Solgold Share Discussion Threads

[mr.elbee] 03/11/2020 11:39

very very wise

I have lost a fortune on gold exploration companies

[rougepierre] 03/11/2020 11:34

Here's an interesting and directly relevant article, possibly helping explain why SOLG is underperforming...



So for all of you who prefer ETFs you may be helping hold back SOLG price prospects...?

We need a bid and daytrading cowboys...

AIMO as usual...

[georgezoros] 03/11/2020 11:29

I worry about you schlem - pull your socks up and pile back in ffs!
The water's lovely!
Z

[mirabeau] 03/11/2020 11:23

Yes, a fool and a French aristo all rolled into one useless pile of saggy bilge

[rougepierre] 03/11/2020 11:22

yes he is....

[rougepierre] 03/11/2020 11:20

Sound but unexciting article...nothing new...just reaffirms my view that MacDonald is a 'small time charlie"...pot calling kettle black methinks re him and NM...

The point the article misses is the obvious one that a JV with BHP or Newcrest makes the whole funding problem go away...and ironically would suit CGP unless they were taken out first...

[georgezoros] 03/11/2020 11:18

and mirabeau is schlem?
Z

[mirabeau] 03/11/2020 11:12

SolGold squabbles complicate development task

Alex Hamer

A football match quickly gets confusing if one team’s players can’t decide which side they are on. This is not dissimilar to the recent experience of SolGold (SOLG) investors, watching on as purported collaborators work against each other.

The company is at odds with Cornerstone Capital Resources (Can:CGP), a 15 per cent owner of the Alpala deposit and an 8 per cent shareholder of SolGold itself, over how the high-value Ecuadorian copper and gold project should be developed.

Further protest has come from another sizeable shareholder, Newcrest Mining (Au:NCM), over the company’s decision to sell off 1 per cent of future production for $100m. Institutional holders’ unhappiness over governance has pushed the company to expand the independence and breadth of its board.

The Cornerstone relationship is the rockiest, however, given the Canadian company’s push for a sale of Alpala and SolGold’s insistence it can build the multi-billion-dollar mine itself. Last month, a SolGold takeover bid for Cornerstone expired.

“If they wanted our co-operation, the all-share, failed hostile bid was not the way to do it,” Cornerstone chief executive Brooke Macdonald told Investors Chronicle. The group’s push for a sale comes from the practicalities of being a cash-light equity partner in Alpala – the latter of which means finding hundreds of millions of dollars to fund its share of development costs.

In fact, feasibility work on the project has left it progressively more indebted to SolGold, which is lending Cornerstone its share of funding ahead of giving the final green light for the mine. At present, this is expected to be paid off from eventual project revenues, although Mr Macdonald also remains sceptical that SolGold will be able to fund construction of Alpala.

“[SolGold talks] about creating the next BHP in Ecuador with a pipeline of other projects. All of that is very interesting, but there are cases where junior companies got into trouble trying to build a project of this size,” he said. “We suspect that at the end of the day the capital cost will be quite a bit larger than what is estimated in the preliminary economic assessment, and that it is just too much heavy a lift for a junior mining company.”

An updated cost estimate for Alpala – from the $2.4bn-$2.8bn (£1.9bn-£2.2bn) released last year – was expected at the end of September, but Covid-19 restrictions have delayed the pre-feasibility study. Managing director Nicholas Mather told us the project had a “perfect storm” of factors that attracted financiers, including the “high-grade core” of the deposit and current gold and copper price strength, and said the company was already being approached with funding offers.



Sol what

This funding discussion becomes moot if a buyer turns up. The most obvious candidate is Australian giant BHP (BHP), which both owns 13.6 per cent of SolGold and recently underlined its interest in copper. A restriction on BHP buying more shares in SolGold ended in mid-October, meaning speculation could soon hot up again. Newcrest – which also holds a 13.6 per cent stake – could also move on SolGold, despite its objection to the royalty sale.

Last year’s preliminary economic assessment put Alpala’s net present value at $3.6bn-$3.9bn (post-tax, with a 9 per cent discount). This was done with a copper price forecast of over $7,000 a tonne and a $1,300-an-ounce (oz) gold price, compared with their current prices of around $6,700 a tonne and $1,900 an oz, respectively. SolGold itself has a market capitalisation of £686m – a run at the end of September helping it rise to 40p a share – and recent mining deals have seen 20-30 per cent premiums for cash offers. Of course, any buyer would be committing itself to spending billions on building the mine, which is one of only a few major copper discoveries of recent years.

