Solgold Share Discussion Threads

[dozyduck] 30/11/2020 10:28

Zoros - you seem to misunderstand how dilution will work in Solg's case. Its got nothing to do with its share number in comparison with others.
LT - 1) is unlikely in my view. Potential bidders will be happy to watch Solg milk its own shareholders for exploration spending and to take the risk, until such time as the risk is mininimal.
2) The best option for current shareholders. Lets hope it happens.
3) Will cost the repayment of loans and streams which will diminish cash available to Solg - which is the point of monetising it (or part of it)
4) Is something shareholders should warn NM against, because his wanting to increase authorised shares so massively is the red flag that shows his intention. They should oppose resolution 11.
NM has shown that while an ace explorer, as I've said, he doesn't seem to understand the third requirement of a listed co leader (Explore well, Develop well are the other two) - which is to Manage Shareholder Expectations so as to ensure a healthily rising share price. It was desperation to fall back on the 'exploration/development curve' argument which doesn't necessarily apply to every mining exploration share. Each historical example has performed within its own circumstances of share history and market conditions, and always for a single project - not for the multiple long term exploration spending NM has taken on.
Best solution is to spin off each project, which I think would maximise the total value. NM opposes because 'its too difficult'. Too bad Mate ! You've already taken on something that's' too difficult' !
PS - interesting programme about Grasberg on YouTube !

[arcadian] 30/11/2020 08:54

Low

Thank you for a more measured and balanced reply to DD`s rather pessimistic conclusions about the long term. This is a delicate balancing act and we are uninformed spectators patiently waiting. to see how these massive copper and gold assets will be monetised.

[lefrene] 30/11/2020 08:44

At least the price of copper seems to be on our side at long last.

[zoros1] 30/11/2020 00:13

DD - worry not mon amie. Solg "only" has 2Bn shares outstanding. Still a long long way to go to compete with others in the same state of play (GGP has 4Bn).
As you are being reminded by others - its a defence weapon. Nothing more nothing less.

Loganair - interesting hypothesis. Just one teeny weeny red herring in all that...........Copper demand for EV's. Not going to get anywhere near what is required. Why?
Electrification of Transportation cannot be the final solution. It is too clanky and requires enormous amounts of carbon offsetting to achieve. Those close to the cutting edge know this, which is why the future is...and only can be... HFC's.
No copper needed!
Z
I'll give EV's ten years MAX. Then HFC's will dominate for decades and decades.

[lowtrawler] 29/11/2020 23:25

Interesting and thought provoking post DD. It appears that you believe SOLG are on a path of excessive dilution to which Nick is the architect?

I believe there are still a number of possible paths for SOLG. In order of most likely, they include (but are not limited to):

1. A successful bid is made for SOLG and we disappear into the arms of a major.
2. Alpala is monetized and it provides sufficient funding to progress Porvenir and Rio beyond PEA, some funding to drill our other locations and a residual stake in Alpala.
3. Funding for Alpala is mainly loans, convertibles and streams with minimal dilution on Alpala and a JV / Farm-in is arranged for Porvenir / Rio to avoid further excessive dilution.
4. They continue down the path you think they are taking with equity funding for development of Porvenir, Rio, our other sites and eventually for Alpala build. Leading to massive dilution.

In my view, the 4th option is unlikely but needs to be available in order to negotiate the best outcome on any of the first 3 options.

FWIW, I still believe that Option 2 is currently underway. BHP and NCM do not want SOLG entering into a conditional financing package which minimises their involvement. The CFP was due to be published alongside the PFS. I believe the delayed publication is due to those negotiations taking place.

If I'm correct, they will have been negotiating for a month or more and so an announcement will be close. At the point of announcement, if any outsiders aspire to acquire SOLG, they will need to make a move. Hence, it could get messy very quickly.

Maybe I'm wrong but we should know before the AGM.

[arcadian] 29/11/2020 22:01

That`s the whole point; we don`t know hence the assumptions and conjecture.

Fortunately he has not yet reached the stage in life where he feels he needs to do that for you but if we are patient I`m sure a plan will unfold supported by more information than is available at the moment.

[dozyduck] 29/11/2020 21:52

I don't think there's anything 'unfounded' about the scenario I've described. In fact it's obvious, and 'founded' on what we know. Its up to NM to come up with a convincing refutation - which he hasn't yet.

