GGPChat

I've sorted out some of the features of your curve Loggy, hope you don't mind....

Ha, that's brilliant Strudel!

Why do we think we are there on the curve? Usually, the rise doesn’t start until the FS is released and the decision to mine has been made. My expectations were for the rise to begin slowly in October.

In saying that, I don’t necessarily disagree with your point on the curve, and here’s why:

1) Development doesn’t usually begin until the FS is complete, but most of us know it began over a year ago.
2) The undeniable positive momentum of the exploration expansion of Havieron
3) $60 million confirmed for the 5%, with most people believing Newcrest will take it up, the caveat being they still might not, as this looks like much more than they wanted to pay, even if it is still a steal. If they do take it up then this is a serious commitment towards this being a mine, almost as good as a decision to rubber stamp the project.
4) SD apparently offered Newcrest more than 60 million for the 5% back in March, and they dingied him

This is all in my honest opinion.

So, have we bucked the curve this time, bringing the next rise slightly forward? I was expecting it all to begin in Q4, but I’m not complaining

Hi Gerry, my positioning wasn't particularly scientific - the post was predominantly just relief that we're finally through the 5% distraction and we have a clear path ahead of us (with the exception of a few financial hurdles ), coupled with finally seeing a significantly positive share price reaction. Saying all that, I put us roughly 18 months back from the 'Golden Years' and I did actually consider your first point!

In my view Newcrest will go ahead and purchase the 5%, although they may possibly be smarting a little bit. I said in another thread that I felt the 60$ is GGPs figure and Newcrest went at least 20% lower than that, but probably much lower. Any business would try to get the cheapest price for an asset, but my personal theory is that they were using wording in the JV the same way as lawyers use particular wordings in clauses to find justification for their low figure. Despite the complications involved and the techinal competence required, perhaps in the end the adjudicator's eyes kept being drawn back to the agreement heading of "fair market value"!

Your last point - I've not heard about that . If you spot this post could you expand on it? To be honest I don't really understand why we'd offer them money for something that's already ours but I may be not understanding something.

Anyway lets hope the momentum keeps up next week. We spent much of Jan - May in and around the 13s so I see no reason why we can't at least consolidate back at that level for a bit.

Loggy

SD indicated that GGP had offered NCM substantially more in March in his presentation - see below:

Cheers RA, that one passed me by, that's really interesting.
It's a complete mindbender, I will look into this further.

Loggy - I'm not as convinced as Dip is that the $60 was GGP's value rather than NCM's. I'd love to know, but suspect we'll not find out. In any case, it is all academic now anyway.

However, you can imagine during the gameplay of negotiations SD telling NCM one of the following:

"You're offering us $60M......look I'd give you $90M for 5% of Havieron - how about it?"

or

"Due to the limitations of the JVA, we're submitting a valuation of $60M.....however, we believe that FMV is over double that and I'd be willing to give you $90M for 5% of Havieron that you've already earned"

Whoever submitted the $60M, SD either pushed NCM to offer a lot higher than their original bid....or would have included enough evidence in his submission to the adjudicator that the $60M bid submitted by GGP was significantly lower than a true FMV. Great gameplay by SD and the team.

I agree with Strudel that SD couldn’t have offered to buy something they already own, but he could have offered to buy 5% of the 70% NCM already own ie take the position to 65/35 and thereby demonstrate that their option price offer was ridiculous.

That point confused me as well. Perhaps Newcrest said they would give us 15 million, and SD, laughing internally at that, offered them 70 million to retain it, ultimately in effect just buying the rights to the 5% back off them. Admittedly it is a mind bender!!! No idea really how this could have played out

Sorry, I meant they would have sold it to Newcrest for 15, and GGP would have bought it back for 70, ultimately paying 55, which in this scenario is much more than Newcrest’s FMV of 15. All conjecture!!