Sprott initiates research on GGP - Shaun Day

[Costa]

We need to determine what “build start” is. Decision to mine, decline / early works infrastructure or production related.

Apologies replying to myself, but this would infer we have already passed build start and as such, 17p applies now. Any thoughts?


40B03EE0-96D7-436E-942F-24FCA8E56A1E.jpeg

I would say it has already started. photo_2022-07-12_14-29-51.jpg

Zoros. Care to address this point ?

[CanisLycaon]

Zoros wrote: "Time to take a deep breath and reassess one’s goals and ambitions, I suspect." Yes - it's a different kind of investment from what it was in 2020.

What happened to the share price in 2020 was speculation. The return to these levels is logical and the logical thing to have done at the time would have been to recognise it. In my opinion, it's not going to happen again driven by the same general enthusiasm. The numbers don't support that level of pricing in the short term and - it's possible - a lot of investors are no longer interested.

However, the aspect of the Sprott initiation note that interested me most - as an investor not a would-be geologist - is the emphasis put on SD's track record and potential to build a Northern Star mark 2 over a longer term.

In my opinion, there are companies to look for short term speculative returns - what some posters call 'dream shares' but most of the time turn out to be nightmares - and there are companies to look for long term investment. For me, the note has called time on imagining speculative-level returns driven by surprise news or short-covering etc. But it has convinced me of the case for long term - I am thinking several years - investment.

Yup, a good post CY, thanks, and pretty much where I stand now, and have done so for some time.

The only comment I'd make, apart from that, is that, it appears, you're essentially limiting your view to Havieron alone, and that does, IMHO, appear to be increasingly common now with shareholders and/or potential shareholders.

I believe that Havieron, on the whole, will look after itself, bar, of course, a 100% buyout, which, BTW, I believe is inevitable at some point, but, as for the price?!!

However, don't forget that we have a significant portfolio of other tenements in the Paterson, and elsewhere, which were built up by the views & expertise of both Gervaise Heddle, and the ace in the pack, Callum Baxter!

Should we hit major gold/copper/nickel/cobalt mineralisation in any of these, and especially, of course, the 100% owned tenements, then we could certainly see another multibagger on the sp in the short term!

[zoros]

Costa, morning.
Your 1219 today - I don’t understand why you want me to address someone else’s post?
Z

[College Yard]

Zoros wrote: "College yard, then I assume you have automatically taken into account that Ggp@Hav might not be there in a couple of years?? NCM won’t carry a junior for the fun of it (imo)."

Hi. I was interested to read those paragraphs saying SD has rebuilt the old Northern Star team to navigate Greatland forward. I don't think he would have done it if he anticipated being bought out by NCM - nor might they have taken the job. Obviously, nothing can be ruled out and noone can see the future - but I would say the signs are SD sees it as a possible risk but not a probable outcome.

[College Yard]

CanisLycaon wrote: "The only comment I'd make, apart from that, is that, it appears, you're essentially limiting your view to Havieron alone, and that does, IMHO, appear to be increasingly common now with shareholders and/or potential shareholders."

Hi. No - I'm thinking along similar lines to you - and Sprott and SD and the team too - that Havieron will provide long term income and Greatland move forward exploring a portfolio of projects as a 'Northern Star mark 2'.

[_J_C_]

Costa, morning.
Your 1219 today - I don’t understand why you want me to address someone else’s post?
Z

Zoros, afternoon,

What are your thoughts regarding the “build start”? Would you now be of the opinion 17p applies to the present time and not 2024?

[CanisLycaon]

Greatland Gold management backed by Sprott to deliver at Havieron

“In these markets more than ever, to extract the full value from the opportunity we prefer to back the team over the asset every time.”

https://www.proactiveinvestors.co.uk/co ... 87370.html

[lebugue-addick]

The Sprott report makes uncomfortable reading in some respects and has factored in to their modelling a 5% settlement for Havieron of $84m Australian dollars as per the extract below:

"How an independent valuer decides on one or the other (of issuer suggested valuations) is unclear. For now, we model an average of the two, for A$84m".

They equate this to US$56m.

Sprott also models a capital funding requirement of $93m Australian dollars (Table 4, page 8) - equates to US$62m in addition to the already in place US$50m.

One can envisage Shaun having plenty of meetings with the banks this week and next, thrashing out those term sheets.

The quicker this 5% is out of the way the better. Not long to wait now hopefully.

[CanisLycaon]

The quicker this 5% is out of the way the better. Not long to wait now hopefully.

I agree, but, of course, with the best possible outcome for the company, as of course you do too.

It's been clear for some considerable time now that Shaun Day has been frustrated (increasingly?) with the legacy issues, namely the Havieron 5% NCM additional option, and the Pacific Trends Resources contingent liability.

As you say, we'll all probably be much happier when these are all resolved, and we can look forward to a 'clean sheet' going forwards with our excellent MD!

[zoros]

Morning JC.
I'm not sure if Sprott are referring their 17p to now (build start), that is why I have emailed them (naively). Knowing I won't get a response, I am hoping someone speaking to SD in person today will bring the Sprott report to the top of the agenda.
As I said before - 17p as a projection, should ring alarm bells.
My only hope is that their quoted price/ounce of gold is based on the market value of GOLD IN THE GROUND and not PoG, full stop. If it was to take the latter into account using our $643aisc / PoG:1850 / 25% ownership, then the SP should be north of 40p..............................ahhhh...........I feel better already.
Let;s see if SD has a view on it.
Best
Z

[HopefullyGold]

So many take aways from it, - another block to make this share stronger

I would like to think that as a independent source of information the Sprott report was, or will be submitted to the chair for the 5% judgement along with GGP's MRE2. I think Shaun's pulling a lot of strings behind the scenes we are yet to hear about.

