another chat with the ceo

I’ve not felt the need to contact GGG lately as imo things seem to be going to plan with regards the merger and drill results (if not the SP). However yesterday I sent Jeff some general questions and he came back and replied that he could spare some time so I’ve managed to grab a quick chat with him instead of him answering by email.

As always this is my interpretation of what Jeff said and to the best of my memory. Also it needs to be born in mind he couldn’t answer direct questions like ‘In your opinion how much of the 1.9m inferred is going to be re-classed as indicated’. Although I did still ask :-)

As per usual it was a relaxed conversation and I felt Jeff was frank with his replies and I also felt he wasn’t holding back on any information, other than what might be considered price sensitive. That said I try to get a ‘feel’ for what he can and can’t say, and putting 2 and 2 together come out with some conclusions. The following are just my thoughts, impressions and words, not direct quotes.

First off the SP. He clearly regards it as being at a silly price for want of a better word, he pointed out that the drill results continue to improve the confidence in the Snowden model and that the drilling and merger activities are going according to plan (none of that is new as they say as much in the RNS’s).

Jeff holds several million shares in GGG so is likewise personally keen to see the SP where he thinks it should be given the fundamentals of the asset. (I always like it when an CEO is heavily invested) However with the SP being undervalued, I asked why he didn’t buy more shares then, and he pointed out there are strict restrictions on when directors could buy shares and he is of coursed privileged with ‘insider’ information. Comment: That doesn’t mean he does or does not want to buy more shares, but basically if he did want to, well at the moment he just can’t.

I asked about the phase 2 twin drilling and Jeff re-iterated it’s objectives are to prove up the majority of the current inferred ounces and as had been said before, the drilling is coming in pretty much as per the Snowden model. Comment: Now imo we have 1.9m of inferred and we already have 711k of indicated, it makes sense to be thinking that if 50% of the 1.9m is re-classed we should be looking at 1.65m oz of indicated with our next Jorc. Come the next Jorc I’ll be happy to have anything above 1.5m :)

I asked about the ‘Deeps’ and all the tecno babble in the RNS and what it meant. Jeff spent a minute or two to explain and most went over my head. That said I did pick up enough to understand that the surveys they are doing are looking good, but clearly the proof will be in the drilling. Comment: I think it is no secret GGG has high hopes for some decent grades and quantity at depth.

I asked about whether or not the cut off grade at 0.5g/t is likely to be reduced. He said other gold producers are working at a lower cut off point so it is possible, but will depend on the results of the metallurgical report. Comment: I think AZX announced that this report will be out fairly shortly.

Overall a very good chat and worth the effort. I guess GGG are being dragged down with concerns over our JV partners AZX to some extent, but also with concerns of the corporate activity, both of which I feel have been well over blown and I personally don’t see why we are down at these bargain SP levels. I see this as a buying opportunity, which I’ve done at 18.1p, 17.7p, 16.05p and today at 16.2p.

Take it for what it is worth, but I hope that it was of some interest.

Temujiin