Precious metals companies investor Golden Prospect Precious Metals (GPM) has announced its 2020 results including emphasising that, with now a higher metal pricing environment, “the precious metal miners… look cheaper on a P/NAV basis than they did pre COVID” (explorers only constituting 11.2% of this fund). So an opportunity? You bet!
Precious metals companies investor Golden Prospect Precious Metals (GPM) has announced 2020 results including emphasising that, with now a higher metal pricing environment, “the precious metal miners… look cheaper on a P/NAV basis than they did pre COVID” (explorers only constituting 11.2% of this fund). So, despite a current 48.5p share price comparing to a 27.6p offer price March 2020 share tip, still an opportunity? Of course it is!
It was announced today that Chairman of Golden Prospect, Malcolm Burne, has opened his wallet and bought 25,000 more shares at 50p a pop. Now sometimes boardroom buying is just a spoof and the amount inconsequential, but I would suggest readers take this director purchase a little more seriously.
It is normally a bad sign when a company releases its FY results late in the afternoon, but yesterday’s issue of numbers from fully-listed Golden Prospect (GPM) at 4.26pm were quite reassuring. I wonder if it might have been better to wait for the following morning to avoid triggering cynics like me!
I noted two weeks ago that Gold had gone nowhere for two and a half weeks. Then the Gold price was $1734, down from the previous week’s $1745 and here we are a fortnight later with the Gold price at $1744 – it is like watching paint dry! But there looks to be some signs of hope that there are northward stirrings heading this way.
As I write, the price of Gold seems to be going nowhere: it has been hanging around $1850 per ounce pretty much for the whole of January and is still there (more-or-less) now. Silver, on the other hand, has been all over the place. One might have therefore assumed that fully-listed Golden Prospect (GPM) – as a gold mining investor – would have been a very quiet place to be. But it hasn’t been.
The response to the covid story of 2020 has been, short-term, government largesse and looks set to be longer-term debt and economic problems. In short, the stage looks set for gold to outperform – particularly with it down from more than $2,000 per ounce reached in the summer to currently around $1,860. So that means you need leveraged exposure to that.
Fully-listed Golden Prospect (GPM) has announced that the Subscription Trustee has exercised all the outstanding subscription shares for Golden Prospect (GPSS) and raised £4.77 million for the company as a result. Good news for the company, and perhaps a little good news for former holders who did not pony up the 46.14p per subscription share to convert into ordinary shares - although we will have to wait and see just how much will be returned to former subscription shareholders, as we are not told. But it is not such good news for ordinary shareholders who will be diluted and thus the potential NAV per share as of Tuesday night drops from 67.56p to 60.43p.
I messed up on the subscription shares for fully listed Golden Prospect (GPM), as discussed here. It looked a great play, the maths made sense but unfortunately the timing of the expiry and the Gold correction caught me out. But it looks as though there is a silver lining and despite large quantities of egg on my face, I firmly believe the full shares are worth a jolly good look right now.
Gold took a bath on Monday and continued to drift on Tuesday. For all the positive signs that the correction in Gold and gold stocks was perhaps nearing its end, on Monday lunchtime the market turned against the yellow metal and my play on Golden Prospect subscription shares (GPSS) has taken a near-terminal decline. So what now?
I have been chewing over what to do about my little stash of subscription shares for fully listed Golden Prospect (full shares: GPM, subs: GPSS) as the deadline for coughing up the subscription price is almost upon us. There are hard decisions to be made….
Jordan Roy-Byrne, of TheDailyGold.com wondered last night whether we are heading for the low point of the current correction on gold and gold stocks. He thinks that there is massive support just below where we are now, and that there could be a rebound in the coming days – but will it come in time for Golden Prospect (GPM) and its subscription shares (GPSS)?
Trading in Golden Prospect (GPM) and its subscription shares (GPSS), for a sad nerd like me, is fascinating. The shares are just about heading north, the subs are down and the Gold price is just about rising, sort of. Followers of Jordan Roy-Byrne of TheDailyGold.com are waiting and waiting for that glorious buying opportunity which seems a matter of days or weeks away whilst at the same time Golden Prospect’s subscription deadline falls at the end of the month – just two weeks away.
What if the holders of fully-listed Golden Prospect subscription shares (GPSS) do not pay the 46p to convert them into ordinary shares (GPM)? With the full shares trading down at 51.5p and the subs now at just 4.6p in the middle, a further wobble in gold stocks could see the subs seen as not worth converting. But what then?
Well, not so fast, because Joe Biden hasn’t formally won yet but the writing is on the wall. Notwithstanding that minor detail, Gold has had a storming few days, rising to $1950 per oz having kicked off the week at sub-$1880. One very strong performer was fully-listed Golden Prospect (GPM), along with its subscription shares (GPSS).
FinnCap (being polite) is house to fully-listed Golden Prospect Precious Metals (GPM), so you would not expect the genius writers to say sell. Since they are also talking my book (I am a proud owner of both ordinary and subscrition shares), naturally I think the writers are extremely clever (despite some comical number) so the broker note is worth a butchers...
Shares in fully-listed Golden Prospect Precious Metals (GPM) are now down to 56p to buy (55.5p mid) and if you are a gold-bull, bearing in mind the most recent NAV per share of 67.91p as of last night appear to be a very strong buy...except for those subscription shares (which I hold, for the avoidance of doubt), due for conversion at the end of next month. It looks as though the resulting NAV post-subscription will be lower as a result, but although I am talking my own book, the Subs themselves are now just 6p to buy and look a very interesting play for they are now essentially option money...
Without being too rude, Malcolm Burne – Chairman of fully-listed Golden Prospect (GPM) – has seen it all before during a long career involved in gold. This morning Golden Prospect announced its interims to June which showed a 63.6% increase in net assets and a 54% increase in net assets per share – not bad for six months.
I have no crystal ball, so shares in Malcolm Burne’s Golden Prospect (GPM) could fall further before going up again, but I am convinced that it is now an outright buy.
If you are invested in big players on the Nasdaq or the Dow Jones it has been an interesting week so far. I say “interesting”, but it is in the Chinese sense – others might view it as worrying. One minute they are crashing, the next they are up sharply. The fear has to be that we could be about to head sharply south but there are enough buy-the-dips investors still around….for now. Gold, on the other hand, is caught in a range of around $1900 to just under $2000 per ounce.
Shares in closed-end investment company aiming to provide investors with capital growth from a portfolio of companies involved in the gold and precious metals sector Golden Prospect Precious Metals (GPM) reached over 70p last month but have since fallen back and are now at a 65p offer price. With, we consider, top-quality management and the gold bull further to go we now recommend a buy here...
Gold is still up from around $1,300 a year ago and current uncertainty and economic responses look to create a potential perfect storm for precious metals ahead. We believe this is a geared, but lower-risk way than most, to play it… The sell off of gold in the past week is a dash for cash to cover trading losses elsewhere. But that will not last and you MUST have gold exposure.
My old pal Malcolm Burne is involved with this company and this interview with the manager of Golden Prospect Precious Metals (GPM) is quite interesting at a macro as well as a company specific level.
As is evident on the daily share price chart of Golden Prospect (GPM) going back to the summer of 2014, this is a share which had until very recently been battered quite badly by the bears.
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