||ORD SHS NPV
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Real-Time news about Gippsland (London Stock Exchange): 0 recent articles
Using figures from scoping study, ie
- Mine life ~ 7.6 years
- Mining dilution ~ 15%
- ROM grade ~ 0.93%
- Treatment rate ~ 600ktpa
- Recovery ~ 70%
- Concentrate grade ~ 50%
- Tin in concentrate ~ 3,906tpa
- Tin price US$29,000/t (less 10% for smelting)
- FOREX £/$ ~ 1.6
- OP cash costs ~ US$12,780/t tin
- CAPEX ~ US$108m
I have done a NPV based on (10%) discounted cash flows over LoM using the above figures for production estimates.
With tin price flat over LoM the NPV(10) is c. US$79.5m @ 30% IRR for the entire project.
Assuming GIP's attributable drops to 30% under the Stellar execution of their option, then GIP's share of the NPV is US$23.8m. This is equivalent to 2.95p (A$ 4.43c) after tax.
The pretax NPV of the project is c. US$155m.
Applying a 5% CAGR to the tin price over the LoM the GIP share rises to c. 7.47p using the total shares after current rights issue.
Both Stellar and GIP are small cap stocks so raising the US$108m CAPEX will need to be pre-dominantly via bank debt or with an alliance with a tin off-taker. Although there will almost certainly be an equity raising as well.
If this were to be a 70:30 debt/equity split then GIP's share would be US$9.7m.
To check my NPV estimates I have also tried a different approach by working a series of discounts on the current in-situ tin resource (I have ignored the silver, etc).
Gross in-situ value ~ US$1,408m
GIP's attrib @ 30% ~ US$422m
After mining dilution of 15% ~ US$359m
After process recovery of 70% ~ US$251m
Potential profit @ 20% of revenue ~ US$50m
This works out at c. 3.9p/share after rights issue.
Stellar are likely to increase the overall resource as they have yet to drill at lower levels. However, at c. 30% IRR the project already looks pretty good.
GIP have a 40% free carry up until a feasibility study and must also arrange financing for 50% of GIP's share of development costs once a FS stage is reached. So GIP has no current ongoing commitment and can focus it's meagre resources on Abu Dabab Ta and alluvial tin.
Clearly a risk given recent BoD shenanigans - but there would appear to be real underlying value (to me) even without the potentially much much larger Ta project.
Gandel is under-writing the rights issue so will almost certainly have a larger stake once the dust has settled. However, to move either of the projects forward he will need substantial backing from banks and the market so I consider the risk of the company being taken private is limited. With the amount of 'skin' he will have in this stock his interests will be aligned with shareholders whether he likes it or not.
Given all of the above I have decided to take up rights (be it on my own head!).
|shadowchaser: GIP-Yes ..
I also note ,recently ,that there was a similar revaluation/ update issued for NVTA.
Quickly followed by the collapse of the share price ,
and a funding crisis!
I certainly do not see how GIP benefits from any of this disinvestment.
re Heemskirk: GIP are not getting any cash for their 40% stake in that JV either. Just 4m shares in this newco Arobha (Australia). At A$0.2/share their share will be nominally priced at only A$800k but we have yet to see how many shares will appear on IPO and what the share price may actually settle at on the ASX.
At the bare minimum I would have expected an independent valuation of the Heemskirk stake and for shareholders to have been consulted rather than this asset (argueably the only one with a tangible cash value) to be transferred across to this newco as shares only.
The fact that it is 3 GIP directors controlling the newco and presumably under-writing the IPO just looks like asset stripping.
GIP shareholders will be offered shares in newco but, in effect, you would just be paying for assets that you already have a share in through GIP already.
I would like to see something positive in all this for GIP - but at the moment I cannot see how GIP benefits.
|marksnsparkle: JOA ...
Firstly GIP has raised $3.2 million in a recent placing, but did not offer all GIP share holders the opportunity to take part in the placing ... the good news is GIP now has $3.2 million in the bank, the bad news is we have been diluted a little bit more
Secondly GIP is going to move some of its assets to a new company and in return GIP will receive shares in that new company ... the new company will then have a placing to raise cash to develop those assets and all GIP shares holders will be given the opportunity to take part in that placing
Finally once listed the new company will have a value, i.e. market cap (total number of shares X share price), so say for example the new company had a market cap of $20 million and GIP owns 50% of the shares in the new company in theory this should add $10 Million (50% of $20 Million) of value to GIP ... so spinning off the assets into a new company is a way of placing a value on those assets and therefore a way of adding value to GIP
So in summary the recent placing was for GIP, there will be a placing for the new company that you can take part in if you want and the value placed on the new company will add some value to GIP|
|marksnsparkle: I'm sitting on the fence, best place to be with GIP :-)
There was a significant move in GIP share price last week, but the question is does somebody know something we don't ... lets hope so!|
|robjm66: Chipperfrd post 2409
No downplaying of news because you think Gip have applied for another licence which they did not tell us about after getting a licence they did not tell us they got at the time.
Obviously they have been totally open then no fog of confusion.
Chipperfrd post 2417
The only issue that will impact the share price is Abu Dabbab (groundhog day argument 20 see previous posts) guess you must think that the recent roller-coaster ride is connected to Abu Dabbab then?
