Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hi Zoros
For what it’s worth, I had the same question and raised it with another investor on a different platform who confirms there has been communication from GGP regarding the 50% quoted by SD. It states that he was referring to the increase from 2mtpa to 3mtpa not the resource/reserve. Just thought you may like to know.
Hi Jiffy
Thanks for the reply.
I think we can try and decipher how the brokers arrive at a figure but will never be certain of their methodology unless they share every minute detail. When you read the article that Zoros sent you will also find that BB state 'an additional 10m oz'. That to me means that their forecast of the sp is based on a total combined value closer to 14m oz if you add what was stated in mre1.
bottom line is i think bb forecasted share price is very conservative, and i arrive at this conclusion by noting our current price and the mre1 figures and comparing this to the information bb claim to be using for their figure. but we all know that Market sentiment has a big part to play too. time will soon tell!
GLA
Good morning Jiffy
What im trying to say is that while your figures based on Berenburg are understandable, i feel there is a disconnect between those and the current situation. The current situation being out of date is also correct as you say, however if we based the MRE1 figures of combined 3.6m oz @ 450$ then we would arrive at less than $500m market cap which is not the case. the market cap being closer to $775m with only 3.6moz confirmed means that the per oz figure the market is considering is actually around $700 per oz. this being quite a high figure i would guess probably also considers future expectations of havieron and other sites.
working from this 700$ per oz, if the berenburg calculation assumes 10m oz in the ground, then our 30% being 3m oz would be worth a whoping 2.1bn$ or 1.5b£ and that would take our share price to 38p which i feel is too high an expectation.
using the same figure of $700/oz but working at a more conservative 7m oz (inferred and indicated) at MRE2 would take us to 26p.
Hoping for good things!
GLA
Lots of big numbers flying about in respect of the mre and 5%. All genuine investors should realise the knee jerk reaction it will have on the share price if those numbers are not met at this stage.
Expect less and you shall be much happier than the opposite!
GLA
According to me, neither ncm nor GGP need a formal mre to know whats in the ground based on drill results. Negotiations have probably begun. If small investors like me are happy to keep the 5% if we get a low ball offer, then I don’t doubt that SD will also act the same. But what’s quite comforting is that arbitration is an available Avenue and I’m also satisfied with a fair value for the 5% based on a reliable third party.
Don’t see any serious downside for GGP shareholders.
GLA
how have we arrived at the current 14p ish?
yes, sentiment is a big factor and manipulation too i guess, but there has to be some mathematics as well?
anyone able to explain?
is it (very simplistically) 30% of 4.2m oz at about 4/500 bucks? but this doesnt cater for future expectation.
am interested to know from the more experienced over here
thanks and GLA
not very 'fair' for ncm to pay 5% of what weve found to date and not consider that there is likely to be more.
not very 'fair' for ggp to claim theres a lot more than whats proven to date, because no one knows
'fair' is to probably consider:
a) whats there, confirmed as fixed upfront payment
b) what they find as time progresses and considering change in costs / pog etc
surely such an arrangement can be made , and would be accepted by both companies and their shareholders?
GLA
Hi ProfQ
Thanks for your effort in working the figures out
Did the pfs not state a total inferred and indicated qty of 3.6m oz Au?
My simple maths /logic at trying to understand the current situation is;
Assuming $550 per oz and 30% (of36moz) to ggp gives a figure roughly equivalent to current share price of 14p
then the new combined will be a multiplier of the current. So say the new figure is double (7.2m) then ggp share price should expect to be 28p all other things remaining equal. this is assuming the current figure has not put any further expectations above 3.6moz!
not accounted for anything else as its too complicated, but ofcourse realise theres a lot more involved!
would be good if other more experienced LTH would let us have their more detailed and accurate thoughts on what we can expect
GLA