Hi bg, good question... my first thought is, they are a passive...

Hi bg, good question... my first thought is, they are a passive investor... hence they have not sought a board seat (which is their right), it also leads me to think that they are not looking to merge with DEG (as I had first thought, though I still don't discount this, as it could be a way of securing finance from a position of 'strength', as it would become a producer, having a bigger market cap etc etc).

So then the question is.. why buy DEG shares.... logically it's because they could not find a better vehicle to husband their cash pile, especially since, they sold down their 50% stake in Gruyere, they have been singularly unable to find anything of value with the drill bit, even after spending perhaps $50m+ in admin and $100m-150m in drilling on all their tenements since late 2018.

They made a bid on AOP a while back, but... quickly accepted RMS bid. They also tried to buy the 30% stake in Tropicana, but were outbid by RRL..
That is a pattern.

To be clear, I have no issue with Gruyere, it's a great asset, though their production since first gold pour has been... mixed at best and whilst some of the blame can go to COVID, management and other issues have arisen which has seen the 350k p.a target not yet be achieved.

When I look at the mine plan, another reason for GOR being so focused on acquiring an asset, is because Gruyere's peak cashflow generation period is... well, was and is now. Just like why RMS is so keen to acquire assets while it's Penny West U/G mine is in peak cash generation. It's a window of opportunity to use script + cash to higher grade the company's assets.


Even after they increased the production profile and updated the mine plan further, with increased throughput, this is when Gruyere is supposed to be humming.



Hi @wassa no, nothing personal about this, I have been (my posts on GOR are pretty similar over the years), other than my respect for the deal they pulled off with Goldfields, I don't have anything positive to say about GOR management.

Without doubt, Gruyere is a great mine, they discovered it, they sold 50% and since then, they have diddled with all the money they received (good move about the dividend though). I think my statement is pretty clear in regards to their ability to improve whatever they have invested in, i.e. DEG...
can you suggest what they have added since they purchased 19.99%?

In any case, as I mentioned, I am not averse to buying into GOR, it just would not be for anything to do with managements track record since brining Goldfields onboard 7 years ago.

I don't view GOR as overvalued, I just don't see the risk/reward fit my criteria for investing currently.
You and others have a different view, all good. Hope GOR gets a T/O tomorrow and I am proven wrong (will add it to my sticky note list on my laptop.... it gets longer every year!)

Good luck to all holders.