Greatland Gold - GGP - Share Chat

[Sleepy]

No interest in GGP, but great thread on dilution

[YKKlein]

[Wulfy]

How have they calculated that?

[Sleepy]

Double, double toil and trouble;
Fire burn and cauldron bubble.

[aPaulingchoice (Paul)]

🇬🇧

[phildawson]

Basically Total Equity Value divided by the Shares Outstanding gives 0.45p a share and based on 0.088p a share thats 80% undervalued.

Heres the hidden bit how they came to these cash flows and terminal values:

Present value of next 5 years cash flows (£388) and Present Value of Terminal Value (£1,272)

Data Point	Source	Value
Valuation Model		2 Stage Free Cash Flow to Equity
Levered Free Cash Flow	Average of 2 Analyst Estimates (S&P Global)	See below
Discount Rate (Cost of Equity)	See below	7.5%
Perpetual Growth Rate	10-Year GB Government Bond Rate	1.2%

Data Point	Calculation/ Source	Result
Risk-Free Rate	10-Year GB Govt Bond Rate	1.2%
Equity Risk Premium	S&P Global	6.9%
Metals and Mining Unlevered Beta	Simply Wall St/ S&P Global	0.87
Re-levered Beta	= 0.33 + [(0.66 * Unlevered beta) * (1 + (1 - tax rate) (Debt/Market Equity))] = 0.33 + [(0.66 * 0.869) * (1 + (1 - 19.0%) (0%))]	0.912
Levered Beta	Levered Beta limited to 0.8 to 2.0 (practical range for a stable firm)	0.912
Discount Rate/ Cost of Equity	= Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium) = 1.22% + (0.912 * 6.92%)	7.53%

Discounted Cash Flow Calculation for AIM:GGP using 2 Stage Free Cash Flow to Equity

	Levered FCF (GBP, Millions)	Source	Present Value Discounted (@ 7.53%)
2020	-3.35	Analyst x2	-3.12
2021	-3.4	Analyst x2	-2.94
2022	-3.1	Analyst x2	-2.49
2023	26.6	Analyst x1	19.9
2024	54.4	Analyst x1	37.84
2025	78.6	Est @ 44.48%	50.84
2026	103.35	Est @ 31.5%	62.17
2027	126.52	Est @ 22.42%	70.78
2028	146.84	Est @ 16.06%	76.39
2029	163.88	Est @ 11.61%	79.28
Present value of next 5 years cash flows	£388

	Calculation	Result
Terminal Value	FCF2029 × (1 + g) ÷ (Discount Rate – g) = £163.878 x (1 + 1.22%) ÷ (7.53% - 1.22% )	£2,628.35
Present Value of Terminal Value	= Terminal Value ÷ (1 + r)10 £2,628 ÷ (1 + 7.53%)10	£1,271.58

---

	Calculation	Result
Total Equity Value	= Present value of next 10 years cash flows + Terminal Value = £388 + £1,272	£1,659.58
Equity Value per Share (GBP)	= Total value / Shares Outstanding = £1,660 / 3,688	£0.45

-1 x (£0.088 - £0.45) / £0.45 = 80.3%

Obviously take with a pinch of

But at this point if you’re looking at x3, x4 or even x5 from the ~9p today. Not bad.

I still see a takeover happening before they get too big.

[Wulfy]

Me too. A few fundamentals I’ve been looking at point to anywhere between 12p and 16p as a buy out price before it gets too big imo.

[phildawson]

Oh I would say much higher for buy out, I think they mentioned a potential 2022 production so it has potential for raking in absolutely billions over the next decades.

I’d say they would want a lot more than 12-16p to make it worth it to them for someone else to take the reins and glory even at this point.

[Wulfy]

I agree, they’d want alot more but I just think someone will try and buy them before they can justify more value. I definitely agree about the potential though.

[Mat (Matthew)]

Lol. Like these shares need anymore pumping!

Greatland “could” end up being worth 45p per share, but it isn’t worth that much today and unless a number of positive things happen then it might not ever end up being worth that much. This possible future valuation is based on a load of assumptions and so let’s just keep our feet on the ground and take this one step at a time.

As a Greatland shareholder I am obviously positive about its future, but I just recommend that everyone calm down a bit and try to be a bit mindful about how they might feel if the wider general markets were to roll over and potentially take the Greatland share price down with it. I think that Greatland will end up being a reasonable medium to long term investment, but I could easily see the share price back down at 5-7p before it then heads up into the 15p+ region.

