Reconsidering GPM

Golden Prospect Metals

Dear reader

For those of you who subscribe to my YouTube Channel will have seen that I talked through an update on GPM Golden Prospect Metals. 25% discount to NAV where 91.5% of holdings are either producing or going to be.

I discuss three Levers:

1. The AISC on some could fall as production grows - costs fall and profit rise

2. Gold Price is at a high level; it might go higher - revenue and profit rise

3. Production growth and commencement is forecast to go higher - revenue and profit rise

I walk through the fact that not only have share prices of holdings increased by 81.1% (at least at the top 10), but that the market appears to be ignoring the future expansion of production at both producers and developers (91.5% of holdings) and the expansion of profit per ounce (AISC falls as production grows)

I discuss “AISC” - all in sustaining cost. Bear in mind that this doesn’t typically include tax or interest so could be thought of as an EBIT number so “price earnings” in the video would be adjusted for interest and tax. It doesn’t detract from the fact that the market does not appear to be factoring in the rapid rise in profitability but the $2.3bn “margin” growing to a potential $9.8bn would be lower due to those factors.

Regards

The Oak Bloke

Disclaimers:

This is not advice - make your own investment decisions.

Micro cap and Nano cap holdings might have a higher risk and higher volatility than companies that are traditionally defined as "blue chip"