Golden Prospect Precious... Share Discussion Threads

[toffeeman] 10/10/2020 12:49

>> KingBAller

Yes, in my ISA. Not worth bu$$ering about before the conversion date

[steve73] 10/10/2020 04:45

Providing GPM is above 46.14p on 30th Nov, then the GPSS should all convert, either directly by the holder, or the trustee. In this case there will be just under a 50% dilution in the number of shares. (Just a little less since some of the SS had already converted at one of the previous conversion dates - even though they were "out-of-the-money".)

A full conversion will raise some GBP 12.8 Million for GPM to invest.

On the basis that all the GPM convert, the appropriate NAV to use for GPM is the diluted figures, called GPSS NAV in the daily updates (although it is not actually the NAV of the GPSS).

To get the "NAV" of the GPSS, you need to deduct the cost of conversion from the reported diluted NAV figure.

Friday reported the Thursday NAV (diluted) at 62.69p. GPM closed yesterday at 58p (to buy) which represent a 7.5% discount to the NAV. With GPSS closing at 11p (to buy), it was an even greater discount of 9%.

On Friday most of our stocks on TSX closed significantly higher again, and I estimate that the NAV that will get reported on Monday will be around 64.5p.

If GPM opens on Monday where it closed on Friday this will represent a 10% discount.

If GPSS opens the same, it will be at a 12% discount.

Obviously the NAV is determined by the share price of the companies held, and these will be heavily influenced bu the Gold Price (and the expected futures price).

As others have said as the date for conversion approaches there may be a selling pressure on holders of GPSS who don't have the funds to convert, and with it pressure on GPM also, but with the discount increasing further and the expectation of a sizeable upward move in Gold and Silver prices following the US election (irrespective of who wins) I think the present time represents a ideal buying opportunity (for either GPM or the SS - providing you intend to convert).

I am expecting the MM's to widen the spread of the GPSS a little (already at a large 20%), to discourage selling, but as the conversion date gets closer I doubt they would want to end up short (if there is good money to be made by being long), and will probably need to try to balance their books.

[king_baller] 10/10/2020 00:33

Toffee man. I presume you have the amount of cash required to buy the subscription shares. I suggest you put that money for now into short dated US treasuries (e.g. IBTS). IMO the only realistic scenario GPM could drop significantly is a deflationary dollar spike. IBTS would do well in this scenario.

[greenrichard] 10/10/2020 00:20

The diluted NAV tells you the impact of all subscription shares being converted which is currently over 62p. Current discount to diluted NAV is about 11% based on current GPM price.GPSS should move 1p for every 1p increase in GPM from now. But there mane some selling pressure from those who can't afford or don't want to convert all their holding

[atlantic57] 09/10/2020 21:37

I will be converting as regardless of the short term outlook be it bullish or bearish,the medium term outlook appears positive.

[12strings] 09/10/2020 21:04

Gold up 1.8% today pushing 1930, silver up 5.4%. GPM are 21% silver. Discount to NPV is over 20% which is silly when PM's are trending up. Trump now wants a stimulus package greater than the democrats at $2.2tn were asking!! This could be the end of the 2 month period of consolidation after breaking $2000/oz gold.

I'm converting if the price is over $46.14!!!!!!!!!!!

[toffeeman] 09/10/2020 16:50

I think the dilution is about 8% but I maybe wrong.

I plan to convert at the end of Nov as long as the GPM price is over 56p

[12strings] 09/10/2020 16:40

I'm sure the effect of the approaching exercise date for subs shares is causing this weakness. I'm not totally sure of the dilution effect. Meanwhile the gold price is rising strongly and with Trump back on supporting a major fiscal stimulus package (yet to be agreed), we should see further gold price strength. to that's a positive.

The impact of up to 50% more shares coming on issue at 46.14 is as I see it:

1. The trust will have around an extra £25m cash from holders of GPSS exercising.
2. This enables the trust to buy more PM mining assets at market prices which will be higher than when they become part of the trust portfolio - due to the trust being valued at a discount to NAV.
3. The combined effect of the discounted share issue @ 46.14p, plus the discount to NAV that the market places on GPM shares will have a significant negative effect on the GPM share price going into December.

How to calculate that impact???

In early Sept, the trust discount to NAV had closed to 6%, that was when gold was spiking over $2000/oz. Now the discount is around 20%. It looks like sentiment towards gold will increase again, so we should have the wind at our backs.

Any other views on this would be welcome - I bought some GPSS today @ under 10p to add to my free issue.

[toffeeman] 02/10/2020 10:21

Crikey this moves on tiny volumes - I bought back in this morning and now aim to hold and convert at the end of Nov.

[noirua] 01/10/2020 17:37

This fact sheet gives the current position from the company. In simple form with few words.
Company Factsheet August 2020:

GPM At a Net Asset Value of: 69.06p the Diluted Asset Value is 63.43p

There are 28,473,716 Subscription Shares in Issue.
The exercise price will be increased annually to 46.14p on 30 November 2020
Subscription Shares and their associated rights will lapse on 30 November 2020 following their final exercise and may do so with no residual value. Additional payment will be required to exercise the Shares at the appropriate date.

