GOR - Gold Road Resources

[finicky]

Some 25 Sept comments from Greg Canavan about the gold positioning in his p/f and referencing GOR. In an earlier piece back in January he valued GOR at $1.60 but the valuation would be higher now for the unhedged 50% of Gruyere, the De Grey holding and reserves/resources, considering the surge in the $A gold price. From posters elsewhere there seems to be a dissatisfaction with GOR management with opinions that they have too easy a gig for what they're paid since the interest in Gruyere has no operational responsibilities. Some think that free cashflow is being blown on ineffective exploration instead of being returned to shareholders. Uncritically, I had the view that the 'Golden Highway' and 'Yamarna' prospects and resources were showing enough result for the exploration budget but it's not like I scrutinised the costs vs rewards. Luckily I only took a starter pack of shares with my first buy where I assumed a break of $2 was imminent.

Held
Holding

Greg Canavan (fat tail investment advisory)

"As far as our three holdings go, I think WAF has the greatest upside. But also the greatest risk given it’s Africa-based.

NST is around fair value here, or possibly slightly overvalued. It’s a difficult one. Accounting earnings understate its true profitability. But the ‘cash earnings’ that management points to in their results overstate true profitability due to low to zero tax paid.

That will change in the years ahead, so you have to adjust for that.

While NST appears fully valued, it plans to grow production significantly in the years ahead. So it’s worth keeping a core position.

GOR is the cheapest because it has a lower mine life. It is therefore leveraged to exploration success. For this reason, its exploration spend is quite hefty. That’s another reason the market isn’t too excited about it.

But it holds a strategic stake in De Grey Mining [ASX _ DEG] which at these gold prices must be attracting interest from the global majors.

In addition, the market isn’t pricing in much profit growth from the Gruyere operations (using improved 2025 performance as a baseline) so I think it’s worth maintaining a position in GOR.

Action to take: To sum it, I think the significant rally in gold this year provides us with a good opportunity to take some profits and reduce exposure to around 5% of your portfolio."

 

[brerwallabi]

Just realised I must post something in the GOR thread, it’s been a bit flat on the news side.
Seems to be more happening in DEG which GOR still holds an amount of shares in the high teens of DEG.
GOR can be incredibly frustrating when the share price does make some improvement it continually falls back only to go on another run, seems like it’s a groundhog stock.
The dividend this year was a miserable half cent down on last years one cent, guess it might buy a half decent cab sav when I get it.

 

[mullokintyre]

Just realised I must post something in the GOR thread, it’s been a bit flat on the news side.
Seems to be more happening in DEG which GOR still holds an amount of shares in the high teens of DEG.
GOR can be incredibly frustrating when the share price does make some improvement it continually falls back only to go on another run, seems like it’s a groundhog stock.
The dividend this year was a miserable half cent down on last years one cent, guess it might buy a half decent cab sav when I get it.

I'm in.
A nice proxy for deg.
Mick

 

[brerwallabi]

It’s been a long wait, finally GOR makes it back to where it was at the start of the year.
Yesterday’s close at $1.975 was the highest close this year.
Of four gold stocks I own GOR has been the one that has disappointed, a few hiccups in the earlier part of the year didn’t help.
A few brokers now recommend as a strong buy.
The quarterly report no doubt will determine if the upward trajectory continues.

 

[brerwallabi]

Another stock I have to write something on and again nothing significant happening in it.
GOR does its usual 15 to 20% crash again over a few days and slowly recovers back up, hit a low of $1.70 in the month after making $2.00 at the start of November finished today at $1.865.
Need to have a lot of patience with Gold Road.

 

[Sean K]

I thought this may have gone up a little more off the back of the DEG deal, but still OK day for GOR holders. Might finally get through 2 bucks.

 

[finicky]

12 month high today.

As @Sean K has noted GOR will profit from the Northern Star takeover of De Grey (DEG)
From Stonkhead back in May 2024:

"Gold Road Resources (ASX:GOR) has kept its skin in the game at De Grey Mining (ASX _DEG), signing up for its full entitlement as part of an institutional offer that formed part of a crucial $600 million equity raise.
GOR will emerge with around 17.3% of the company, still its largest shareholder despite being diluted down from a 19.9% position .."

