Firstly I should point out that Mark Wheatley was presenting not Neal. My confusion on previous post, apologies. Mark is the Non-Executive Chairman that bought $40k worth of stock (at 33.5c) on the market in Dec before the blackout period for directors began. Top bloke and was happy to answer all questions. Haven't asked for his permission to post on here so will respect that and keep it somewhat general as I can.
The presentation was great, nothing too new that most of us current investors didn't know but good to hear it first hand from the company. He was the best presenter on the night by far and not to mention the GDO story was quite compelling.
He stated that the latest board meeting was very positive and that the board are very confident in the future of Gold One. The financial position of the company is great and set for growth. Hence Neal's lazy buy of $500,000 on market. Who doesn't throw that sort of money into a company?
I asked about that despite all the positive news (production upramp, high gold price, 6 big director buy ins in the last 3 mths, 10 brokers rating it a BUY, on track to make a third of the market cap, costs to go down, safety record) in the last 3 months why the share price hasn't moved much. He stated that this was likely due to the production down grades from last year. Now the market wants to see proof of production targets achieved. Understandably so, I guess that's good news for any new investors that want to step in as the first qtr is already ontrack to exceed target by around 3,000 oz. He did think the current SP was a little silly given what the company should achieve this year and taking market cap into account.
Said the board had great knowledge, experience and were specialized.
Workers morale: he mentioned this in his presentation without being prompted. The staff love to work for the company for a few reasons: safety is a priority for Gold One (accident rates are lower than Australian mines, mentioned in preso), the low depth (300m) nature of the mines makes it easy and safe for workers, they are incentivised (I'm assuming more output they can produce the more $, or if the company hits production targets they get a bonus)
Dividend payments you can pretty much rule out for this FY as the company is focusing on growth and setting a solid foundation. He did mention a few times that the directors are planning 2-5 years down the track, not after making a quick buck. However they did say they wanted to return profits to shareholders as soon as possible but think it's important to build a solid foundation first and get equity return aswell. Divi's possibly next FY.
Nationalization not seen as a real risk. The findings will come in Dec 2012 (from memory he said) but the fact is the government can't afford to buy the mines out and run them, it is a view pushed by a minority known as the Youth Group. However as we know South Africa is South Africa and hence why most companies mining in SA are at a slight discount. Not to the extent at which GDO is discounted though and if nationalisation was to occur we'd probably be up anyway as shareholders as our asset value is higher that what the market has GDO valued at.
The convertible notes where held by hedge funds and American banks. Couldn't understand the full response to that or the BEE side of things other than him saying the company is in a strong financial position. He did answer the questions openly but I couldn't understand it for the life of me (apologies). But did say that they had a put option to convert last year and didn't as they see the company to be valued alot higher than it is today. I suggest anyone interested in getting full details email Ilja, the Investor relations manager at Gold One: [email protected] He always seems happy to answer questions and is open.
There was mention of drilling Modder East from the North to increase production. Although as in the presentation you can see the panels and proposed timeframes seeing production get ramped up.
I asked about the flooding and why the company did not respond publicly for a while. He said the company did not like to respond to rumors. However did after it was made apparent shareholders were concerned and that the news paper article in which GDO was mentioned was completely false.
If GDO is sitting under 50c by the end of the year and have hit production targets, GDO becomes a likely takeover target.
He said Goliath should add around 10c value to the GDO share price or holders could be given shares in Goliath. (Not to be quoted word for word though as I had a few drinks by this stage, only fair to take advantage of free drinks after seeing most of my profits evaporate in the space of days due to Japan crisis) Listing for Goliath will take affect June/July this year. This has not been factored into the the GDO share price yet.
Ventersburg, he mentioned more drilling was happening and looked to be a similar mine to the current Modder's East mine. ie. resource, low depth, etc...
He said Modder East is a very easy resource to mine. Continuos ore body at low depth.
I asked about Tulo and Etendeka...can't remember what he fully said other than that they are future projects that look promising. (once again, few drinks in)
He mentioned a few times that the board is very excited, usually I wouldn't read into that much but with what the company has coming up in 2011 and beyond and the recent director buy-ins then yeah it's good to hear.
It's apparent that traders are having their way with the stock at the moment until full production reports come out and that if you take the long term view then just buy up on the dips.
As always do your own research and make sure your investment decisions suits your particular needs.
2011 production results, profits and growth should well and truly underpin the current shareprice.
Feel free to ask any questions. Although if they are technical or in depth you may be better off sending Ilja an email ([email protected])
DISCLOSURE: I currently own GDO shares and am buying more.
Hope this helps fellow investors.
Regards, A1
GDO Price at posting:
32.0¢ Sentiment: LT Buy Disclosure: Held
