Golden Prospect Precious... Share Discussion Threads

[12string] 15/11/2020 20:46

I can't see GPM share price falling below 46. There would have to be serious weakness in gold and thereby the GPM NAV. But say it does and the share price drops to 46 before 26/11 ... that'll surely mean GPSS are worthless and many GPSS shareholders will decide not to convert. That will reduce the dilution impact.

Dilution is a function of GPM's NAV and the % of GPSS shares that are converted. If either fall to zero, the NAV of GPM after 30/11 will be the same as it was on 29/11.

I'm of the view that the sell off of GPM shares (evidence by the large discount to GPSS NAV) is already overdone and that we'll see a bounce in GPM during December.

If GPM drops to 46 before 26/11, and GPM's NAV remains at current levels, we could see a huge bounce in early December.

This share price action seems all about fear of the unknown surrounding conversion day.

[12string] 15/11/2020 20:46

I can't see GPM share price falling below 46. There would have to be serious weakness in gold and thereby the GPM NAV. But say it does and the share price drops to 46 before 26/11 ... that'll surely mean GPSS are worthless and many GPSS shareholders will decide not to convert. That will reduce the dilution impact.

Dilution is a function of GPM's NAV and the % of GPSS shares that are converted. If either fall to zero, the NAV of GPM after 30/11 will be the same as it was on 29/11.

I'm of the view that the sell off of GPM shares (evidence by the large discount to GPSS NAV) is already overdone and that we'll see a bounce in GPM during December.

If GPM drops to 46 before 26/11, and GPM's NAV remains at current levels, we could see a huge bounce in early December.

This share price action seems all about fear of the unknown surrounding conversion day.

[toffeeman] 14/11/2020 10:41

Fair point 12 string - the crunch will come if GPM falls to below 46 and the subs still have (some) value!

Then what to do?

Logic says sell the subs and buy GPM on the market

[12string] 13/11/2020 17:41

Hi Toffeeman, the NAV quoted today is yesterday's, so I compare with yesterday's close to compute the discount - but yes, because prices have been tracking lower, comparing the share price with the previous day's NAV gives a greater discount as you say.

[toffeeman] 12/11/2020 16:38

You are underestimating the discount:

NAV assuming all GPSS convert = 61.74

share price of GPM = 51.5

discount = 10.24p = 16.7%

[12string] 12/11/2020 16:27

GPM shares as at the close yesterday are trading at a 15.8% discount to the GPSS NPV.
This Subs Shares conversion on 30/11 seems to be frightening holders of both GPM and GPSS shares. If the published NAV of GPSS shares is effectively going to be the NAV of GPM after conversion of 100% of GPSS, GPM looks over-sold. But I wouldn't be surprised to see GPM drop to around 46.14 early December. It might even be possible to pick up GPM shares at below 46.14. Sentiment is playing a bit part in the price action. Once trading in the newly converted GPM shares begins, I'm guessing there could be a good percentage that will be sold for a quick profit which could prolong GPM price weakness.

[atlantic57] 10/11/2020 09:20

Commentators have different views .
The next 2 to 3 years should be good for gold.
Short term no clear path until we get a clear marker.

[12string] 09/11/2020 18:48

The way most commentators see it, inflation is likely to start kicking in soon.
Fundamentally gold is in favour when real interest rates (yield minus inflation) are negative. The Fed is looking to hold rates low, so it's not going to take much inflation for govt bonds to be a losing investment. Enter gold.

The next 3 weeks are going to be very interesting.

[12string] 09/11/2020 18:30

Gold sold off today due to the dramatic 5% rise in US futures. No doubt the size of this rise (and the negative impact on gold) was in part because short sellers were forced to close losing positions. The positive Covid vaccine news is very welcome of course.

Support came in for gold at $1855 which has been tested a few times in the last 3 months. Just when we thought gold was breaking up from this 3 month sideways consolidation!

So the news today was about vaccine. Soon it will be about raising the US govt debt ceiling, increased taxes to pay for it and more stimulus. All that will bring gold into the spotlight again. Let's see what the rest of November brings.

Friday's NPV of GPM and GPSS were 76.13p and 66.14p - 2p off the Sept 2020 high. These will be lower tomorrow of course and it will be interesting to see how much the GPM portfolio has been affected by today's events

[atlantic57] 09/11/2020 15:01

logically gpm could well fall below 46p rendering the subs worthless.
Gold has tanked today.

gpm shares may well bounce after expiry date as if the Company does not get cash in the net asset value will not be diluted.

[12string] 06/11/2020 19:04

Methinks the US election caused some nervousness. If there's a Wall St sell off, then gold and silver would take a big hit and GPSS could well be worthless. The reaction to the election has been pretty positive. The prospect of another round of stimulus before Christmas and a Biden win seem to have livened the PM market.

Less than 4 weeks to go and it's reassuring to see GPM rise today with gold and on a rise in NPV - a sign that the upcoming GPSS dilution may already be priced in. A 20% discount to NPV is huge otherwise.