[kenmitch] 29/9/2020 16:33

Noirua

That post from last year is just factual, and is correct.

There is nothing misleading in it.

It was explaining the sub shares for those with no previous knowledge or experience of them. I invested regularly in warrants and subscription shares when there were hundreds of them.

What do you think is misleading in it?

[greenrichard] 29/9/2020 15:51

Not entirely sure why all the GPSS sales at the moment. Still 2 months away from conversion. The diluted NAV is 61.4p and most holdings are up today - some 5%

The GPM price is now at it's usual discount to NAV. Any upswing in gold and silver should see this move back up rapidly if the buying volume picks up.

Seems to be out of favour again.

[noirua] 24/9/2020 14:35

andymunchkin, IF anyone was confused they are now completely confused or even misled.

[andymunchkin] 24/9/2020 12:58

kenmitch27 Aug '19 - 18:13 - 12 of 443
0 3 0
Stoneme.

To keep it simple:-

1. These subscription shares give investors the right to buy Golden Prodpect shares at 42.3p on November 30th this year people or 46.14p at end of November next year. IF that investor wants to. That is the case whether the share price is £1 or, say, just 20p.

2. Investors do not have to do that. They can buy and sell the subscription shares themselves at any time up to the end of November next year.

3. The arithmetic is simple. If share price is 46.14p or lower, then the sub shares will end up worthless. If the share goes to 60p then the sub share would be worth 14p compared with 6p now. And if share goes to 70p then the sub share will be worth 24p.

4. So IF the share does very well the sub shares have far more upside. But if share does not do well, then the sub share will end up worthless, but the sub share can be sold before it drops to zero.

5. Finally at Nov expiry date next year, investors holding the sub shares can let them lapse. A registrar is appointed to exercise sub shares still being held at expiry date, but relying on the registrar can be risky. Better to exercise if wanting to switch to the shares (assuming the share then is higher than 46.14) or sell the sub shares ahead of final expiry date.

I hold some, but they are a gamble. Is a big gold/precious metals rally likely? If confident that IS likely then the subs will be a great way of playing it.

[andymunchkin] 24/9/2020 12:58

kenmitch27 Aug '19 - 18:13 - 12 of 443
0 3 0
Stoneme.

To keep it simple:-

1. These subscription shares give investors the right to buy Golden Prodpect shares at 42.3p on November 30th this year people or 46.14p at end of November next year. IF that investor wants to. That is the case whether the share price is £1 or, say, just 20p.

2. Investors do not have to do that. They can buy and sell the subscription shares themselves at any time up to the end of November next year.

3. The arithmetic is simple. If share price is 46.14p or lower, then the sub shares will end up worthless. If the share goes to 60p then the sub share would be worth 14p compared with 6p now. And if share goes to 70p then the sub share will be worth 24p.

4. So IF the share does very well the sub shares have far more upside. But if share does not do well, then the sub share will end up worthless, but the sub share can be sold before it drops to zero.

5. Finally at Nov expiry date next year, investors holding the sub shares can let them lapse. A registrar is appointed to exercise sub shares still being held at expiry date, but relying on the registrar can be risky. Better to exercise if wanting to switch to the shares (assuming the share then is higher than 46.14) or sell the sub shares ahead of final expiry date.

I hold some, but they are a gamble. Is a big gold/precious metals rally likely? If confident that IS likely then the subs will be a great way of playing it.

[greenrichard] 24/9/2020 12:18

Managed to get just under 50,000 in 2 trades at 10p

[noirua] 24/9/2020 11:51

I suspect the big wigs call of $1,850 as a gold floor is right. Doubt 10p buy will be around for long.

[toffeeman] 24/9/2020 11:33

Sold mine yesterday looking where to buy back - looks like 7.5 to my untrained eye.

[noirua] 24/9/2020 10:51

The opportunity arrived at 10p. Should push on by the close today.

[noirua] 24/9/2020 09:04

Will be interesting to see if those who sold today panicked out or not. Added 43% more GPSS shares this morning at a bit under 11.3p. Still have powder to buy more if the offer is driven down to 10p.
Quite a few bears of gold at over $2,000 had a fall to the $1,850 - $1,865 level on their cards. It is there now:

[king_baller] 23/9/2020 11:22

Excellent value here. Gold miners are very good value at current prices. And this is just a healthy correction in the gold bull market. With the spread her you’ll come to regret selling down here! Top up opportunity.

[noirua] 22/9/2020 14:47

Evil Knieval at play on the 21st:

[noirua] 22/9/2020 13:17

1929 Stock Market Crash and the Great Depression - Documentary

[noirua] 22/9/2020 13:12

68 days to 30 November and 49 trading days including 30 November.

Yep! 49 days:

[phoebusav] 21/9/2020 16:16

Toffeeman, if you're correct it might be best to dump the lot as expiry is only two months away and GPSS might not recover by then. Sadly I sold all mine this morning for that very reason. GLA