Solgold Share Discussion Threads

[phattrader1] 03/5/2020 14:00

The package will be a mix of debt, convertible loans and equity. 50/25/25 imo.

But the equity won’t be raised until we need the cash meaning at 80p+.

This will enable us to work on the studies, permits and exploration. With a share issue when we need it for mine development.

Ingo Hofmaier knows what he’s doing. NM is a 5% shareholder - this is his retirement. £89-178m will what he wants.

[dozyduck] 03/5/2020 13:51

RP. If Solg doesn't raise cash from equity or convertibles, WHO ELSE is going to put up the c $1bn needed (after a bank loan) to build ? Lenders always require someone's equity shares to be on the line for any loss before they do. If its not Solg's equity, it will be someone else's, who will take that share of Alpala's value. For NM to say such a thing, adds to my doubts about his finance nous, even though he might be a good gold digger !

[mknight] 03/5/2020 13:36

Rougepierre. Makes sense a good way to invest .

[rougepierre] 03/5/2020 12:57

DD I believe in the webinar Nick said "we MAY have to issue equity or Convertibles..."

Re my 40p Sell...that is not based on value; one of my core strategies is to sell half a holding when it doubles in value, thereby leaving the other half in for free...I did that with ATYM for example but held the rest to 260p...

The actual quote was "Agreed LT which is why I will sell half at 40p unless its eclipsed by a spike..."

What I meant by that was that if the share price gets there progressively, I will sell at 40p, but if it spikes and looks like going further, I will hold off...

Anyhow...nobody knows, but we should continue to differentiate between the value of Alpala and the value of SOLG, because the share price rocketed to 45p long before any MRE, for example...

[lowtrawler] 03/5/2020 12:46

I have to admit, I often underestimate how much sentiment, excitement and exhuberance can elevate a price and for how long. This has cost me on a number of occasions.

[greenelf] 03/5/2020 12:38

Can try to be too clever at times, when a straight hold may be more productive :) . But yes, all depends on your own strategy and preference.

[lowtrawler] 03/5/2020 12:33

If there is something unexpected in the announcement, possibly. It's very easy to get caught up in the moment and lose out on a trading opportunity unless you have a strategy. That's my contrarian coming out.

[greenelf] 03/5/2020 12:28

We shall see, these things are hard to predict. Play it by ear.

[lowtrawler] 03/5/2020 12:24

I really don't think we should get over excited for this week's news. We all know what to expect. The details will be interesting but take time to digest.I think we will move to the higher end of our new trading range (27p - 34p). Any higher and I'd say sell some to trade the bounce.

[lowtrawler] 03/5/2020 12:15

Phat. I'm a chartered accountant but not a tax expert. Even I could structure a deal to avoid the capital gains tax. It's all gamesmanship.

[greenelf] 03/5/2020 12:11

I am super excited for next week. Just hope the BOD deliver after their bullishness. But should be OK.

[mknight] 03/5/2020 12:10

If its Monday alot of folks are going to miss out . Lets hope its Tuesday so i can add Monday .

[phattrader1] 03/5/2020 12:00

This board is a million times better than LSE - what is going on over there! Blimey.

NEWS IS COMING tomorrow imo - it’s just easier to sign the agreement over the weekend and inform all unsuccessful parties so they can’t buy shares or leak the news despite having signed NDA’s.

Low: NM will not sell Alpala alone due to the capital gains tax SOLG would have to pay. He’s made it clear - we go to production, or we get taken over in full.

50p will be seen at some point this week - one can dream for a £1.25 takeover but I’d accept 60-70p if done within 2 months.

[lowtrawler] 03/5/2020 11:56

I would like to see Alpala disposed at for 40p or more. Return 30p to shareholders and keep the rest to develop other sites. I reckon following each discovery, shareholders can make 15p or more trading the bounce and by repeating the Alpala sale model, get a further 30p later on. Do this a couple of times and it soon adds up.I also reckon there would be a fair amount of competition to get hold of Alpala making 40p a minimum price.

[lowtrawler] 03/5/2020 11:38

You can probably consider anything over 30p last year as being in the irrational exuberance phase. We have moved on and so I reckon fair value for Alpala is around 40p with the rest of SOLG at up to 10p.

