Fully-listed (mainly) Gold investor, Golden Prospect (GPM) released its interims to June 2022 last week. With the Gold price slipping over the period and Gold miners underperforming the metal, the numbers were not good – hardly a surprise, given that Golden Prospect’s shares outperform in both directions – but reader Goobs spotted what looked at first sight like it might be a bit of a problemo. I made a few enquiries……
I see this morning that Gold hit around $2025 per oz as the Ukrainian crisis and the associated sanctions continued to hit the market. The price has since eased a little to $2009 but this is the highest the yellow metal has been since the record high at $2063 in August 2020 and I don’t see anything to hold it back beyond a short bout of profit-taking.
Predominantly precious metals companies investor, Golden Prospect Precious Metals (GPM) has announced results for the first half of 2021, with experienced Chairman Malcolm Burne noting “governments acknowledge gold’s safe-haven protection even if the fickle investment community does not” currently.
Fully-listed Christmas share tip of mine, Golden Prospect (GPM) released its interim results to June this morning. The bottom-line news was that Golden Prospect lost 16% in NAV terms over the period – not exactly a healthy performance. But as long commented on these web-pages, Gold and Gold stocks have been in a correction since the beginning of August 2020 and I have commented before that Golden Prospect is likely to over-perform in both directions so when times are good they are really good for shareholders, but when Gold goes through stickier times Golden Prospect is likely to underperform. And so it has been: Golden Prospect's NAV dropped 16% whilst GDXJ (the “junior” gold-miners ETF) dropped 14.7% and the yellow metal itself only fell by 6.4%.
Precious metals companies investor Golden Prospect Precious Metals (GPM) has announced its 2020 results 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...
