So how much might Shaun Day make for GGP shareholders, if he paid us 90c in a few weeks as an analyst suggested recently? Assuming the PoG holds its current level.
With 575m shares out plus 10% in options making 633m shares, 90c a share is about A$570m.
The Oct 2024 scoping study, (page 8) modelling a PoG of A$5,000, put the Post Tax NPV7 at A$1.81Bn, the IRR at 110% and the payback period at 9 months! That is after all costs, tax, interest, HQ admin, the lot.
Free cash flow over 11 years (undiscounted) is A$2.75Bn. For a stand-alone mill which doesn’t extract the copper, and a mining plan that recovers only 1.35Mozs of gold at a grade of 1.5g/t.
So they would be paying us about 31% of NPV7, and 21% of free cash flows. Which means Shaun, the plucky lad, is on a five bagger in absolute terms - but he would do much better.
He could ramp up production, and produce 200k ozs a year with Telfer for 6.5 years, boosting the NPV which is time sensitive.
Adding on the copper which Telfer extracts, factoring in our resources of 2.9Mozs AuEq, savings on plant and infrastructure, faster permitting, more discoveries leading to continued production…it’s all gravy.
But GGP retail shareholders want to buy their gold in the pound shop and will always be a day late and a dollar short. That may be why Shaun Day wants the Aussie institutions on board.
So 90c would kickstart a conversation I suppose, but if Parklands comes in….
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