Even with the existing major miners involved, Cornerstone thinks third-parties are still paying attention. “It's possible enough that a third-party coming in with an aggressive bid could create enough tension to force people to get into a bidding war,” Mr Macdonald told us. “There are just so few deposits of this size available.”

Mr Mather’s argument against selling off Alpala is SolGold’s potential to turn into a major player itself. “The blueprint that we created at Alpala is replicable, and applicable to all 14 of our other projects throughout Ecuador,” he said. “BHP doesn't have [these exploration prospects], Newcrest doesn't have them, we have them.”

Given the apparent potential of these other wholly-owned targets, would Mr Mather rather not sell Alpala and focus on those without the Cornerstone angle? The SolGold boss said it wasn’t something he was considering. Even if SolGold pushes this project through to production successfully, it will still be partly reliant on exploration prospects for share price improvement, given the years of construction needed. In any case, it’s hard to see a constructive relationship suddenly blooming between SolGold and Cornerstone.

An ideal world for SolGold would see Cornerstone giving up and selling its Alpala stake, which SolGold has first dibs on. But Mr Macdonald and co seem just as determined as Mr Mather to get their way and find a buyer.

Given mining’s cyclical nature, the difficulty of building major new operations and SolGold’s ability to annoy its partners, that might be the best option for everyone.

end

[rougepierre] 03/11/2020 11:11

Any chance of a cut and paste pob...thanks...

[pob69] 03/11/2020 11:06

Interesting article SOLG $SOLG $SOLG.L #porvenir #cascabel #ecuador $CGP

[georgezoros] 03/11/2020 10:57

Rouge - r u redknight on the other board?
Z

[rougepierre] 03/11/2020 10:47

LT you may find this article of interest re the above...



Lets hope we end up benefiting from the 'overvaluation trap' by Barrick for SOLG...

[rougepierre] 03/11/2020 10:43

Interesting view LT...respect...

However, given how bullish we all are on here, I think BHP, Barrick (my hunch) or anyone would probably be agreeably surprised by what they've bought if they put in a knockout bid right now...

Somebody on LSE was recently suggesting that nobody would bid before the DFS next Autumn...that's not how takeovers work...I know because I've run the process for major corporation and AIM companies alike...both bid and defence...

You do your own analysis, because its just as much about YOUR needs as the opportunity you are buying...you decide the maximum price you are prepared to pay and you go for it...

Ironically, in my wide experience, bidders often end up paying more than the maximum they said they would pay, sometimes macho but more often because they get on a conveyor belt where they've convinced themselves of the need to buy...

AIMO was usual...

[lowtrawler] 03/11/2020 10:34

RP, it's like the old (false) adage, "nobody ever got fired for buying IBM". The decision makers in BHP have a career and would put that on the line if they bought SOLG without proven reserves that subsequently failed to materialize. If BHP end up paying $2bn more, so be it. They will get the same praise pulling off the purchase at $4bn as they would at $2bn.

[rougepierre] 03/11/2020 10:14

If I was the GFD/CEO of BHP I wouldn't wait for the PFS or Porvenir/Rio etc. results before bidding...

I would already have done my own research and have a view on what the asset is worth to me. If I bid now the price consideration will be based on the current SOLG SP, the known knowns and unknowns and how the portfolio would fit with my existing portfolio and need for more copper/gold ore streams, plus other strategic factors such as projected supply/demand factors, a 'country view' on Ecuador, etc...

If I wait for the PFS and any new assays I would expect the share price to rise and therefore the 'starting price' for my bid will have to be higher...

And behind all this I know that whenever I bid I will be following it up with Due Diligence that will determine precisely what Solgold has and precisely what it is worth to me. That will limit the highest price I am prepared to pay, unless the Board has already recommended the highest price I have already bid...

There is an interesting parallel for each of us...do you buy the shares now and gambles that there is good news on the way that will boost the share price by an indeterminate amount, or do you wait for the good news to emerge...let the share price settle down and then buy the shares certain in the knowledge of the latest prospects...?

Remember the old adage "buy on rumour sell on fact"...the SOLG share price surged 70% largely on the Porvenir news...since then its fallen back c25% on the news vacuum...

That's how tactical buying and selling opportunities are created despite a long term bullish outlook...hope this helps...

AIMO as usual...

[rougepierre] 03/11/2020 10:03

Interesting what you said about Barchart...

British Bulls have a recommendation of "Short" right now



They went short yesterday at 33.46p with a recommendation:

"Signal Update

Our system’s recommendation today is to SHORT. The BEARISH ONE BLACK CROW pattern finally received a confirmation because the prices crossed below the confirmation level which was at 34.0000, and our valid average selling price stands now at 33.4600. The previous BUY signal was issued on 26/10/2020, 7 days ago, when the stock price was 35.6500. Since then SOLG.L has fallen by -6.14%.