Held
Holding

 

[divs4ever]

has gone through $2 , currently $2.05 , but will it hold

 

[mullokintyre]

I'm in.
A nice proxy for deg.
Mick

I'm out at 2.06.
Nice profit, thanks DEG.
Mick

 

[brerwallabi]

I am out today too I have held this for while through it’s many ups and downs.
I think there are a couple of interesting gold stocks around I will look again at OBM which has dropped back and looks a buy again.
Thank you GOR I might look at you again at $1.70.

 

[Dona Ferentes]

from the wires:

Gold Road Resources​

Now the question is what Gold Road Resources does with its 17.3 per cent stake in De Grey.

DataRoom understands that Northern Star has approached Gold Road in the past about buying the interest, but sources say that Gold Road was more keen to find a buyer for the company as a whole and Northern Star would not offer enought to gain the stake in isolation.

Based on the chatter in the market, it would suggest that Northern Star did not discuss its move on De Grey with Gold Road before the latest buyout offer.

Gold Road may now shop its De Grey interest - seen as big enough to block a Northern Star vote gaining approval - to various groups, including Agnico Eagle, which may lob a rival offer or just opt to block the deal with the interest until the share price falls and it can come back.

But many in the market believe that Northern Star is offering a full price at a 37 per cent premium to the $1.52 share price on November 29.

They down play the chances of Agnico Eagle being an interloper, despite being at least double the size of the $20bn Northern Star with a $US42bn market value.

Should Gold Road accept the offer, it has suddenly got a whole lot more cash it can secure with a block trade out of Northern Star (its interest would be worth $865m).

Shareholders have been uneasy about Gold Road embarking on acquisitions, and would almost certainly call for capital returns.

But Gold Road, along with Regis Resources with which it held merger talks in the past, are both shaping up to be serious contenders for EMR Capital’s $2bn Ravenswood gold mine, for which bids are due in February.

Working for Northern Star on its $5bn scrip bid is Macquarie Capital, while De Grey Mining is using Azure Capital, Barrenjoey and Barclays...

https://www.theaustralian.com.au/business/dataroom/after-northern-stars-5bn-de-grey-move-whats-next-on-its-list/news-story/be80ce5acca83fa6e7aa6f4a42f58f8d

 

[finicky]

Gold Road continues to make 52 week highs. Due a pullback?

Held
Holding, not Buying

DAILY

 

[finicky]

Record production Dec Qtr
But not telling us the AISC yet.

A slight miss on whole FY24 guidance.
Cash and Gold went up by $63m for the Dec Qtr so AISC couldn't have been too bad.
Unhedged, no debt.
Now holds listed investnents worth $740m (at 31 Dec)

Held
Holding

 

[finicky]

Another 52 week high for GOR which is also an all time high

Small Holding
Bought too late then ignored the correction as an opportunity to add. Funny stuff started happening like guidance for increased waste to ore and manpower shortages. Sapped confidence.

DAILY

 

[finicky]

Well here's a bit of their exploration expenditure foreseeably bearing fruit.
'Shovel ready' by "late 2026" they are saying and it should not take long from then to be generating cash as ore will be toll milled at the running Gruyere plant, so it's not like there will be a commissioning or ramp up phase. Deposit is 100% owned by GOR and of course the Gruyere plant 50% owned by GOR.

I was a bit influenced by impatient traders whingeing about management goldbricking, with no operational duties at Gruyere while blowing mining profits on ineffectual exploration instead of returning divs to shareholders.

Map shows plenty of other 100% and 50% GOR owned exploration prospects in short trucking distance from Gruyere mill too.

 

[divs4ever]

By Adam Whittaker

Gold Fields said it has made an offer to buy Australian miner Gold Road Resources in a $2.1 billion all-cash deal.

The South African gold miner said Monday that it has offered to buy all of Gold Road's issued shares for 3.05 Australian dollars a share.

