GPR 0.00% 1.9¢ geopacific resources ltd

Compulsory Takeover of KGD details.

  1. 335 Posts.
    lightbulb Created with Sketch. 37
    Needs to hit 90%, currently sitting on about 85% shares, which moves to 86% allowing for 5% direct interest via Tranche 1.

    Let's also look at Tranche 2...

    Tranche 1 – GPR will spend up to A$0.65m in less than 6 months on due diligence, defining a work program and committing to proceed to Tranche 2. GPR will earn in a total of 5%.

    • Tranche 2 – GPR can spend up to A$8m over 24 months to earn an extra 35% assuming it does not achieve the incentive target of 1.2Moz reserve. KGD will hold 60% including 5% for the PNG Government. Alternatively, if GPR define the 1.2Moz reserve they will earn an additional 46% to take the total to 51%.

    So for those concerned about the takeover being completed, the 1.2 million reserve does not need to be defined for GPR to move to 40% once they have spent 8 million dollars.

    Assuming the 8 million has been spent then that entitles GPR to 40% directly plus 85% of KGD's 60% share, that is, 40% plus 51% = 91%.

    Defining the resource at 1.2m+ moves GPR to 51% plus 85% of KGD's 49%, that is 51% plus 41.65% = 92.65%

    It all makes sense why GPR were content to stop the bidders statement at 85% allowing for Tranche 2.

    I expect a serious rerating in Q1 2018 as a result of both the new reserve estimate release and the takeover completion.

    I took the opportunity to top up this week at 2.5c and urge existing and prospective shareholders to DYOR and weigh up GPR while at this price level.

    GLTA.
    Last edited by backer: 02/12/17
 
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