My feedback from Town Hall - 07.12.2022
Posted: Fri Dec 09, 2022 9:16 am
Apologies for the delay in providing my feedback from last night’s Town Hall. I am not sure I can add much to what has already been fed back, but as said before it is never a bad thing to have more than less feedback.
There’s been quite a lot to digest over the last couple of days from both the AGM and the Town Hall. I must admit that the Town Hall has allayed most of the negatives that I felt from the AGM, and other recent events (delay in FS, potential non-provision of a resource update from NCM in Feb etc.). Some of which I felt raised a number of questions and concerns in my mind, certainly not to the extent that I doubted my investment for the medium term, but did leave me questioning the trajectory of the Share Price in the short term (next 6 months).
It was great as always to see so many familiar and new faces at the meeting last night, and I still struggle to get my head around how friendly, committed and knowledgeable everybody is.
In no particular order:
Share Price
SD is at a loss to explain why the SP is currently so low at present. He is perplexed that many of the “price moving news” has failed to have a positive impact on it. His thoughts were that it was simply a case of more sellers being in the market (mainly retail investors).
He is aware of 2 Institutional Investors that are currently buying and continues to engage with more.
Shorting/JPM
SD does not believe the shorts have had a significant impact on the SP. He does not think it is any concerted effort to suppress the SP, but more opportunistic traders taking advantage of the 5% negotiations (and our vulnerability around that), to simply make a trading profit. He dismissed concerns with regards to JPM and their relationship with NCM.
He did not agree that a large amount of the share dealings transacted this year were related to the shorts.
Vulnerability to buyout
SD recognises that the low share price leaves us open to low ball offers, he feels that we are extremely well protected both the might of Wyloo behind us and the strength of the new board. Although he did say that he was not “adverse to making money” and an “eye watering amount” would be required to buy us out. When pressed further during the after presentation buffet, he smiled and admitted that he would accept £1 (a figure thrown at him not one he came up with).
My impression was that he would not let Havieron go at all, and that if the opportunity arose he would be “popping the champagne corks” to have 100% of Hav. He did state that an Aussie advisor (equivalent to Barclays) had suggested that NCM would have no free cash flow for the next 5 years. Additionally, he added that Havieron is NCM’s smallest asset, so us obtaining 100% of Havieron should not be totally ruled out.
Resource Update/FS
SD seemed somewhat surprised when questioned about the potential of NCM not providing a resource update in Feb. He still believes they will put one out, and that the correspondence from Tom Dixon (NCM Investor Relations) was more a stock corporate answer. However, if NCM do not provide one GGP will, unless GGP feel there is a valid reason not to.
No cut off date has been agreed for the Feasability Study, however, he is hopeful this will include drilling up to the end of this calendar year. He is also hopeful that the FS will be out in the June Quarter (UK Q2), however, did not rule out this being later. The FS is still looking towards use of the single decline and up to 3M tonnes/annum.
Historically GGP have had little or no engagement in relation to the PFS discussions/report, it was all down to NCM as GGP did not have the staff to contribute significantly to this. GGP were very much the minority partner in the Joint Venture, basically Newcrest did everything and reported back to GGP.
With regards to the new FS, SD stated that he would await the report from NCM to review all of the details. However, when pressed, he agree that it would actually be a FS created by the Joint Venture team, and that GGP were now contributing a significant amount to this, especially now that Jimmy Wilson is involved.
To paraphrase “NCM staff stand up when Jimmy walks in the room” and during meetings “it is like they are trying to impress the teacher”.
Nickel: His preference is that it would be addressed now, my impression was that there was a significant amount of Nickel present. He would not state how much was there, however he did laugh when I naively asked if asked if it was in the tonnes or 10’s of tonnes, saying “you do realise how big the deposit is”. He also admitted his knowledge of the metallurgical implications of this were lacking and did not know if it was practical to produce at this stage.
I have confidence that the FS will be built to support the needs of both companies.
