On 7th July 2020, “Rational Awareness” arrived on our message board over at LSE.co.uk.
unlike numerous other first time posters, who frankly appear to be there to only cause trouble, we were presented with a well written, balanced and thought out post.
The conversation went on throughout the afternoon, with many contributors adding to the debate.
It is one of the best discussions I have read in a long time.
One of the posters suggested that this be made available to you here.
The full conversation at the time of writing this page can be found here.
NB. I am a massive fan of an online spell checker, it highlighted a couple of minor spelling and grammar bits, (abbreviations and the such), I have corrected to make this easier to read.
Thanks all for the responses. mushroomkId and thelearner, I have tried to incorporate your comments regarding the takeover, COVID and Gold price. Here is the cut-down post (of the original post) with the updated assessment.
We’re all probably aware of the opportunities which this share brings:
Further good news on 23rd regarding Havieron.
Rerate of target share price by brokers.
Good MRE in second half of this year.
Results of Havieron Concept Study second half of this year.
Results of Feasibility Study early 2021 (hopefully)
Results of drilling which has commenced or will commence imminently on GGPs other tenements
GGP Takeover (hostile or arranged) by Newcrest.
Purchase of Havieron rights by Newcrest leaving the remainder of GGP intact to go search on other tenements.
However, during this time as the share price appears to stagnate, I am starting to wonder what I might have missed with regard to the risks associated with this share? What are the potential downsides? This is not a deramp, just trying to assess what and how big are the risks to my investment.
1. Next mining results are disappointing and show no further extensions – that cannot be a risk but surely just a missed opportunity – the SP is already where it is based upon what has already been found – it cannot be unfound.
2. Cash call by GGP management – unlikely as GH has indicated that we are well funded for the next 12 months (by which time we should have received monies from Newcrest for the 5% (if they choose to take it))
3. Hostile takeover at a low price – not sure how that could happen.
4. GGP agrees to sell Havieron to Newcrest at lowball – again, not sure that GH could get away with this as significant questions would be asked. Considered that GGP could easily sell remaining (30%) of Havieron to Newcrest at Fair Market Value once Resource Estimate has matured significantly. Allows GGP to move on to (find)ing other sites which are their sweet spot.
5. MRE results show very low amounts of Gold and Copper – surely we have enough info already, Investment Journey’s youtube pres provide an initial estimate of 15p for our 30% of Havieron. Even this estimate has been updated recently to between 17p and 35p
6. Newcrest decides not to mine Havieron – surely this could not happen, Sandeep has already said that he would start decline immediately if he could.
7. The whole process takes too long and the GGP coffers run dry – GH has already said that he would not look to dilute if this were the case
8. The resurgence of COVID – will not make Havieron go away but could slow progress
9. Price of Gold drops significantly – no sign at present, the greater the risk to stock markets will only drip POG higher – considered as low risk
In my mind, the biggest risks to my investment are covered off by numbers 1 and 7 above. I am comfortable that neither is likely to happen, however, the mitigation for both is already known and again, I am comfortable with the mitiga(tion)