Market Outlook

The bears have strong evidence and this evidence prompts us to make a bearish bet. The bearish pattern that was previously identified is finally confirmed and a SHORT signal is generated. Follow the signal and profit from the bearish enthusiasm before it is too late. SHORT is a dangerous signal. Sudden increases in prices can lead to huge losses. For this reason stop loss levels must be kept in mind at all times and SHORT orders must never be placed without a stop loss."

Now I don't use either British Bulls or Barchart to make my decisions, but I do look at them from time to time...

As to my LSE posts, I always press "Strong Buy" because I believe SOLG is a long term excellent bet, (as is ATYM IMO). I will do so until I think they've got no further to go in the short to medium term (which would probably have to be 125/200)

Its a shorthand for conveying that I am bullish about the shares in the medium term.

However, in a porfolio of c£1 million I'm not going to have all my money in one share. As I said previously my strategy is about Gold/Silver/Copper, hence ATYM, ADT1, GPM, HOC, FRES, CEY, PAA; etc.

For each of these, there are several factors to take into account:

'Macro' Market Factors - so, with almost £500k exposed to SOLG, and concerns about the possibility of a contested election, I thought it wise to sell a quarter of our holding. a large chunk of it went into Gilts, ready to pay the subscription on GPSS by the end of November. The rest was kept for reinvestment purposes; e.g. the HOC share price fell back to 207p and they earn even more from gold than silver and in my view were oversold.

When SOLG fell back to 34 I thought that was overdone so, partly for cash and largely through a T20, I bought back just over the 300k we had sold and your know the rest...

Stock specific factors: e.g. CEY had bad news and IMO the share price fell too far, so I bought some at 122p for a longer term recovery. HOC had what was regarded as disappointing results and they fell to 207p, which I regarded as far too cheap; GPSS has been falling because there is a 46.14p call to pay on them by 30 November and I think some people are unloading rather than pay the call, so I thought they were temporarily cheap; etc.

Now NONE of this is a Buy or Sell recommendation, I am simply giving the insight that although my longer term view might be Buy or Avoid or Wait, there are sometimes temporary circumstances that lead me to change my position short term rather than hold or avoid indefinitely...it is through such tactical decisions that my portfolio was up over 110% this year when SOLG hit 42.7p...so I took profits to lock them in and reduce our exposure.

Anyhow, that's more than enough for now...

GLA

[rougepierre] 03/11/2020 09:42

JL If you look at the list of trades on some sites it will have the UT symbol, just like AT, etc.

Your stockbroker may well not show such symbols; II doesn't and they get their feed from Morningstar, probably your broker too...

But LSE does and the official London Stock Exchange site does also, so I just looked and there are three "Off Book" trades and two "AT" trades (Automated Trade)



Its very easy to find the UT if you are looking at that site or LSE. It is invariably at or just after 16.35 and is marked UT beside it. Remember also that the trades you see on any site are delayed 15/20 minutes anyhow, unless you have Level 2 on here for example...

A great deal of trades are ATs these days, often conducted by 'Autobots' driven by algorithms...

I hope this helps...keep up the good work on research...

[lefrene] 03/11/2020 09:42

LT, I believe you are correct since no one is going to risk their career on a 'punt', hence wait for proofs before making a move. Certainty is worth paying a premium for.

[lowtrawler] 03/11/2020 09:39

MK, we've had this discussion before. If I were BHP, I'd wait for the Porvenir and Rio MREs.

[mknight] 03/11/2020 09:34

Lowtrawler

It remains my opinion .

Put yourself in BHP,s position .

What would you do ?

[jlondon] 03/11/2020 09:34

Solgold Live Share Chart:

hxxps://uk.investing.com/equities/solgold-plc-candlestick

The share chart shows the live price of Solgold and there is NO BREAKDOWN of the 32p price level.

There is a green candle at 33.27p.

Live at 9.32am, Tues 3 Nov 2020
==
I said I will not be replying and there is no need for U/T because I never looked at the price at the London South East Solgold. I only have my stock account page open and I only see live price or rather sell and buy price. There is NO U/T or transactions shown etc. All my prices are TAKEN LIVE from my stockbroking account of live trade.

People reading this forum CAN SEE that all the market uncertainty and share price to break down is NOT CORRECT from this morning*s markets which I have posted is UP in America, UK, Europe and Asia. The HIGH price for the day is 34p a/c to Google Finance Solgold & NOT DOWN as the naysayers said. All wrong and a big BOOPER shown by REALITY today.