Solgold Share Discussion Threads

[chavitravi2] 03/11/2020 16:12

What a bummer, sold my Lloyd's at a lose. They go up this goes down.
I wish I could do something right.

[pecker1] 03/11/2020 16:06

georgezoros,

My point was that perception often lags reality on the ground. Agree that recent changes in Ecuador have been favourable - granting of permits, positive statements from minister etc, but they are recent and it takes time for outsiders to become convinced the changes will be permanant. A few hundred posts ago there was an interesting discussion on the discount on Solg shares because if its assets were in say, Australia/Canada, the share price would be far higher than it is.

As to confidentiality, I don't understand your point. CEOs of mining companies often talk to each other and (difficult now because of virus restrictions on travel) go to see a mine and/or exploration project in person under a confidentiality agreement. If this leads to anything more serious then it will be reported to the market at an appropriate time. Such discussions are perfectly normal and sensibly are confidential.

And your final comment escapes me as the 100% owned subsidiaries of Solg have nothing to do with ENSA as far as I know.

[dozyduck] 03/11/2020 15:02

How many times have you said the price will rocket MkN ? List them please, I've lost count.

[mknight] 03/11/2020 13:38

Market for Solgold is very strange

As soon as NM releases the first drill hole asseys at Porvenir the price will rocket

If as

NM said its a company changing hole or words to that affect .

He is going to look extremly stupid if it does not come in fabulous.

[lefrene] 03/11/2020 13:33

Gold goes back over $1900, and Solg goes............

[lowtrawler] 03/11/2020 13:33

GG, one of the expected blockbuster announcements is the PFS alongside full provisional funding for Alpala. The funding is the blockbuster part. That will give a clear statement that SOLG can choose to go it alone and, for the first time, will indicate what proportion of the spoils will belong to shareholders.

[goodgrief] 03/11/2020 13:29

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



NM is on record in recent interviews saying Alpala is financier's dream.

[pecker1] 03/11/2020 13:20

IMHO, the perceived political risk in Ecuador could deter any hostile bid until well into 2021. The logjam on permits etc only gave way a few months ago. Also agree with LT's take on the majors not wanting to run unnecessary risks. Wasn't so long ago that several mining company CEOs were fired for making bad, hugely expensive acquisitions.

Much more likely will be a confidential approach by a major to Solg to do a farm-in/JV on one of its projects. If Porvenir comes good, NMs shock and awe drill programme
should indicate a likely development timeline which might lead to initial production even before Alpala. Then there is Rio.

NMs comments on Blanca (Thanks to JL) are in line with his previous comments about using a gold discovery as a banker for the development of his tier 1 projects. If Blanca does not make the grade, I hope NM will rapidly redeploy the drill to another of his gold prospects.

[greenelf] 03/11/2020 13:13

Too much detail. Spare us.

[rougepierre] 03/11/2020 12:07

Yippee...managed to get all the DGR shares and options I applied for...

Now got 190,000 and 205,000 respectively...

[rougepierre] 03/11/2020 11:52

Agree with everything in that LT...

[lowtrawler] 03/11/2020 11:47

RP, at the point a bid arrives, the question will be whether Barrick or another outsider can overcome existing holdings?

Nick - 20%
BHP - 13%
Newcrest - 13%
CGP - 7%
Blackrock - 5%

Assuming BHP are interested in buying and Nick will hold out for an eye-watering price, it will be difficult for another bidder to gain traction without meeting whatever Nick's eye-watering price might be.

CGP are likely to make their vote conditional on the bidder also paying an eye-watering price for their share of Alpala.

I understand why you think Barrick would be interested but between Nick, CGP and BHP, they start with 40% of the shares not being voted in their favour unless they pay top dollar.

Even BHP launching a bid will start with the 27% disadvantage between Nick and CGP. To be successful, a low offer will not cut it. That's as true today as it will be in 6 months time.

MK believes an opportunistic bid around 75p from BHP would currently win the day. In my view, only around 100p - 120p would be sufficient for shareholder support. Waiting for MREs, a successful bid may need 120p - 150p but it is hugely de-risked and not significantly more expensive.

Any outside bidder is going to have to really want us as they will need to add a significant premium onto whatever BHP would need to pay in order to secure support from Nick, CGP, Newcrest and Blackrock.

As a shareholder, the ownership structure works in my favour to prevent low offers from succeeding but acts against me by discouraging outside bidders. However, if an outside bidder does throw their hat into the ring, our price could go beyond any reasonable expectations.

[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