Highlights from AIM ON AIR Interview with Don Durrett - 18 OCT 2023

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Highlights from AIM ON AIR Interview with Don Durrett - 18 OCT 2023

Interview Link:
https://youtu.be/-5Je0nmFDFo?si=GSyY1L90hu_Us5_E

GGP RNS’s:
https://greatlandgold.com/investors/regulatory-news/

Today’s guest Don Durrett joins Liam to talk about, Greatland, Havieron, and Gold. Owner of www.goldstockdata.com. Author of How to Invest in Gold & Silver: A Complete Guide with a Focus on Mining Stocks (which is available on Amazon). Expert on gold and silver mining stocks. A frequent guest on investment podcasts, with a large following on Twitter. Don Durrett is at the front of sharing information on gold and silver miners along with its macro data that has an impact on it. Follow Don here: https://twitter.com/DonDurrett

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- Don’s thesis is to value companies using estimates of future free cash flow (FCF) and costs, put a P/E (Price Earning ratio) multiple on the FCF compared to current market cap and then calculates company values using a $2500-3000 Gold price where he believes Gold price will go in the future

- Analyses where a company is currently and whether it will survive past the next 12 months as biggest concern is if it will survive, but beyond that has a 2-5 year outlook and with GGP as it is a company early in the cycle going longer than he usually does at a 5-7 year outlook, although usually prefers a company to hit his target within 3 years

- Decided to invest in GGP as the valuation had dropped significantly to make it appealing as has some concerns such as being an exploration company now changing its focus to development/producing and being a multi asset company.

- Also feels that the management is populated by accountants and lawyers vs operators in his opinion who are more likely to do deals than build a company

- Likes the profile of Havieron mine as easy to mine, low projected AISC of $650 from PFS which he expects to increase in DFS but not significantly and the additional 80,000m of drilling to add to the resource should increase production profile.

- He also really likes the potential margins at $3000 Gold projections even if factoring in much higher AISC values and expects a fast pay back of CAPEX and likes the 20 year Life Of Mine (LOM) potential

- Using a P/E ratio of 10 but does expect Australian miners could see 15-20 multiple but at 10 makes GGP an 8-bagger (800% increase in value) but he does see 10 baggers everywhere but trusts in the company vision at face value to grow although hasn’t yet spoken to the CEO Shaun

- Wants a CEO who wants to grow the company into a major as you make your big money in a 2nd or 3rd mine and GGP seems to have strong potential in it’s other projects and is holding long term for 5-8 years as see’s the promise here to build a $3-4bn multi asset company

(NOTE: Don’s quoted production rates in interview may need checking as GGP is forecast to have 30% of somewhere in the range of 350-450,000 ounces gold production from 3mpta from initial SLOS starter mine in the expected DFS so from 105,000-135,000 ounces)

- Also not keen on the 5bn shares in issue as can cause volatility but doesn’t want consolidation until they’re in production or finance the mine as tends to negatively affect the share price (SP) usually if conducted at other times

- In terms of financing sees no issues as it is a good project (NOTE: GGP already has financing agreed post PFS contingent on a DFS)

- Has GGP rated as medium risk and never likes to rate any company low, lowest he ever goes is medium low and not even Newmont and Eagle are rated low risk for example, is planning on adding medium-low to his website but this is used for existing producers with strong balance sheets, strong FCF so medium is a good rating where you should be able to trust the company unless something unexpected happens

- One issue for GGP holders he feels if heavily overweight in their portfolio is opportunity risk elsewhere as sees 10 baggers everywhere vs GGP being more long term so not in his top 50 list (he covers 865 stocks currently on web site and 950 in total) as feels there are those already producing that will do very well in 2024 based on his thesis for precious metal prices before GGP starts production when it too will give excellent returns

- Has no problem with holding GGP in his portfolio really long term though as can see potential for a 10 to 20 bagger, so has no issue buying low and waiting 5-7 years as long term investors are usually in the market for 10-20 years and after discussion with Liam confirmed his thoughts that GGP are very highly skilled at exploration

- In terms of Newmont divesting Telfer/Havieron he feels they are buying Newcrest for Australian exposure and as this mine fits the sweet spot of a long life, low cost, high margin future mine with 200-500,000 ounce production profile in a top jurisdiction, that it makes no sense for them to walk away, why would they part with one of the best projects globally when they just bought it?

- Wasn’t aware of Telfers very low profit margins until the interview but after discussion with Liam going over the numbers feels Newmont probably share his expectations for $2200-2300 Gold next year so will be happy to be patient and keep running or even maintain Telfer mill even if a gap in ore as Telfer’s production runs out until Havieron is in production, a perfect scenario as such for them

- Would have liked to see more cornerstone investors onboard than present as does feel with GGP now valued at £300m it is hard for institutions to pick up shares in volume so harder to shut down takeover attempts, so could perhaps see Newmont bidding for GGP but also sees opportunities for a strategic investor to pay for their CAPEX if required

- Also sees potential for his valuation target for GGP to be met within 5 years if growth is rapid and if Gold price really takes off, and with the strong FCF from Havieron can really see plenty of cash to explore and develop a 2nd mine quickly if they make another discovery.

Download link:
https://www.mediafire.com/file/kof4181w ... 3.pdf/file

Link to full notes:
https://www.ggpchat.co.uk/viewtopic.php?t=817