Let's get discussing GPD more actively on this thread! Here's what Metal Augmentor has to say :
Message 28576130
And this am, I posted the following on the tiger thread:
GPD will receive it's 4% of Pan oz commencing in 2014 and we'll scale up towards the 10,000 oz commencing 2016. In the Midway presentation the CEO says they are aiming GR to produce starting in 2016. I read somewhere the other day (and I don't recall where) that 2 of the 3 Midway deposits have potential to be company makers.
So they (MDW) have 3 properties of note: Pan, GR and Spring Valley (which Barrick has spent a lot of money on). Let's assume one is SV. The other must be GR because they have said that it will be bigger and higher grade than the Pan. GR is intriguing because it is actually open in all directions. They stopped exploratory expansion drilling at the Pan to go to GR. The Pan is still open down the middle and at least in one other direction.
I find the way that the market values GPD so irrational that it makes me laugh. You guys know what I mean, we can get greedy and scared poop-less but if you're still in the game, you just smile and move on to the next portfolio saving or portfolio - greedy thoughts! The way the market PENALIZES GPD for it's Yuckon play is patently ridiculous.
They have a strategy to become a serious Yukon producer. Name me any Yukon company w/ a cap of under $50m (we're talking a loan to market cap ratio of 63% - $35m / $55m cap which is what it was trading at when the loan was announced ) that has the ability to finance it's Yuckon property to production WITHOUT DILUTION. For that matter make that any gold mining or base metal company in the Yuckon, Nunavut, Ontario, BC, Mexico, Peru, Argentina, Chile, Mali, Ivory Coast and Nevada that could pull this off.
So they take advantage of the royalty and finance to production using the royalty package as collatoral. With the first 10m they tie up some loose ends on the BC acquisition and we'll get the PFS in q1/13. Bass Ackwards and unique to GPD, but let's say the numbers are 'ok'. They proceed and based on milestones will be able to draw down the $25m still undrawn. In 2014 it will start producing cash flow from a simple HL process. (Viceroy produced at BC and stopped in around 2002 when gold was $300 oz so it's been done before, this is why it is so cheap to get BC back into production).
Let's say the numbers are awful they don't proceed. The chances of that are under 5%. BC is a bust. They are in the hole for $10m and will have to sell a royalty. Well they sold one of them for just under $6m a few years ago, one that MA hadn't even valued when they did their report calling GPD their favorite royalty co. back in 2010. The package has got, what is it 25 or 30 different props in it; surely there's something that is sellable there. Or they get a large advance from Barrick on Bald Mtn or sell the royalty rights back to Barrick straight up. Or sell the Bald Mtn royalty to a cash rich royalty co. (MDW won't be able to afford it but would no doubt have a go at how they could do that!).
Or they sell Wolfpack or some other part of their portfolio assets ($5m) or the mill down in Nevada that they own for a couple of mill. Or they option out another Yuckon property. There are just so many ways to deal with the worse case, it makes me laugh and none of them involve the end of the company. But a disaster ensues, Yukon is dead and they sell the pf to someone for a $150m or $200m in 2015 or just change the name to XYX RoyaltyCo and carry on. Afterall, the companies in their PF do not have the option to buy out the royalties; they produce they pay.
But why think of a scenario that is so low odds I haven't heard any suggestion of it at all (except for this here post). So That's what makes me laugh, BC will produce and spin off cash. If they need some more $ so be it but it won't be raised at $.50 never mind $.28. |
