Sprott initiates research on GGP - Shaun Day

[zoros]

JC - have you seen Bamps post @ 14th 1109?
His "inference" is the same as my 'guess' was.
So, it seems there is a mix of views as to when the 17p (+20%) is valid.
The 17p cannot be for now - the maths based on 2.9Moz Ore Reserve don't add up to that.
It HAS to be a projection - date unknown. (Until someone can definitively define the "Build In" date).
Best
Z
PS: Nothing from sprott

[_J_C_]

JC - have you seen Bamps post @ 14th 1109?
His "inference" is the same as my 'guess' was.
So, it seems there is a mix of views as to when the 17p (+20%) is valid.
The 17p cannot be for now - the maths based on 2.9Moz Ore Reserve don't add up to that.
It HAS to be a projection - date unknown. (Until someone can definitively define the "Build In" date).
Best
Z
PS: Nothing from sprott

Hi Zoros,

Yes, I have seen all posts in this thread and trying to base my theory on the Sprott note as per my previous post.

Will agree to disagree.

Have a good weekend.

[College Yard]

Zoros wrote: "It HAS to be a projection - date unknown." Yes - it can't be much more than a reasonable estimate made conscientiously using the information as it stands and looking at the situation as it seems to be at the moment.

I don't suppose the person that wrote the report spent anything like as much time trying to come up with a figure as posters have used trying to analyse it.

After a certain point it's like trying to nail down fog - there's the consolidation and dilution being discussed on the LSE board, inflation running at 10%, all kinds of what some US politician called 'known unknowns and unknown unknowns'.

We DO know that SD got a placing away at 14p so someone must think that's a fair price.

[Bottle Rocket - Liam]

JC - have you seen Bamps post @ 14th 1109?
His "inference" is the same as my 'guess' was.
So, it seems there is a mix of views as to when the 17p (+20%) is valid.
The 17p cannot be for now - the maths based on 2.9Moz Ore Reserve don't add up to that.
It HAS to be a projection - date unknown. (Until someone can definitively define the "Build In" date).
Best
Z
PS: Nothing from sprott

Well, that's put a dampener on things.

[College Yard]

Liam wrote: "Well, that's put a dampener on things."

Yes - it does - but it shouldn't really come as a surprise. The high market cap has been an issue since 2020. It's a good investment looked at from 10p.

[Bottle Rocket - Liam]

Not an easy thing to do when you are already well underwater.

But I digress and not a conversation for this thread.

[Costa]

D.Y.O.R

Trust yourself first and foremost and not the last broker you read. When have they ever done anything for PIs? They serve themsleves and their IIs or HNWs first and foremost.

I will say they are very good at giving rubber bullets to those that like an argument and those who like to Fud n twist!

[zoros]

Do not despair!

Question for those who have read and re-read the report. Towards the very end of the excellent and very comprehensive deep dive (page 8 of 16 of Recommendation), there is this:

"... we take the A$416/oz implied by our valuation of the SLOS, mark it down by 50% to A$208/oz,
and apply this to our 6Moz estimate of caveable ounces for A$1.3bn valuation. Adding net cash and from options,
we deduct Greatland central G&A and finance costs to derive our A$5.0bn / 17p..."

The value they have afforded the gold, appears to my untrained eye, to be the gold in the ground price and NOT the actual price the gold would fetch after processing (ie: after aisc and other costs). Can someone confirm this for me please?
If this IS correct and it is gold in the ground prices, then the 17p would be valued for their expectations of 9MozAu from the SLOS and 6.2Moz from cave mining. Total 15.2Moz.
[They go onto add that these 'expectations' can be raised by atleast 50% going fwd and this "may", I say "may" tie in with SD's slip of the tongue: 20Moz.....]?

Views on their metrics please?
Thanks
Z

[GoGreen1]

Hi Zoros
That was how it read for me, their current valuation of the gold in the ground assuming the SLOS and bulk resources discussed, which includes a risk factor as discussed in the report. Thus the 17p is the assessed current valuation with those assumptions built in. Thus the bulk mine gold is worth less than the SLOS gold at the moment due partly to higher risk factor etc.

I only saw this report as positive.

[College Yard]

The valuation of an un-mined resource is always 'in the ground' and it often comes as a surprise the size of the discount. There's no hard and fast rule - it's more custom and practise - but I recently had to find a realistic 'in the ground' value for a project and the industry norm for an 'in the ground' estimate is 5% to 15% of the 'finished' sale price. That wasn't a gold project - the industry norm varies from mineral to mineral so it will be different for gold.

[Costa]

There are many factors that input into a GIGV/Oz. Not least the jurisdiction, the tier of the discovery, infrastructure etc.