[Bamps21]

I don’t believe we are in build start yet, we only have approvals for an exploration Decline.
Build would infer all the below ground infrastructure for the stopes.
Sprott indicate 13.3p for Jun 22
I think the 17p indicates a forward projection with high risk still placed on the resources

[CanisLycaon]

The quicker this 5% is out of the way the better. Not long to wait now hopefully.

It's been clear for some considerable time now that Shaun Day has been frustrated (increasingly?) with the legacy issues, namely the Havieron 5% NCM additional option, and the Pacific Trends Resources contingent liability.

As you say, we'll all probably be much happier when these are all resolved, and we can look forward to a 'clean sheet' going forwards with our excellent MD!

Well, there you go!

https://polaris.brighterir.com/public/g ... ry/xeg9vjw

[College Yard]

Zoros wrote: "As I said before - 17p as a projection, should ring alarm bells."

Hi again, Zoros.

To be honest, it doesn't ring alarm bells with me - I see it as a short term target and fairly reasonable reflection of the situation as it is right now.

I keep in mind 2 other figures - 1) SD bought shares at 14p and 2) the chairman said at the AGM that he thought mid-20s was about right.

From these I infer - 1) that SD thought 14p was a fair price to pay for shares and 2) if an offer comes along for the company then the chairman is thinking along the lines mid-20s as a fair offer.

So - for me - 17p sounds about right for a company at this stage Sprott thinks can be built into a Northern Rock mark 2.

Anyone of us might think something different but - for me - it's a helpful indication what Sprott thinks, what the chairman thinks and - possibly - what SD thinks.

[zoros]

bamps @ 1109 - thank you, finally some clarity.
so the 17p is a "projection" of the SP value of the company at or around "build in" time, circa 2024/5. When the underground structures commence.
my question about the sprott 17p was partially answered @ 1209 in the podcast in that SD stated the valuation was for 25% of the mine not 30%, so adding another 20% of the 17p puts us at 21p ish. Not far off Berenbergs 22p.

I accept that these figures encapsulate contiuing high risk hurdles, which appears to be the norm for junior explorers and developers, so in time, this valuation should realign for the better.
Thanks again Bamps.
z

[Costa]

Just extrapolating, for fun...that 3.4p being the 5% equates to what £142,800,000 on that basis. Not saying 5% will or will not be that.

Bamps says 'fairly short term target'

Zoros, do you consider short term to be 18 months?

[lebugue-addick]

Extract from page 14 of the Sprott report regarding shares in issue:

Shares in issue (FD, m)

June22: 4,277

June 23: 4,812

June 24: 4,812

June 25: 4,812

June 26: 4,812

Anyone know where the 4.81 billion figure comes from given Sprott do not think equity dilution is necessary? That would be another 535m shares over the current year.

[zoros]

LBA - Having looked at their financials, all I can come up with are the 4.02Bn on issue and the PT 145m , then we add in the directors lot, making a total of around 4.2Bn.

Costa - evening. I'm assuming you're talking about the 18 months (short term) being relevant to the 17p plus 20%?
Yes in that case I see the end of 2023 as being 'short term'.
Is that what you were after?

[It takes time to respond on here while awaiting someone to respond, so apols if I'm not with you on this}.
Z

[Costa]

No sweat on time taken to respond.

To short term or not.

It's all about the lens we each look through and our tolerances to things like investment style, risk, and even trade style. And also what we may interpret from associated material. Personally i don't think 18 months is short term but that is my lens. Bamps will have his own, and Sprott will have theirs and it's clear from this thread there is a variation in those views.

And on top of all that we all make our decisions.

For me, when investing, short term is less than 1 year. It is certainly not 18 months. I'd welcome the views of others?

PS
To confuse matters...If trading, short term can be minutes.

[_J_C_]

bamps @ 1109 - thank you, finally some clarity.
so the 17p is a "projection" of the SP value of the company at or around "build in" time, circa 2024/5. When the underground structures commence.
my question about the sprott 17p was partially answered @ 1209 in the podcast in that SD stated the valuation was for 25% of the mine not 30%, so adding another 20% of the 17p puts us at 21p ish. Not far off Berenbergs 22p.

I accept that these figures encapsulate contiuing high risk hurdles, which appears to be the norm for junior explorers and developers, so in time, this valuation should realign for the better.
Thanks again Bamps.
z

Hi Zoros,

It is not confirmed that 17p is a projection until build in time, circa 2024/5 to quote you. There is no definition of "build in time" and as included in this thread and below, it is inferred that build start has already passed:

"...the company had / has c. A$16m from build start plus post-build-start equity for c. A$104m funding requirement."

The c. A$104m would be roughly US$73m which, as we know, is GGP's capex requirement in addition to the US$50m funded via NCM's loan.

This table then lays out the Project NPV and associated valuation of 17.0p. Note the asterisk; This is why I believe the 17p is applicable to present day. Based on the above, I believe we are post-build-start.

Did you get a meaningful response from Sprott?