So , not wanting to trade GPSS any time soon, I'm looking at the GPM share price as an indicator of the exercised GPSS shares. That's around 12p to buy based on the GPM close today.

[toffeeman] 05/11/2020 15:20

If they still hold their subs - Assuming they want to maintain their exposure and not increase it, they would be mad not to! If however they want to increase their exposure they would convert some (or all) of their subs.

[greenrichard] 05/11/2020 15:09

Some nice gains in GPM top 10 holdings so far today - yet still no appetite for GPM.
I wonder if GPM shareholders who were issued free GPSS shares are selling their GPM so they can exercise their GPSS and buy them back at 46p?

[oooff] 04/11/2020 17:40

Finding HL problematic to sell, especially for small companies. Sold some non gpss shares today for cash, for money for my gpss subscription shares. Managed to make 2 trades online instantly. Had 5 limit order trades until tomorrow, as no longer able to trade instantly online. For all 5 trades the sell price limit was below the bid price and the price I got for the 2 online trades that went through. Bid price did not change all day. All 5 limit trades were cancelled by HL system without being dealt. WTF. Also no record of the limit trades on their system.

[atlantic57] 04/11/2020 14:35

Yes rich it was addressed to me specifically and it gets worse .The individual then stated that he had passed my instructions on to the Corporate team to ensure that the warrants were converted.

I now find that they have no record of the instruction.
So I will need to reinstruct.

Golden Prospect Precious Metals Ltd have informed us that they have extended the deadline to exercise your Subscription Shares. The final deadline is 26 November 2020, however I'm afraid they have not provided a reason for this extension.

[richjp] 04/11/2020 09:01

atlantic57, out of curiosity was that an email specifically addressed to you in response to a query of yours? It may be that one individual was not on the ball.

[atlantic57] 03/11/2020 18:46

Richjp as you say very clear.

The problem is I was previously told by Hargreaves that I must let them know by 30 October if I wished to take up the offer.


Thank you for your recent message.

I have detailed below the process for how you can exercise your right to convert your Golden Prospect Precious Metals Subscription Shares into Golden Prospect Precious Metals Ordinary Shares.

Should you wish to exercise your Subscription Shares at this opportunity, please send us a secure message or telephone us on 0117 900 9000 by no later than close of business on Friday 30 October 2020.

[richjp] 03/11/2020 18:36

I have just checked and I have not seen anything misleading from HL, although I have only been a shareholder since mid July.

I thought yesterday's email was excellent, in explaining what the options are and making it easy to take the appropriate action. I have cut and pasted it below as it might be of interest to those who hold through other brokers.


Golden Prospect Precious Metals Ltd - Final Exercise Opportunity

Your holding of 115,000 Subscription Shares in your Stocks & Shares ISA



What is happening?



Golden Prospect Precious Metals Ltd have announced the next opportunity to convert Golden Prospect Precious Metals Ltd Subscription Shares into Ordinary Shares. Each Subscription Share gives its holder the right to convert into one Ordinary Share of the Company. A holder wishing to convert a Subscription Share into an Ordinary Share will be required to pay the Conversion Price in order to do so. The Conversion Price at this opportunity is 46.14p per Subscription Share. This is your final opportunity to exercise your Subscription Shares.



What are my options?



Option 1 - Do nothing. If you do not return an instruction by the deadline of noon on Thursday 26 November 2020 your Subscription Shares will lapse and be removed from your portfolio. If a Lapsed Subscription Share Cash Payment is made it will be credited to your Account upon receipt.



Option 2 - You can exercise your Subscription Shares in full or in part. Each Subscription Share may be used to purchase one Ordinary Share at a price of 46.14p per Share. You may therefore purchase up to 115,000 Ordinary Shares at a cost of £ 53,061.00. For information purposes only, at the time of writing the Ordinary Shares are trading in the market with a buying price of 55p.



You can give an instruction to exercise your Subscription Shares by clicking on your Stocks & Shares ISA in the ‘My Accounts’ section of our website. Please select the Dark Blue Corporate Actions Icon alongside your Golden Prospect Precious Metals Ltd Subscription Shares and follow the instructions provided. Alternatively you can call us on 0117 900 9000 with your security details to hand. Please read the important information contained in the appendix of this message before giving an election.



Option 3 - You can sell your Subscription Shares. You can sell your Subscription Shares in the market, subject to standard Stockbroking commission rates. If you wish to sell your Subscription Shares you can trade online using the dealing button or over the phone on 0117 980 9800. At the time of writing the Subscription Shares are trading with a selling price of 5.50p.



When do I have to decide by?



Any instruction must be received in this office by noon on Thursday 26 November 2020. If no instruction is received your Subscription Shares will lapse (Option 1).



If you have any queries regarding this matter please contact our Investment Helpdesk on 0117 900 9000. Our Helpdesk staff can provide factual assistance but cannot provide advice about which option you should choose.