[zoros]

IF (as it seems) we are seeing the 17p valuation based on GIG (gold in the ground) then conversly we have to look at the value of the resource based on PoG/Aisc - OOG (out of the ground) after processing and ready for market. Sprott are forecasting 9Moz from the double decline SLOS and 6.2Moz from the block caving. Total: 15.2Moz (to date).
If we use PoG: $1800 and aisc: $650 with a recovery rate of 84% (I think this is what SD stated) for starters in 2024, then we are looking at a SP of approx 65p.
Views?
Z

[College Yard]

The price target should definitely be marked upward as it gets closer to production and sales.

[Gratitude]

Wasn't it 86%?

[lebugue-addick]

Wasn't it 86%?

The gold equivalent (AuEq) is based on assumed prices of US$1,450/oz Au and US$3.23/lb Cu for Ore Reserve and assumed prices of US$1,600/oz Au and US$3.50/lb Cu for Mineral Resource and metallurgical recoveries based on block metal grade,
reporting approximately at 88% for Au and 84% for Cu which in both cases equates to a formula of approximately AuEq = Au (g/t) + 1.5 * Cu (%).

Source: GGP May presentation slide 8.

Gratitude - I think you may be thinking of the conversion rate from Resources to Reserve which is a fantastic 86%, the best SD has seen.

https://greatlandgold.com/wp-content/up ... -22-vF.pdf See slide 9

[College Yard]

lebugue-addick wrote: "Gratitude - I think you may be thinking of the conversion rate from Resources to Reserve which is a fantastic 86%, the best SD has seen."

It's possible the 86% figure is a typo or it was mis-heard. I have been thinking the figure could actually be 96%. There is nothing astonishing about 85% so 1% more doesn't seem enough to support the comment. I'm invested in a company in WA that's tested 94.7% which is very good. It makes me think that 'the best SD has seen' could be 96% not 86%. It would make more sense of SD's comment.

[lebugue-addick]

lebugue-addick wrote: "Gratitude - I think you may be thinking of the conversion rate from Resources to Reserve which is a fantastic 86%, the best SD has seen."

It's possible the 86% figure is a typo or it was mis-heard. I have been thinking the figure could actually be 96%. There is nothing astonishing about 85% so 1% more doesn't seem enough to support the comment. I'm invested in a company in WA that's tested 94.7% which is very good. It makes me think that 'the best SD has seen' could be 96% not 86%. It would make more sense of SD's comment.

College Yard

Not a typo nor misheard. Extract from SD @LSE Webinar. In fact he's said it so many times and repeated in written form for the last 10 months. This is just the latest reference:

"but this slide you know I really enjoy it really shows you on the right of screen there how looked at the previous resource and what it looks like today and you can see with that extra 10 months of drilling just how much of that ore body has come into the mine plan, has effectively been shaded blue on this
- we think there's still a lot of ounces to add even on those existing levels but also at depth we continue to drive this out and some of you remember you know 10 months ago me saying with that original photo the ore body doesn't pinch in it doesn't cut in like that, that's just a function of drilling density and you can see that and I think we'll continue to see that as we expand through the ore body but the best thing on this page is the 86% conversion rate
- I haven't seen that before in my career that just is testament to once you identify gold it, quickly you can wrap mining shapes around it and it all comes into your mine plan which talks to the grade and quality of this asset".

Hope you're not thinking of Recovery Rate which is a different thing altogether.

[Bamps21]

Hi L-a
96% is the recovery rate that is known ore recovered.
Shaun explained about the conversion factor saying it was the conversion of overall ore body to mineable ore due to its vertical shape will be very high
He went on to talk about other Ore bodies having similar ounce / metre but they were stretched out over bigger distances and therefore have a lower conversion rate.
The bismuth is the unknown factor for the recovery rate, it all depends how they sort the ore and the new system in the processing train

[lebugue-addick]

Hi Bamps - yes indeed. I was replying to Gratitude's post earlier as I think he was getting Conversion rates and Recovery rates confused when he was looking at Zoros' post @11.27am.

In terms of recoveries this extract from 3 March MRE RNS is relevant:

"The gold equivalent (AuEq) is based on assumed prices of US$1,450/oz Au and US$3.23/lb Cu for Ore Reserve and assumed prices of US$1,600/oz Au and US$3.50/lb Cu for Mineral Resource and metallurgical recoveries based on block metal grade, reporting approximately at 88% for Au and 84% for Cu which in both cases equates to a formula of approximately AuEq = Au (g/t) + 1.5 * Cu (%). It is the company's opinion that all the elements included in the metal equivalents calculation have a reasonable potential to be recovered and sold".