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The sooner this is resolved the better. How long do we estimate before ggp will be in a position to make an offer
I think that is just indicating that the pumping out volumes increasing and the increase to the original pond modelling not necessarily the aquifer modelling. I doubt if that would be far wrong but additional water could enter from other underground reservoirs.
Hydrological surveys are quite specific and shouldn’t be far away from initial modelling.
I realise in fact that I was thinking back to the original RNS in November mentioning the pause in the decline "This water management has indicated potential for greater volumes of water to be managed at surface than originally modelled." Although further modelling will have been carried out surely the mere fact another pond is being considered backs up the greater volume than expected idea?
Hi Bamps, I'll try to dig out where I read about water volumes when I get back home. I had thought that it was lower than expected pressure, but greater volume but I could be wrong. Either way I know it is not a case of ever getting all the water out per se. Yes indeed I poured scorn previously on those that inferred that rainfall would affect the lower aquifer as I previously mentioned it is likely to be ancient water. By definition a contained aquifer is just what it is! My mention of rainfall was simply in relation to the evaporation ponds and therefore the slowing of the capacity at which they could be utilised. I know there was a planning application in for another pond and I too will be interested whether this is constructed. It may not be worth it but I had read that another means of increasing evaporation is by agitating water either by mechanical or sonic means to increase surface area but this would most likely be an unessary cost when the space is there to simply construct another pond if required
It seems a moot point. Whether Newmont can extract further capital expenditure from a buyer, or keep it longer in care and maintenance due to the aquifer, whilst being seen to comply with responsibilities under the JV.
Hi Chuffchuff
I’m not sure where you heard that the volumes are greater than modelled.
The high P90 estimate from 20/21 has not been exceeded at one point last year the water levels were said to be near the lower end closer to the P10.
Rainfall on the lower aquifer has no effect on the quantities, it is a contained aquifer probably ancient water.
The revision to the mining plan submitted last November has included provisions for another pond. Recent heavy rainfalls have been filling the ponds, this may have had some effect of having to turn the water flow from the aquifer off or down.
Whether they need the extra pond I don’t know but there are no storm ponds in the design at present. Looking at the Telfer images they have a few storm ponds.
Now they have permission we may see them working on this new pond shortly if they need it.
I do agree though it looks like NEM aren’t willing to commit too much funding to the project.
Hi Texlax
Reducing the AISC was one reason for me highlighting the possibility of another metal credit within the ore.
Shaun told me that if he had Telfer he would extract everything he could out of the ore.
Initial drilling upto HAD009 all included a au/cu/co equivalent figure. Newcrest however dropped this saying the mineral domain boundaries could not be quantified for cobalt.
If it’s achievable I’m sure Ggp will get it but it’s a big IF.
The Northern front has tungsten in amongst it, so that is another possibility.
Other credits lower down include nickel and molybdenum but that’s future stuff.
At the top though it’s either cobalt or tungsten.
Would have dramatic effect on lowering the AISC. 🤞
There are so many variables in play. On POG, one doesn’t know but I can see a distinct possibility of a requirement by a lender of x amount of gold being hedged, in the same way as on the original bank lending, and subject to FS criteria.
I think good news on dewatering the lower aquifer would be ahuge boost to sentiment ahead of any deal. SD after all called this a significant derisking event.
I know that volumes have been greater than modelled but the first half of March also saw 4 times the long term average rainfall at Telfer. The second half of March appears to have remained largely dry and the 14 day forecast looks good with decent wind speeds too (which is just as key to effective evaporation). I'm still a little on the fence to what extent this process lasting 6 months or so is really about? I would find it surprising if sufficient dewatering hadn't happened within a shorter time frame and I wonder if on completion of that a resumption of the decline will go almost hand in hand with a deal being signed? I'm certainly not hanging on for an RNS tomorrow, but I do think it possible that when one drops (or perhaps even two in short order) the upsurge in buys will be very marked. Still holding with patience.
Hi Tex, finance company said that if GGP owned 100% Havieron and Telfer with the POG at 3000 usd oz GGP share price would be 100 p a share. I presume no dilution in the present GGP share issue. That is in align with your 70p a share with the present POG and copper. Heading to the moon and beyond. DM
I don’t know about Lassonde curve, but imagine the height of a rise will take into account shares in issue/market cap. And on value, earnings per share will be important, particularly for those seeing the prospect of dividends at some point ( fairly distant ?)
And there’s repayment to consider on any form of debt in addition to that already agreed, whether by bank, CLNs, whatever.
The FS will amend/update figures currently used in calculations.
Hi Texlax
Yes the gold only AISC I believe was around $1080 which I have used if you add in the copper credits then it is $643.
This lower figure though is for 30% , the 100% will be higher.
