RE: correction11 Feb 2023 09:54
Telfer is the key to the whole area. Simples.
NCM cannot sell Telfer in on its own. Look at the current AISC vs gold price along with the available ore. It is a massive financial hole that will cost dearly in remediation costs once it is closed down. It has a nil or negative value on its own, it needs substantial and profitable ore to continue to exist.
NCM cannot sell their share of HAV without providing processing facilities (i.e. Telfer) nor can they sell without offering it to GGP as per the JV agreement. So there is (from NCM's point of view) an uncompetitive potential auction for HAV alone. They would still be on the hook for AISC +10% for the 30% they don't control (ours) and any buyer for the remaining 70% will insist on guarantees over processing facilities. With no DTM nor an updated MRE, the 70% will be undervalued.
It NCM do cobble together a deal for HAV(70%)/Telfer combined to anyone, then they will be left with all their other JV's in the area and no facilities to service them. So what do they do with these? Drop them and lose the investment that has been spent or include them within the overall deal.
Can they get a large sum of cash on a fire sale of either/both? Who knows, but if they just need to reduce potential costs to improve their balance sheet (to defend the bid), then they may well have to accept some sort of earnout deal.
If NCM recommend the buyout, they could leave everything unchanged for the new owners to face the same set of issues. Not a problem if the buyout is to gain production of future assets, but if the buyout is to gain ounces now, then the new owners may look to sell off non productive assets.
So, again Telfer is key.
Telfer could turn out to be an even bigger prize than the 5% present we have in the bag....
You need to look at the whole picture, not micro focus on only Telfer.
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