2 – 5 Year Plan
SD was asked where he saw us in the future. He said that he saw Havieron in production and moving towards a cash free status (provided we still own our share of the asset). 50% of cash generated would be used to service the debt, and the remainder used for growth. He did mention that dividend payments to share holders would be sooner rather than later, my impression that this would be within 4 years.
In the longer term (5 years) he suggested that we would look at securing different assets. Not solely for our own exploration and development, and that he would like to move the company in the direction of having a “royalty/streaming” income. This strategy is supported by both current II’s and he has another potential backer with proposals if this is the route taken. He suggested that the current backers and new board members would be key in moving towards that direction. He is thinking “Big”.
He is still actively trying to expand the portfolio in the Paterson. I joined the tail end of a conversation that Ga Ga was having with SD on this. Sam Garrett’s name came up and it was suggested that portfolio growth was possible with use of that contact, and although some of the tenements being discussed had already been drilled, they were still of interest. Although not being as prospective as others he is currently looking at.
Additionally, he added that the next 6 to 9 months would be transformational in the development of the company.
Commitment
SD confirmed that he has committed for at least another 4 years, and that this was a pre-requisite of the big players coming on board.
He is thinking big and so are the new board members and investors.
ASX Listing
My understanding from the AGM was that this was likely to be in the June Quarter (UK Q2).
This should allow for an influx of Aussie investors. He talked about the fact that 12% of every Australian employees salary is automatically taken at source and put into a “Super Fund”. Much of which is invested in Aussie stocks via both managed and tracker funds, this will lead to a continuous stream of investment income.
Exploration Activities
SD continued to stress that it will be carried out in a controlled manner; limited drilling, analyse and revisit. Not too much spend before we have a regular income stream and free cash flow.
As well known he is extremely excited about “Ernest Giles”. Talking about the disappointment that the Australian branch of Newmont had when Head Office said “not at this time”. Still awaiting heritage clearance, but still hopes to drill in 2023.
Nothing new of note on discussions re Scallywag.
End
Please note that these are my thoughts and take aways from both the AGM and Town Hall. My notes may include details from the AGM, Town Hall meeting and buffet, but are accurate to the best of my knowledge.
Please feel free to address any points you feel I have got wrong or omitted.
There’s been quite a lot to digest over the last couple of days from both the AGM and the Town Hall. I must admit that the Town Hall has allayed most of the negatives that I felt from the AGM, and other recent events (delay in FS, potential non-provision of a resource update from NCM in Feb etc.). Some of which I felt raised a number of questions and concerns in my mind, certainly not to the extent that I doubted my investment for the medium term, but did leave me questioning the trajectory of the Share Price in the short term (next 6 months).
It was great as always to see so many familiar and new faces at the meeting last night, and I still struggle to get my head around how friendly, committed and knowledgeable everybody is.
In no particular order:
Share Price
SD is at a loss to explain why the SP is currently so low at present. He is perplexed that many of the “price moving news” has failed to have a positive impact on it. His thoughts were that it was simply a case of more sellers being in the market (mainly retail investors).
He is aware of 2 Institutional Investors that are currently buying and continues to engage with more.
Shorting/JPM
SD does not believe the shorts have had a significant impact on the SP. He does not think it is any concerted effort to suppress the SP, but more opportunistic traders taking advantage of the 5% negotiations (and our vulnerability around that), to simply make a trading profit. He dismissed concerns with regards to JPM and their relationship with NCM.
He did not agree that a large amount of the share dealings transacted this year were related to the shorts.
Vulnerability to buyout
SD recognises that the low share price leaves us open to low ball offers, he feels that we are extremely well protected both the might of Wyloo behind us and the strength of the new board. Although he did say that he was not “adverse to making money” and an “eye watering amount” would be required to buy us out. When pressed further during the after presentation buffet, he smiled and admitted that he would accept £1 (a figure thrown at him not one he came up with).
My impression was that he would not let Havieron go at all, and that if the opportunity arose he would be “popping the champagne corks” to have 100% of Hav. He did state that an Aussie advisor (equivalent to Barclays) had suggested that NCM would have no free cash flow for the next 5 years. Additionally, he added that Havieron is NCM’s smallest asset, so us obtaining 100% of Havieron should not be totally ruled out.