Yours sincerely



Samuel Goodhind

Corporate Actions







APPENDIX



QUESTIONS AND ANSWERS



What are Subscription Shares?



A Subscription Share is an investment which gives its holder the right to buy Ordinary Shares in a company at a set price and at a future date. Subscription Shares will have an exercise price. This is the price which you must pay in order to convert a Subscription Share into an Ordinary Share. Sometimes this may be a set price which remains fixed throughout the life of the Subscription Shares, and sometimes it may be a price which increases on specific dates in the future.



Converting Subscription Shares into Ordinary Shares is known as exercising them. Usually one Subscription Share can be exercised to give one Ordinary Share. Subscription Shares are similar to Warrants but have the added feature of being a qualifying ISA investment.



Can I elect for excess Shares?



No, you may only exercise each Subscription Share once and purchase one Share for each Subscription Share held.



Can I exercise my Subscription Shares in a different Hargreaves Lansdown Account?



You must exercise your Subscription Shares within the account that you hold them. The only exception to this is that Subscription Shares held within an ISA may be taken up outside of the ISA either within a Fund & Share Account or in your own name. If you wish to chose this option you must let us know in your instruction.



How do I purchase the Shares on offer?



To do this you must ensure sufficient funds are available in the appropriate Hargreaves Lansdown Capital Account to fund the exercise. You can do this using cash presently held within your portfolio or by arranging for additional funds to be made available.



If you give an instruction to exercise your Subscription Shares we will debit the cash from your Hargreaves Lansdown portfolio shortly after receipt of your instruction. Please ensure sufficient funds are made available when making an election. If sufficient funds are not available we will be unable to process your election and your application may be rejected in full or in part



When will the new Shares be issued?



If you make an election your new Shares will be credited to you on or around 14 December 2020



What will happen if I allow my Subscription Shares to lapse?



The Company will appoint a Trustee to exercise any outstanding Subscription Shares and sell the resulting Ordinary Shares in the market. Any proceeds, less the 46.14p per Share Subscription payment and any other costs incurred, will then be credited to your portfolio. The Trustee will only exercise the outstanding Subscription Shares if they believe that the proceeds from selling the Ordinary Shares will exceed the costs of subscription.



What are the current Share prices of the Ordinary Shares and Subscription Shares?



For your information, the current price of a Golden Prospect Precious Metals Ltd Ordinary Share is 55p to buy and 53.20p to sell and the current price of a Golden Prospect Precious Metals Ltd Subscription Share is 7.50p to buy and 5.50p to sell. It is advisable to check both the current Ordinary Share and Subscription Share prices before taking any action.



IMPORTANT INFORMATION WE ARE REQUIRED TO PROVIDE FOR YOU



The information contained in this message is based on our understanding of the information issued by the company and should not be seen as a recommendation to take any particular course of action. If you are in any doubt as to the suitability of the options or the action you should take you are recommended to contact an Independent Financial Adviser.


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[atlantic57] 03/11/2020 12:27

Yes Green Richard the service provided by Hargreaves was extremely misleading.

[greenrichard] 03/11/2020 11:46

This one of the reasons why I think there was high volume leading up to the end of October. Some holders may have been mistakenly led to believe that they had to exercise by 31st October

[atlantic57] 03/11/2020 09:43

Hargreaves Lansdown originally communicated me advising me that they must be notified
By 31 October if I wished to take up my entitlement .

Now I have received a communication stating that the deadline is 26 November.

[kenmitch] 30/10/2020 18:02

taylor20.

How quickly you would get your exercised shares depends on how efficient your broker is. I haven’t exercised for years as there have been none to exercise! BUT in the past the shares were in my online broker account within a couple of days.

As a non holder of GPSS or GPM I’m (being selfish!) hoping the share falls a good bit further, as good chance share could rally strongly once the subshares (assuming they get exercised)are absorbed. And if subs expire worthless then NAV will be higher and share price upside short term, potentially higher still. So any who somehow end up losing on GPSS might get some or all of that back with the shares. But key then as to whether or not to buy GPM is how their portfolio is performing at the time.

[toffeeman] 30/10/2020 11:03

If the GPM price <46.14p at the last date to commit to conversion then the price of the subs is irrelevant.

[steve73] 30/10/2020 10:47

My broker is asking me to commit funds to exercising around 5 days before they're due (possibly to allow the T+2 funds to clear from any sales to release cash).

Depending on the Gold/Silver Price between now and then, and assuming the underlying NAV reacts accordingly, then there could be further falls in the GPM/GPSS SP's. As such there could be a temptation to forgo any conversion if it's looking marginal, but then the more GPSS that don't get exercised, the higher the resultant GPM NAV will end up. GPM could then quickly rise to a more normal discount to NAV.

Lots of if's and but's but if you think the long-term PoG/PoS will increase, then converting the GPSS may be your best opportunity to secure a larger GPM holing than you could otherwise buy directly. NAI.