[loganair] 29/11/2020 19:56

Jefferies forecasts multi-year copper deficits, a surge in prices:


“Renewable power systems are at least five times more copper-intensive than conventional power,” the analysts note.

The copper market is heading into a multi-year period of deficits, broking house Jefferies has predicted in an extensive and in-depth analysis.

There’s been some disruption to supply this year due to coronavirus, but the Jefferies analysis focusses more on the potential increases in demand driven by growth in the deployment of renewable energy and electric vehicles.

As a natural knock-on effect, Jefferies predicts that higher prices will incentivise investment in new mine capacity.

Copper price forecasts lead to upgrades:

Accordingly, the broker has raised its copper price forecasts, which it runs on three different scenarios, a base case, a bull case for renewables, and a bear case.

In all three scenarios the price looks set to peak in 2026, under the base scenario at US$4.50 per pound, under the bull scenario at US$5.00, and under the bear scenario at US$3.75.

The timing will obviously be key to the accuracy of the Jefferies forecasts, but there’s little doubt the way it’s reading the trends is correct.
Renewables five times more copper-intensive:

In an interesting slide midway through the analysis, the broker lists all the countries that have pledged or legislated for a carbon neutral future. The list is extensive, includes all the world’s major economies except the USA.

The UK has already all but phased out its reliance on coal. Natural gas will be next, if harder to achieve.

All of which means investment in renewable infrastructure globally is likely to be extensive.

“Renewable power systems are at least five times more copper-intensive than conventional power,” says Jefferies.

“Offshore wind is the most copper intensive, at around 15 tonnes per megawatt (MW) of installed capacity, due to extensive copper cable requirements. This compares to onshore wind and solar at around five tonnes per megawatt and conventional power at around one tonne per megawatt.

It’s these kind of exponential increases that have lead Jefferies to estimate that on the base case global copper demand is likely to increase from around 23mln tonnes this year to over 30mln tonnes by 2030.

“We forecast copper demand in renewable energy to increase from 991,000 in 2020 to 1.9mln tonnes in 2030 in our base case and to 6.4mln tonnes in our bull case,” says Jefferies.

Electric vehicle demand revving up:

In percentage terms, though, the biggest boost to demand will come from electric vehicles. In this space, demand will be ten times higher in 2030, with overall tonnes consumed amounting to nearly 1.7mln tonnes.

“EVs require around 83kg of copper on average while most internal combustion engine vehicles contain less than 20kg of copper,” Jefferies points out.

“In addition, EV charging points contain around 10kg of copper each.”

By 2050 Jefferies reckons there’ll be at 60mln electric vehicles on the roads.

All of which means copper demand will significantly exceed supply, starting in 2021. And shortages should lead to substantially higher prices.

“If our assumptions are correct, the squeeze higher in copper is a question of 'when' rather than 'if',” says Jefferies.

[mam fach] 29/11/2020 14:30

Wagons seem to be circling NM.
No doubt about it? Entering a critical stage of development.

[dozyduck] 29/11/2020 14:14

To continue. The more I think about it, the less NM's strategy seems in shareholders' interests. With the big increase in authorised shares he wants, its obvious that he plans to fund the next few years' big exploration spending by issuing shares and accepting the dilution involved. Alpala, even if funded, won't deliver any cash until 6-7 years after construction start - ie not before 8 years from now. That's an enormous outflow of shareholders' drilling cash meanwhile before anything comes in. That's unless he sells off Alpala well beforehand - where the delay a buyer will incur will cut the value to him at a discount which could be 30%. NM may well keep insisting he's going to take Alpala to production. But he evolved that aim a long time ago, no doubt hoping the share price will reflect whatever discoveries he might make meanwhile. Unfortunately it isn't. The dilution fear has now reached a critical stage in investors' minds and is unlikely to go away regardless of exploration success. Even if Porvenir can deliver cash before Alpala, its going to need its own funding and still won't deliver before, say, five years from now. A good leader changes his strategy if his enemy (events dear boy !) changes his. NM's stubborn refusal to change is becoming a big liability. Pity PI's (to whom a rising instead of a static share price) is more important than to the major holders) can't (and some can't see the reason to) do anything about it!
Have a nice remainder of the day !

[dozyduck] 28/11/2020 22:16

It seems Lady Graphite is some sad PR nerd, trying to flog one of her/his/its clients. Doesn't realise we now know how to find her and sue her.