My thoughts on the copper grades average is that it will exceed the 0.6% which is an average for the whole starter mine.
The initial average is going though an extremely high grade copper zone where it was common for grades of 8,10 & 12% I am personally hoping for 2-3% , I’ve been told that” 3% would be too high but it is indeed high grade.”
Bamps, I agree with the sentiment, and recall the PFS used a copper price of $3.50/lb, and today we’re at $4/lb. This should in effect reduce the AISC, as the copper profit is built into that number already. We can’t add the copper profit on top; if you were to do that, you would likely have to use an AISC excess $1,100. Make sense? There was a good chart somewhere in a GGP slide which broke down the AISC but I can’t find it, that would help to understand how much effect a higher copper price would have in pushing down the AISC. My hope is that a copper price $4 and above will fight against inflationary pressures, thus leaving us with an AISC in the $700s per oz.
Sharket, agree to use the market cap. Which is why with 100% of HAV, there is a conservative case to estimate a share price excess 70p (3.5b market cap) based on a realistic P/E ratio (lower even than Northern Star or Fortescue).
I see the share price is still being used and abused by the communist Chinese f..wits. I read an article about Hong Kong as a world financial Hub. Basically it is becoming a financial basket case as a consequence of the repressive and secretive security laws recently introduced. International investors are shunning it now. China is on a downward slope.
The market capitalisation will be determined by what decisions GGP make. Had the 30% JV been the business model for GGP it will lead to XYZ valuation in time, at production. However, should the company pivot and buy Telfer/70%Hav then it’s business model has changed significantly and a new business valuation will occur based on the new facts.
I don’t believe it matters how many shares are in issue it’s the demand that will force the price upwards, driven by how fast this company will move.
Redirons, the Lassonde curve is not plotted against share price, it's against value. MCAP is a better measure to look at. Far more share in issue than previous ATHs which, IMO, are a pipe dream for some time.
Hi Texlax
I have done some maths on Ggp owning the 100%, what it comes down to is the copper is the profit.
The higher the average grade of copper is the higher the profit
https://www.ggpchat.co.uk/viewtopic.php?t=904
With everyone concentrating on the gold price the copper price has been sneaking upwards.
It’s very significant.
Havieron copper production average has a grade of 0.6%.
Copper price $4.08/lb (US)
For 100%
Production 3mt pa @0.6% =18,000t or 39.6mlbs US
@ 4.08 = US$161.5m pa
Copper record high $4.88 =$193.25m pa
0.8% grade = $216.25m @$4.08
0.8% grade =$258.6m @$4.88
1% grade = $269m pa @ $4.08
1% grade = $322m pa @ 4.88
Gold
3mt pa x 3g/t divided x 31.1 x $2186 per oz $632m
Less AISC (Ggp’s) =$306m
So $326m left
$75-100m to process and transport
Less additional admin expenses and capex $100m (guess).
Profit on gold roughly US$100m + (depending on gold grades)
Remember gold pays for everything copper is the profit
Our current market cap is AUD 675m.
With 100% of HAV, first full year earning will be in the region of AUD 600m at today’s gold prices. Caveat this is gross, no debt repayments etc.
Fortescue and Northern Star have price to earning ratios of 14 and 21, respectively. Do the math.
With 100% of HAV, figures of 50p+ become quite realistic in relatively short time frame.
Sorry Bamps - you can tell that I hold your opinion in high regard and after a few glasses of red I just had a little wobbly when you said it was time to come back to earth with a bump. I have no problem in waiting for GGP to achieve all of its full potential, even if that benefits my son and grandchildren more than me and my good lady. That said, I was reading too much into your posts as to how the SP may perform as I am not expecting it to take 10 years to see ATH’s again. I know you never make predictions about SP performance so I shouldn’t have had a wobbly at all!! I enjoyed the red wine all the same and apologies for causing confusion!!
Hmmm where have I said it will take 10 years to get to 30-40p?
What I’m saying if you increase the tonnage the grades reduce and you need more tonnage to get to the same revenues as if the 3mt plan was adhered too.
I’ve no idea of where the share price will end up but it will be a lot higher than it is now
Hi Bamps - I think a large number of us are waiting to see previous ATH’s being exceeded as per the Lassonde Curve and personally I was always prepared to hold GGP share into perpetuity as a legacy bequeathed to my family, but I wasn’t of the opinion that it will take 10 years to get back to the 30/40p’s - are you saying it will? Thanks.
Hi Redirons when you say what we are expecting or what has been posted on Ggpchat?
Sorry Bamps - I’m having a muzzy day - are you saying GGP are 10 years away from providing the kind of returns we are all hoping for (vis a vis the Lassonde Curve)? Thanks.
People on here do like to mark up a good old yarn, though they see it for what it is.