Goldplat Share Discussion Threads

[lowtrawler] 03/11/2021 07:35

To my mind, a disappointing update. Further evidence we probably paid too much buying out our partners in SA; Investing 450k into Caracal at full price instead of taking the cash; No news on the TSF; No update on dividends.

[camerongd53] 01/11/2021 16:46

I hope today's downward share price movement is not based on a leak of disappointing operating performance to Sept21 or possibly Martin Oooi's influence on a change of strategy

[michaelfenton] 01/11/2021 07:38

Hmm nothing yet Kimboy?

[kimboy2] 31/10/2021 18:58

In the past spending money on growth and diversification has meant Kili.

Hopefully we might find something out tomorrow.

[michaelfenton] 25/10/2021 10:13

The problem albeit a nice one for Martin Oii is the size of his holding? A buyback of any size seems unlikely and I personally favour the reintroduction of a dividend policy? That should still leave plenty for organic growth especially in Ghana.

[michaelfenton] 25/10/2021 10:10

Gold trying again to sustain 1800 mark?

[camerongd53] 25/10/2021 09:54

Quarterly update for september 21 can be expected anytime now
Preliminary results for June 20 year end were published at the end of November last year.

Look forward to seeing both.

Be interesting to see the effect of Martin Oooi on the direction he wants to take the company although it may be too soon to find out. The decision on dividend policy will be very interesting and imp-ortant.

It has been concluded in earlier posts that unless MO wants to buy the company (If he can afford to), share buy backs will not happen.
If MO wants to see a higher share price, unless there is corporate activity, the only tool available is dividends.

[lowtrawler] 21/10/2021 11:49

cameron, I don't think Martin will want to give up any of his shares and so buybacks would push him over the magic 29.9%

I don't believe he will want to be pushed into a bid by the timing of buybacks and so will either make a bid separate from your discussion or it will purely be a dividend. I can see the possibility of a 1p dividend and think this would be sustainable but the Board have indicated they want the dividend to reflect income received from Caracal. I suspect Martin will alter that view and, with it, I expect they could bring forward the dividend and base it on H1.

[camerongd53] 21/10/2021 11:14

The GDP board has indicated that they will probably commence a dividend policy commencing from 1 July 2021. If this is correct the first dividend will be declared at the interim results for the 6 months to 31 December 2021. The board may change this and declare a dividend with the final results to June 2021 which may be announced shortly.
Another means of distributing monies to shareholders is buying back shares.

An example of this is mining company South32 in which I have shares and they have a policy of both paying dividends and buying back shares and have had such a policy for several years.

Comparison between the 2 options
Dividends. GDP can be valued on a yield basis rather than a hope of future dividends or takeover or other valuation basis. If we take a yield valuation of 10%, a 1pence dividend supports a share price of 10p and an annual dividend of 2 pence supports a valuation of 20p etc.
Share buybacks is more complex. GDP will either go directly to the shareholders or into the market and purchase shares at either an agreed or market price. There may be a requirement to have capital or revenue reserves to support this. This generally requires pre-approval at a shareholder meeting (AGM or EGM). Market purchases are often pre-approved in tranches of a maximum of 15% of outstanding share capital and such buybacks in the marketplace are completely (to the extent proceeded with) at the discretion of the board for timing and price. The advantages are that:
• Weak shareholders are encouraged to sell
• Supports the share price to the level directors agree
• Reduces the available supply of shares in the future so that a higher price must be paid by future shareholders thereby increasing the share price.
• The dividend will increase in future as the total dividend will be divided over fewer shares
• If shares are bought back below net asset value, net assets per share can rise
A recent article I saw in the financial press compared the policy between UK and US. It noted that buybacks in the UK were at a time when the shares were a relatively high price, whereas the in the US they were not at such a high price. The UK practice appears to be against the interest of long-term holders. There is also the issue if buybacks make Martin OOOi’s shareholding go over 30% which has been discussed ain recent posts.
My general view prior to seeing the June 2021 accounts would be to support initially buybacks to a maximum price of 8p per share. This view may change when we say the accounts. A dividend could then be considered when the interim results are announced next year – a lot can happen before then!
Anybody got comments?