[novicetrade68] 28/11/2020 20:42

(only reminder for later)



SolGold PLC AGM Disapplication Resolutions Explained

[arcadian] 28/11/2020 18:53

Zoros re the movies

I`m afraid Paul Greengrass got there first. His films were about someone searching for his real identity while the big boys want to take him out and everyone play by their rules.

[loganair] 28/11/2020 16:39

I've just been watching a very recent interview by the fund manager Warren Irwin who is a large investor in Cascabel via Cornerstone.

Irwin invests in mining Explorers and sells out before the mine is developed and brought into production to reinvest his profits in new mining explorers.

He said that he expects either BHP, Newmont or the Chinese to buy out Cascabel and just hopes they'll pay a good fair price for it. He didn't mention about Cornerstone selling their share in Cascabel to Solgold as he expects BHP, Newmont or the Chinese to pay more.

[zoros1] 28/11/2020 14:06

JV Alpala and use the share dilution to pay for (go it alone) Porvenir PFS!
Z

[mam fach] 28/11/2020 11:54

NM has always maintained he would go to production.
But back then we didn't know enormity of find.
Got no problem selling off or farming out Alpala to concentrate on taking another district to production.
Many of us have held for years as we have faith in NM.
Now getting to the nitty gritty.

[p@] 28/11/2020 11:47

Sandeep Biswas favourite to take over at Rio Tinto
The Australian - 27th November 2020

It has been almost three months since Rio Tinto’s board bowed to the inevitable and announced the departure of chief executive Jean Sebastien Jacques, and the search for a replacement is about to come to a close.

It is understood the appointment of the next Rio chief executive is imminent. If a new Rio boss isn’t announced next week, then it will be soon after, with the board understood to be weighing the last few names left in the pot of hopefuls in the hope of making a decision by December 11, three months after Jacques’ departure was announced.

The shortlist is a closely kept secret between Rio’s nomination committee and London-based headhunters MWM Consulting, which led Rio’s search.

But industry sources suggest Newcrest Mining boss Sandeep Biswas is at the front of the pack, with other names still believed to be in contention including Anglo American finance chief Stephen Pearce, former Fortescue chief executive Nev Power, former BP CFO Brian Gilvary, and perhaps a handful of others....

[lowtrawler] 28/11/2020 11:29

Assuming we're not taken out by a bid in the next 12 months, we will hopefully have published the DFS. Part of the build will need equity funding in order to maximize shareholder value. If Rio and Porvenir need taken to PEA, they will also need equity funding. Hence, there are good reasons for the Board to need the flexibility they are asking for.Where DD and I agree is that monetising Alpala will provide more shareholder value than trying to go it alone. Done in the right way, it could fund Rio and Porvenir beyond PEA, additional exploration and allow us to retain an ongoing interest in Alpala. I strongly suspect those discussions are currently taking place. To negotiate the best deal, Nick needs to have equity capability to fall back on.

[zoros1] 28/11/2020 10:59

You should turn it into a film Arcadian!
Z

[arcadian] 28/11/2020 10:43

Thanks DD for highlighting the matter and thanks to for Low and others for dissecting the issues. Made me go back and look at Karl`s RNS.


Behind The Roman Army, those who actually did the fighting, came the women and all the hangers on. This bedraggled lot of bags and baggage were known as the et cetera.

This is where we find ourselves, behind the front line waiting for news of great deeds. Patience, hope, speculation and an occasional infighting born of frustration keep us going and we would do well not to let some poor opinions of our general reach the opposing forces.

Our leader has yet to make his battle strategy known and that`s perhaps as well as it`s tough out there. and I fear that if he doesn`t survive neither will we.

[dozyduck] 28/11/2020 10:08

Re authorised share increase. Sorry - got my maths wrong. The max extra shares NM wants authority for is 67% of existing. ie 67% dilution if all used. Not sure how long between each 5%+5% allowed to be issued each time - but NM could presumably make serial issues up to whatever he wants. first 5% each time can be for 'general' purposes. Any extra 5% can be for 'specified capital investment' - which I would take to cover exploration spending. Why does he want freedom to issue so much ?
(By the way, when companies in most industries make a 'specified capital investment', they usually justify by the return it will make - usually within a reasonable time of a few years. With mining exploration spending, no one can forecast any return, and hardly ever within ten years or so)

[mirabeau] 28/11/2020 09:20

Lt

Ah, I thought that may be the case.

Many thanks for the reply

M