCM and complete the transaction. Bear in mind also that NCM are the $17Bn company negotiations the JV before Hav developed. We were hardly negotiating the deal on equal terms.
So, I can’t see this Newmont buyout triggering any form of buyout clause. As Callum stated, Newmont are buying Newcrest because of their future project value and Hav is part of that.
Most likely that Newmont complete NCM purchase and then offer on GGP or look to sell Telfer and Hav 70%. Exciting times.
Anyone suggesting GGP own all of Hav under any scenario, please explain what this means to us PI’s.
Option 1 - massive dilution to buy 70% and more massive dilution to buy Telfer or fund a new processing plant?
Option 2 - ?
Vamps - I note your point about Newmont and exploration but I presume when you are as big a gold producer as they are that investors don’t care much for exploration. It’s all about ozs produced….
Good luck all.
One happy bi-product of all this is it might stop NCM Hav sell rumours and force business as usual full steam ahead activity until Newmont completes purchase.
The closer we get to first ore then the harder we are to ignore on my view and I can’t see this sale process concluding for a good few months.
Also think a GGP buyout becomes more certain with the new owners.
Interesting to see how market reacts this week.
LA - if there is a right of first refusal then that would change everything. Given that GGP can’t expect to raise £800M without help then it’s the terms of any help that would be of huge interest.
I can’t see first right of refusal on Telfer so that’s a major complication.
Not sure uncertainty equals SP upside but would be great to see 10p on speculation rather than 5p.
Good luck all.
Lots of noise for a Sunday.
I am always amazed that investors in GGP seem to think NCM place the same value on Hav as GGP do. Have you seen the size of their gold resources and inferred assets.
I’m not saying Hav and Telfer are irrelevant to NCM, or to a buy out but if anyone thinks your going to get a spreadsheet detailing the true value of Hav out of this buying process then your living in cloud cuckoo land.
The article spells out a confidential due diligence process and value will be attributed to Hav. NCM won’t need to openly declare this unless it suits them to do so.
If we get lucky then an unwanted bid for NCM May see a change in them talking up Hav but it’s far from certain.
Personally, the only thing that matters is if NCM get bought what changes this may mean for a GGP buyout or accelerate progress on the mining side.
Having bailed on GCAT for a big loss I would like the chance to get my money back but I would be amazed if sensible terms could be agreed for funding without significant share collateral being issued.
We were all expecting funding of 13M quid. Based on the mcap of £5M you’re looking at a minimum 2-1 issue ratio. With funding secured could you guarantee the SP hitting 1p again without some solid production figures?
As soon as dilution hits then I might consider investing again if RM is removed. Whilst he stays I wouldn’t invest again.
Sad state of affairs this….
Another news day another failure by the markets to respond. I feel that the markets / investors have now accepted Havieron as a proceedable project that will continue to grow in size so you have to wonder what is going to move the SP up.
NCM are not going to overstate reserves and its simply not in their interests to ‘big up’ the project for our benefit. NCM are sat on 61moz of proven reserves (June 2022 figures) with double that in the pipeline so whilst I am sure their shareholders are interested in Havieron it now just forms part of the background noise. Its just another line on their already impressive spreadsheet.
I also feel that FS and DTM are also priced in with GGP. It may de-risk the investment and attract some more institutions but at some point the remaining PI speculators are going to exit here. My best guess is this changing of the guard will occur over a period of time after the RNS on FS and DTM are given. Resource upgrades should help us break back into the 10p+ range in my view. 12p (+50%) by the summer would be excellent progress and hopefully give investors who subscribe to charts and Lassonde curve theory a reason to go long.
From there I believe there are five factors that could move the SP.
1 – The Gold Price. If this moves as expected back above $2000 and onto an all time high then all gold producers will all benefit.
2 – GGP sets out its business plan based on the newly generated free cashflow in 2023 and beyond and includes a dividend forecast or my preference, a share buy back. This would peek institutions interest and move us up.
3 – GGP gets bought out. If the gold price fly’s this year NCM (and other producers) will all have unexpected windfall profits. This could allow the new NCM CEO to revisit the opportunity to take out Havieron. This remains the most probable end to the story in my view. A 20p-25p £1Bn+ buy out based on the recent share price history would surely get the job done.
4 – GGP uses its free cash flow to invest in new gold producing projects. This would be in line with SD’s ambitions to grow the company.
5 – Discovering Havieron 2. This feels like a long shot based on the last 3 years exploration efforts but could transform the company in to a serious mid cap producer if we get lucky.
The only macro downside risk is a Gold Price collapse which seems very unlikely or mismanagement which also feels unlikely.
All in all, GGP remains a superb investment for those looking to the medium / long term. Its time as a day traders delight are hopefully behind us and I am backing the team to sustainably grow the business following the last two years challenging SP journey.
Good luck to all invested.
What a mess. There is a very real chance GCAT are insolvent. If the SP tanks to 0.25p tomorrow dilution won’t even be able to save them. Either way shareholders still holding here are on a one way ticket on my view.
Best case is a company sale to an established player but once the money lenders get their cash out there won’t be anything left for your average PI.
Doomed.
100% agree AP.
Feeling let down this week. I had my finger on the sell button of a 30% gain when we hit 1p three or four times before Christmas but I believed the funding RNS and felt that the company could be well positioned to ride the gold price wave.
Two weeks later and OCIM funding gets pulled. Could have still got out with a 5% gain but I held and then doubled down first at 0.6 and again at 0.5 to be presented with the Friday 4:30 RNS.
Robbie has until Monday at 8am to get another RNS together with a replacement non-exec, some funding update or exploration success otherwise it will be another 20%+ down.
What’s most galling is that funding is the route of the problem and the worst the share price gets the more dilution will be if they run out of external funding options.
Anyone have any views on a takeover position. Somebody is going to make these assets pay at some point. I just hope it’s Caracal.
Good luck to you all.