[lowtrawler] 14/10/2021 13:22

rossannan, usually waivers above 29.9% would only be considered when companies are in dire financial straits. That is clearly not the case with GDP. I have seen other instances where, through buy-back actions of the company, shareholders have been left holding more than 29.9% and there is a temporary period during which they can hold but not vote the excess shares.

I don't believe we will have any exceptional circumstances for Martin and so either they will move above 29.9% and make a formal bid or they will adopt a generous dividend policy. I suspect an offer price somewhere around 12p would win the day and still make Martin a hefty profit.

[shill10] 14/10/2021 12:21

going to buy some more here, looking to go through 8p as gold reaches $1800

[camerongd53] 13/10/2021 20:44

Very interesting.
We can speculate about the future.
1. If MO increases his holding to than 29.9%, MO is then required to bid or the outstanding shares. Does he have the cash resources to do this?
2. if the company were to buy back shares by either tender or in the market, it may increase the holding to over 30%. I am not fully aware of whether this would require a bid or not - The AIM regulations would detail
3. His holding is of such a size that anybody buying his holding would be very sure of buying out all other shareholders. I would expect MO would get a proper price for his shares which would benefit all shareholders. I wonder if Private equity would be interested in GDP? Profitable and good cashflow!!
4. Does MO own any shares in Caracal? If so what is the significance?

5. Final Accounts for June 21 due shortly will give an indication of what MO's options are. I anticipate minor share buybacks (up to 15%)to be authorised at the AGM. If acted on, it will give an indication of how solid other shareholders are and their keenness to sell.
6. I do not expect very major activity until operations are stabilised and until the Dec21 interims. This will let us see how Caracal is performing and how robust and profitable the GDP business is.
7. By then we will know how he TSF is going to perform. MO may wish to move on GDP sooner rather than later if the TSF is going to be very profitable.
8. By this time next year the answers to a lot of the above will have been answered.
9. Where does GKG fit into the picture. I was generally impressed with him and was a little surprised when he appeared to have been left the board - possible revenge looming?
10. If I sell up my shares, I will follow GDP solely out of curiosity

[michaelfenton] 13/10/2021 19:14

Yes dinky00 this has always been in the back of my mind. I was always concerned by what Martin Oii's motives are? If he tries to takeover I hope he offers more than 9-10p. I have been in GDP for a long time patiently waiting for the slumbering minnow to show it's metal.

[dinky00] 13/10/2021 18:42

If this doesn't signal a management buyout, I don't know what will. Martin Ooi will convince the board to use its cash to take the company private for a song. Can't blame him. Easiest way to profit from his position. Take the company private @ 9p-10p and have 28% of the annual profits forever more

[michaelfenton] 13/10/2021 15:28

Well thought out Lowtrawler.

[lowtrawler] 13/10/2021 14:48

Best news I've heard in a while kimboy. I expect a combination of dividends and buybacks are now a step closer. In my view, they can probably start with around a £2m buyback and aim for ongoing dividends / buybacks of at least £1m a year. The only issue with buybacks is Martin will need to be careful not to exceed 29.9% and so it might be dividends first.

[kimboy2] 13/10/2021 13:37

Martin Ooi is a poacher turned gamekeeper. Got to be a good move IMV. I presume Gerard will shortly resign as Martin won't need a spy in the cab if he is there.

Found the bit interesting;
As a director of Goldplat PLC, he intends to focus on capital allocation decisions and helping to maximise the per-share intrinsic value of the company.

I presume 'per share intrinsic value' is most likely to mean buy backs.

[aloafofbread1] 12/10/2021 18:26

I was in GDP for years waiting for it's potential to be recognised by the market. Out now but hopefully the tide is turning. GLA.

[lowtrawler] 12/10/2021 14:59

We should take projections on profitability from WW with a pinch of salt. We don't know what margin has been negotiated and we don't know for how long the tailings will be provided. We also don't know the expected grade throughput. As kimboy says, lots of questions and not many answers.

However, it is a new source of revenue and seems likely to contribute materially to next years profit. When taken together with our current under-valuation, it will hopefully spark interest from new investors and we may move closer to a fair valuation.

[shill10] 12/10/2021 12:44

wow, thanks dangers- for a £12 million company those figures are massive