Please don’t take this as negative, but please do keep an eye on what is happening within the wider markets and where they “could” be heading once all of the current support from the various Central Banks and Governments starts to tail off. I bought my Greatland shares for around 3p and so I’m comfortable riding a bit of volatility, but if someone were to buy them today based on seeing these kinds of speculative valuation comments, and thinking that they could only head upwards, it could be quite unsettling for them if the shares were to fall back a bit in the short to medium term.

Let’s get see what Newcrest report about the Haverion drilling within their future trading updates, etc. and try to keep this based on factual updates rather than speculation. It might be less fun, but it’s also potentially less harmful to any newer investors whom aren’t used to these kinds of “sell side” games yet.

Cheers
Matt

[Ultron (James)]

Totally agree that people shouldn’t pin all their hopes and dreams on this stock going thermonuclear in making them money (at least not in the present to short term future) I myself own a fair bit of this stock and have been watching in interest over the last 3-5 months its rising and falling.

However… To give another perspective, gold is a very valued resource, particularly in its use within electronics (from consumer right up to high tech). To think that golds value wont increase over the next decade or so would be rather foolish, as we live in a technological era and more and more every year we create and consume more electronics based items.

I would say gold is a very wise stock to invest in, as most typically when you mention gold usually jump to thinking of its value in terms of jewelry and not the vast multitude of other uses it has.

It’s one to certainly be cautious about and agree you shouldnt put all your eggs in one basket, but I wouldn’t rule it out completely as something that won’t be in seriously major demand in the future.

[Mat (Matthew)]

As someone currently positioned heavily within the Gold & Silver mining sectors then I agree that the precious metals have a very positive looking future for a number of different reasons. My portfolio performance thankfully also seems to be backing up this view at the moment.

I’m not negative gold, silver or Greatland Gold, I’m just suggesting a bit of caution and filtering when it comes to some of the more speculative updates that are currently doing the rounds on social media, etc.

My advice, read the real company updates, real analyst notes, the real company web sites, develop your own view, but where possible validate your view by doing the research and really getting an understanding of what’s actually going on. If a random web site is sending out a really positive or negative article about a company, ask yourself why they are doing it, why are they doing it now, and what might be in it for them?

In this instance, Greatland Gold has been in the headlines a bit lately, it has a large retail investor base, and I could possibly see that the company whom wrote this might have sent this out to grab the attention of retail investors in an attempt to raise brand awareness. Dull headlines don’t attract eyeballs and get shared around, but make the message targeted and a bit sensational, and suddenly it’s being shared all over twitter, Facebook, here, and we are all talking about it. Do it every day, and we forget the individual messages but start to remember the brand names of the companies that publish the headlines.

Personally, if I want to get a view of the real analyst valuation estimates for a company, or any other useful information, I get it from the Financial Times (Refinitiv data) as I know that our interests are aligned. I want accurate information and they want me to continue to subscribe for their services. No hidden agenda’s and just a nice straight forward arrangement.

Matt

[YKKlein]

[DNM (Doug)]

My only upset is that freetrade haven’t updated to close price. Have to wait till Monday

[AUK]

That’s one hell of a late buy…!

Monday could be huge.

CostaMooney

[phildawson]

I’ve no idea how Freetrade people cope with this at only two places.

12,000,000 shares @ 10p

£1.2m just slapped down? If only I had millions to play with

Must be nice to make a couple million on this for a year or so keeping in GGP.

[Kerry (AntiMasker KBF Activist 💪)]

I’ve not posted on here for some time but after further positive performance today, I felt I had to. Too many people dismiss mining stocks for whatever reason, however this stock is in a league of its own. You only have to look at the fundamentals and they have not changed. I’m all happy anyway, in at 1.8p since mid December at a well over 5k gain (at Freetrade’s close today). My portfolio is 90% in metals and mining stocks, and the gains are outstanding so I’m not minded to change anything soon. I know the industry, its volatility and am happy to roll with this for the time being. Just goes to show the text book portfolio doesn’t always reap the financial rewards . DYOR etc.

[AdamL (Adam)]

It’s great to hear from people with a different risk Vs reward strategy, just because you haven’t diversified quite like the books say. I got burnt on Sirius Minerals so I was quite slow to get into GGP, now I wish I’d done what you did! Presumably you are at least in a few different companies so one going under wouldn’t hit you too hard? What others are you in, what’s the next GGP?

[BramblerJohn (John)]

The next GGP would be good to know

[scudulike (Stu)]

I’m betting on Yellowcake. Been sitting on it a while and it’s 10% up, but hoping for bigger things