GGPChat

I know you have had some very strong views on the value of the 5% in the past, with that now resolved, what is your view on the price of $60m and the huge consensus that it would not go cheap?

To put the 5% into context for me GGP sold 70% for 65m simple way to look at it I know . For me the 5 % value has cleared GGP of its current debt. We now needs to sort out a new form of funding for the next stage. Hopefully a revolving credit facility meaning they can draw money only when needed and not pay interest on excess money sat in there account . I believe the 5% is a low value but this was always on the cards the true value will become clear in the not to distant future.

To be fair to Hydrogen, he had walked his estimate of the 5% proceeds down from $1.2bn to $200m over a 5 month period:

3/9/21: “We just worked out that fair market value for the 5% (based on an estimated $35/per tonne tolling fee for Breccia plus Sulphide),,, And the result is close to $1.2bn for the 5%.”

9/9/21: “Will NCM take the 5% and what will it cost them… $300m $500m $800m ?”

29/9/21: “IMO the FMV 5% stake will be £300m plus.”

5/10/21: “Newcrest will have to play nice as the exploration upside on that 5% is monumental. I would value it at around $300m (on the bases of 12 moz x 0.05 = 600,000oz resource x $500/oz = $300m) That's a decent price. And a fair price.”

26/1/21: “Assuming MRE2 region of 6.5-8moz, I think my estimate of $200-220m tallies very well with your calculation.”

31/12/21: “I see around $200-250m in cold hard cash coming our way (Post MRE2) Schweet”

17/1/22: “Stop responding to his £50-£100 Million thread... THat's subtle message they are trying to out”

27/1/22: “I'm expecting a significant re-rate when the 5% is announced.”

"I believe the 5% is a low value but this was always on the cards"

Disagree, the majority did not believe it was on the cards, it's surprised me. For me that's right at the bottom end of the scale and has concerned me greatly.

Freddie2, joined at last... hoping for a bite?

Well it's an historic 'point in time' , and the fact is NCM just valued GGP at 1.7p per MOZ of gold equivalent

You do the maths.....

Squeaky BUM time

70m to buy back boys....

End of.

To be accurate - rather than fair HopefullyGold - I don't believe I have ever proposed $1.2bn for the 5%. That's just ludicrous.

I recall suggesting $200-250m and later modified down to $150m based on my valuation of ~$300/oz.

I admit. I did not really fully accept that the emerging ~6moz (and potentially up to 13moz) in the Eastern Breccia would be fully excluded.

Personally... I still think GGP went into negotiations with $120-150m in mind. (didn't he hint we'd be lucky to get around $100m at the 1st Town Hall last month?)

And then there's Sandeep with his $12m in mind. Siting behind his fat desk with hefty pile of supporting documents.

So if that was genuinely the starting point, whether $60m was Shaun's figure, or Sandeep's figure, will remain forever secret..

There could only be one winner in this binary situation. BUT we are certainly not allowed to know who the loser was...

It is possible the $60m was NCMs final offer and SD managed to get NCM to move their valuation up from 12 to 60...

Which makes it a stunning result... given the (no option) realty of a flawed, and frankly unfair option agreement.

Seems to have back fired on our shorts though... And certainly so If $12m was NCMs original target ( as Shaun appears to suggest ).

You have to hand it to him. Shaun has displayed astonishing integrity and played stunning game of poker and completely out manoeuvred a major.

Watch out Sandeep. Basically.

I think it is pretty apparent the $60m was ours Hydro having looked at the interviews that followed from Shaun and creating and studying the transcripts from (especially his intro in the LSE webinar) hence his warning us to be prepared for conservative numbers continually. I think your FMV calcs during the last 8 months have indeed been FMV but the option exercise was never about FMV so the phrase should never have been used in the wording.

As Hopefully says how the heck could any of us could have known about what we can now know are very low ranges for things like commodity prices making a FMV completely impossible ....... I put my thoughts together on the thread below to aid some anti FUD and pasted in the intro from the webinar by Shaun too at the bottom.

https://www.ggpchat.co.uk/viewtopic.php?t=365

I feel Shaun's intro told the story well in how the option exercise was stitched together to favour absurdly low valuation outcomes - I think Shaun and the team have pulled a blinder considering the challenge - those shorters were in some way aware of the potential challenge and fully expected NCM to win out with a very sub $50m value but between the >$50m outcome and the Pacific Trends deal.......they have their own challenge ahead lol

I also think that as this is GGP's valuation that won, NCM need to undertake additional DD as they came is so low to get the purchase signed off hence the slight delay vs an immediate purchase and well...... sure they can use the GGP info. to assist. How funny would it be if they were unable to proceed but we're never going to be that lucky I suppose )

Thanks Dip

Yes the thought has crossed my mind... ie what if they cannot proceed, or get it signed off in time.