Its offer is a 28% premium to Gold Road's closing share price on March 21 and gives the miner an equity value of 3.3 billion Australian dollars ($2.07 billion) , the miner said.

A spokesperson for Gold Road didn't immediately comment.

Gold Fields said that a previous approach made on March 7 also for 3.05 Australian dollar a share was rejected by Gold Road's board.

After rejecting the initial offer, Gold Road proposed to buy the remaining 50% stake of the joint venture in the Gruyere mine they have with Gold Fields. However, Gold Fields won't proceed with this proposal, it said Monday.

Monday's offer gives Gold Road an enterprise value of 2.4 billion Australian dollars.

Write to Adam Whittaker at adam.whittaker@wsj.com

(END) Dow Jones Newswires


i hold GOR

PLEASE NOTE .. there is NO official ASX release on this currently ( on either of my trading platforms )

 

[peter2]

Gold Fields said that a previous approach made on March 7 also for 3.05 Australian dollar a share was rejected by Gold Road's board.

The GOR board haven't mentioned this in any of their recent reports. I think this should have been announced to the market.

 

[divs4ever]

• 52 Week High $2.670

considering the offer is above the 12 month high ( and not a ridiculously low offer .. say $2 )

one might have thought so and even explain why the previous offer was rejected

this might become very interesting

 

[Dona Ferentes]

blimey

 

[Sean K]

Not sure why they didn't do this some time ago and get DEG on the cheap.

South Africa’s Gold Fields has unveiled a $3.3bn takeover bid for Gold Road after running out of patience with its partner in a West Australian gold mine.

The two companies have 50 per cent stakes in the underperforming Gruyere mine, and each wants to own the asset outright.

Gold Road’s other major asset in a 17 per cent stake in De Grey Mining, which is the target of a $5bn takeover play from Northern Star.

Gold Road has shaped as a potential kingmaker if a rival bidder emerged for De Grey, and so far has not declared it intentions on the Northern Star bid.

Gold Fields said on Monday that it had no intention of using the acquisition of Gold Road to start a bidding war with Northern Star over De Grey and its Hemi project in WA’s Pilbara.

Johannesburg-listed Gold Fields said it wanted to own 100 per cent of Gruyere and intended to sell the De Grey stake into the Northern Star bid.

In response, Gold Road has said it wants to buy Gold Fields out of the Gruyere mine.

The standoff between the Gruyere partners comes amid consolidation in the gold sector that last week saw Ramelius Resources and Spartan Resources agree on a $2.4bn union.

It is understood Gold Fields boss Mike Fraser visited Perth last week for face-to-face discussions with Gold Road chairman, Tim Netscher, but became fed up with delays in reaching a deal.

Gold Fields, which has a number of ageing mines in WA, made an all-cash offer of $3.05 a share for Gold Road as of March 7.

The offer included a fixed portion of $2.27 a share plus a variable portion equal to the value of each shareholders’ proportion of Gold Road’s shareholding in De Grey.

Gold Fields – one of the world’s biggest gold producers – operates the Gruyere mine east of Laverton that was built at a cost of more than $620m and started producing gold in 2019.

Gruyere was hailed as only the second world-class new gold mine developed from a greenfield discovery in Australia this century, with De Grey’s Hemi project shaping as the third.

Gold Fields said it made sense for Gold Road to sell its non-operating stake in Gruyere and that it was “regrettable” the proposal has been rejected.

“As part of its rejection of the proposal, Gold Road expressed a preference to enter into an alternative transaction in respect of an acquisition of Gold Fields’ 50 per cent interest in the Gruyere mine,” Gold Fields said.

“Gold Road proposed this would be funded through a combination of Gold Road’s existing cash; monetisation of Gold Road’s marketable securities (the De Grey stake); existing and/or new debt facilities; and issuing new equity.

“Gold Fields has formally responded to Gold Road that it will not be progressing the alternative transaction.”

Gold Fields said it intended to sell the De Grey stake into the Northern Star bid in the absence of a superior proposal.