"Just focus on the Tantalum & Tin market" post much more on tin and tantalum than half a dozen posters put together and much much more than the gold prospects. (groundhog day argument 22 see previous posts.)
Chiperfrd post 2419
Something is worth what it can be sold for or its potential if Gip do a free carry joint venture it will be worth something a point i have already made on hotcopper. This will not take years as Gip are already talking as mentioned in prospectus.
Chipperfrd post 2422
Chipperfrd post 2423
See previous point also all the other companies in the Nubian shield area guess they have beat your hundred to one odd's theory surprised you invested in Centamin (like me) at those odds.
Chipperfrd post 2425
Either information about Gip prospects was sat on or it was not, i have posted plenty of information that suggests it was we cannot both be right.
The best you can come up with is if the information had been out there you do not think Gip would have attracted any more investment because everyone would have thought all Gip's other prospects were worthless.
Very thin argument with no Gip information to back it up not much more than a opinion really which you are free to hold but it is not compulsory that i agree with.
Marksnsparkle post 2426
Do not think Gip will sell the licences but do a Joint venture with Chalice gold. Having Lycopodium and Steven Chadwick working for both companies should help any agreement Lol.
Gandel is going to want to make the case that there is "gold in them hills" or more accurately minerals in the nubian shield area, and want Gip to be involved. This should help Gip do deals further along the line over Wadi Allaqi area's so he will not want to be totally cut out of the Eritrean tenements.
Chalice gold think the mineral prospects are good to the north and they know Gip's area.
With the gold price hitting a high do not think everyone is going to want to shun gold investments but that is a opinion everyone can feel free to disagree with...
|chipperfrd: The ONLY issue that will really impact the GIP share price is Abu Dabbab.
There you are Robjm, I have blown all the fog away for you!
All the other stuff is effectively 'noise'. That is my opinion as an investor here. When they generate some actual value elsewhere then I will be the first to recognise it.
Just focus on the Tantalum & Tin market and the potential supply deficit for Ta and the (hopefully) positive impact on the Abu Dabbab funding - THAT is the real topic that should be foremost in our minds.|
|marksnsparkle: robjm66 ... the point Chip is making is that the assets in question are so underdeveloped at present that they will add no significant value to the GIP share price in the near future|
|marksnsparkle: robjm66 ... I don't know what boosted there share price because I don't follow Lycopodium and other than glancing at Lycopodium "chart" it does not sound like you do either
But just to illustrate my point if somebody at Lycopodium leaked news to me that GIP was on the verge of getting there debt financing and building the mine I would invest in GIP not Lycopodium ... common sense really
Lycopodium is not a pure play on GIP, I'm sure Lycopodium do business with lots of companies, so the announcement of such news will have more of an effect on GIPs share price than it will on Lycopodium share price
Also why is nobody piling into GIP if this leaked news is out there or is Lycopodium now the best way to invest in GIP
How the hell can you attempt to defend such a moronic and misleading statement ... your doing very amateur technical analysis on Lycopodium chart to find out what is going on at GIP?|
|robjm66: Post from Confidential posting as Transmeta HC thread
for various reasons, not related to HC GIP board, I did not post here for some time.
Concerning my recent visit at London, there came up, in my mind, one important message, in some way extending the published message of GIP at the 20th of November, saying a potential investor may be part of the 20% financing of GIP (the other 80% becoming debt by the banks).
The corporate law of GIP forsees that GIP holds 100% of Tantalum International which in turns hold 50% of Tantalum Egypt, which will run the mine, together with the 50% participation of the Ägypt`s.
The investor, according to the concrete wording of JT, is supposed to join Tantalum International, not GIP itself ( eventually paying a sum worth of 15% of the 20% of the own capital for the mine financing). In other words, he will not become a shareholder of GIP. This is one advantage.
The other, even important aspect, is the fact that his participation will be negotiated between any investor and GIP, being related to the asset value of GIP as a whole and not related to the actual crasy low share price. That´s the main point. JT stated quite clearly that GIP will not sell any of his assets below reasonable value.
The long term and also the recent very good strategy of JT, plus the "accident" of Talison has brought GIP into an excellent position:
1) Newly, the german government guarantees it´s mining, both politically and commercially. As a consequence, low interest rates for the debt will be on the table.
2) Since the industry needs tantalum, may be less due to the crises, and since Talison has gone, at least for a while, when it comes to price negotiations, today GIP is in the best position ever, both regarding any investor as well as the german banks (!!).
3) GIP is on it´s way to become a most substantial (volume of tantalum) and reliable (source of tantalum versus the DRC, Kongo) industrial partner.
As all this development occurs, the share price of GIP is extremely low. Forgive me, but during these recent times I collected quite a number of GIP shares, as I already told JT in London. On my way, to become a reasonable shareholder of GIP.
Just as an aside, at the german GIP-board there is also a strong opponence regarding any GIP-investment. Of course, since competitors, like CCE, in Gernmany are strongly supported by marketing efforts. Sorry enough to say, marketing for GIP instead is nearly missing in Germany.
In any case, to me there seems to be no other explorer around, like GIP, which has such a sound basis to reach the stage fom an explorer to a miner. Even under this extraordinary financial crises!!
Congratulation to JT - he and his team made a great job!!
Gippsland share price data is direct from the London Stock Exchange