Resource Update/FS
SD seemed somewhat surprised when questioned about the potential of NCM not providing a resource update in Feb. He still believes they will put one out, and that the correspondence from Tom Dixon (NCM Investor Relations) was more a stock corporate answer. However, if NCM do not provide one GGP will, unless GGP feel there is a valid reason not to.
No cut off date has been agreed for the Feasability Study, however, he is hopeful this will include drilling up to the end of this calendar year. He is also hopeful that the FS will be out in the June Quarter (UK Q2), however, did not rule out this being later. The FS is still looking towards use of the single decline and up to 3M tonnes/annum.
Historically GGP have had little or no engagement in relation to the PFS discussions/report, it was all down to NCM as GGP did not have the staff to contribute significantly to this. GGP were very much the minority partner in the Joint Venture, basically Newcrest did everything and reported back to GGP.
With regards to the new FS, SD stated that he would await the report from NCM to review all of the details. However, when pressed, he agree that it would actually be a FS created by the Joint Venture team, and that GGP were now contributing a significant amount to this, especially now that Jimmy Wilson is involved.
To paraphrase “NCM staff stand up when Jimmy walks in the room” and during meetings “it is like they are trying to impress the teacher”.
Nickel: His preference is that it would be addressed now, my impression was that there was a significant amount of Nickel present. He would not state how much was there, however he did laugh when I naively asked if asked if it was in the tonnes or 10’s of tonnes, saying “you do realise how big the deposit is”. He also admitted his knowledge of the metallurgical implications of this were lacking and did not know if it was practical to produce at this stage.
I have confidence that the FS will be built to support the needs of both companies.
2 – 5 Year Plan
SD was asked where he saw us in the future. He said that he saw Havieron in production and moving towards a cash free status (provided we still own our share of the asset). 50% of cash generated would be used to service the debt, and the remainder used for growth. He did mention that dividend payments to share holders would be sooner rather than later, my impression that this would be within 4 years.
In the longer term (5 years) he suggested that we would look at securing different assets. Not solely for our own exploration and development, and that he would like to move the company in the direction of having a “royalty/streaming” income. This strategy is supported by both current II’s and he has another potential backer with proposals if this is the route taken. He suggested that the current backers and new board members would be key in moving towards that direction. He is thinking “Big”.
He is still actively trying to expand the portfolio in the Paterson. I joined the tail end of a conversation that Ga Ga was having with SD on this. Sam Garrett’s name came up and it was suggested that portfolio growth was possible with use of that contact, and although some of the tenements being discussed had already been drilled, they were still of interest. Although not being as prospective as others he is currently looking at.
Additionally, he added that the next 6 to 9 months would be transformational in the development of the company.
Commitment
SD confirmed that he has committed for at least another 4 years, and that this was a pre-requisite of the big players coming on board.
He is thinking big and so are the new board members and investors.
ASX Listing
My understanding from the AGM was that this was likely to be in the June Quarter (UK Q2).
This should allow for an influx of Aussie investors. He talked about the fact that 12% of every Australian employees salary is automatically taken at source and put into a “Super Fund”. Much of which is invested in Aussie stocks via both managed and tracker funds, this will lead to a continuous stream of investment income.
Exploration Activities
SD continued to stress that it will be carried out in a controlled manner; limited drilling, analyse and revisit. Not too much spend before we have a regular income stream and free cash flow.
As well known he is extremely excited about “Ernest Giles”. Talking about the disappointment that the Australian branch of Newmont had when Head Office said “not at this time”. Still awaiting heritage clearance, but still hopes to drill in 2023.
Nothing new of note on discussions re Scallywag.
End
Please note that these are my thoughts and take aways from both the AGM and Town Hall. My notes may include details from the AGM, Town Hall meeting and buffet, but are accurate to the best of my knowledge.
Please feel free to address any points you feel I have got wrong or omitted.