[greenelf] 03/5/2020 11:20

So that was about 38p a year ago. Solg have moved on from then. So fair price 40-50p now. Minimum.

[mknight] 03/5/2020 11:01

Looks like funding news Tuesday the 5th or Wednesday the 6th .

Read L2 post on LSE . Company replied yo his email saying they informed the market on the 11th of March that it would be within 8 weeks so with NM speaking on Wednesday it would seem 5th or 6th ..

[dozyduck] 03/5/2020 10:41

I agree with that LT. I wrote a year ago (in a different guise) that I thought Solg had reached the value inherent in Alpala, and that investors were waiting for the next discovery before according any more value.
The logical conclusion from that, I said here recently, is that NM's strategy should be to sell off (or hive off into a separate company giving holders shares 'in specie') each discovery as it becomes viable, so protecting each developing mine from dilution to fund the next exploration phase. As it is NM is (having to ?) relying on 'hocking' part of Alpala's value to do it. (I retract my thought than the $150m can only fund work on Aplala. It might be part used for other exploration, but it would be at the expense of Alpala's value and would have to be agreed by whoever is putting up funds for the latter) And as I've said, if its a similar deal as Orion's for Fruta del Norte it will be stupendously expensive in the long run.

[lowtrawler] 03/5/2020 10:23

For each new discovery, as a contrarian investor, you can see a rush of money coming into SOLG and irrationally raising the price higher than it should go. Over time, the initial excitement disappears and the price falls back further than it should. Thus, if you are holding shares at the point of a discovery, you should sell shortly after aiming to buy back later. This is why you may wish to keep holding SOLG shares even after they no longer represent "good value".

[lowtrawler] 03/5/2020 09:59

I think it's very healthy that the forum has engaged in the serious discussion of fundamental values. I have 2 strings to my investment bow: value investing and contrarian investing. Mining shares are often completely unrelated to value and so while it is useful to understand the underlying value, it won't necessarily inform you what is going to happen to the share price.I have put together a range of fundamental values to current SOLG shareholders for Alpala. If I ignore all risks, assume average gold and copper prices 50% higher than the PEA and add 30% more recoverable reserves: The highest share price I can get is around 120p. Clearly it would be nuts for us to get anywhere close to that level but it doesn't mean it won't happen.The main potential for current shareholders is no longer Alpala, it is substantially built into the price already. Any substantial share price appreciation should now depend on new discoveries. I think SOLG are well placed to make at least 2 or 3 Alpala sized discoveries. Each discovery should add 20p - 50p to the share price. However, it looks unlikely that sufficient effort is going into these discoveries to allow an announcement this year.

[dozyduck] 02/5/2020 19:45

Funding is always based on 'the value of the project' in the sense that it wouldn't be forthcoming if the project isn't 'economic' - ie profitable enough to reassure lenders they'll get their money back, and equity investors that they'll make a profit on their shares. If those shares are liable to dilution to fund other exploration,investors may not be quite so sure of the latter.
And its not 'value' that counts anyway. Its the rate of return IRR that funders look for, not the NPV.
Debt funding is always at project level - ie it goes into the project 'separate' from Solg top company. But 'equity' (unless a 'farm-in' at the project level) usually has to come from the top company shareholders. That's why in Solg's case I don't think complete funding will be as easy as NM says.
And nothing in NM's phrase indicates what the 'value' is ! Whatever news there is, it won't say ALL funding is arranged.

[dozyduck] 02/5/2020 18:35

Important to remember is that Solg is different from previous large mine developers needing to raise funds (In fact I can't think of any !) on which I assume NM is basing his belief. Solg isn't purely one developing mine, but has the millstone round its neck of funding required for its other exploration. Investors according a 'value' per share related to Alpala will know that it will be diluted by whatever Solg raises for that. I think anyone believing NM will be disappointed.

[phattrader1] 02/5/2020 17:32

What NM did say at the talk was the market cap should be valued at 30% of NPV of Alpala and at the time it was only 10%. He also said it should be 40% once BFS is complete. So he thinks we should be 60p a Share right now and 80p a share in Q1 2021.

Also he said funding is based on the value of the project and seemed VERY confident of the whole $2.85bn “quicker than expected”.

The next news will confirm what has been agreed - or if things haven’t gone to plan - will be an update of current status.

Patience and this stock will rocket past 60p before June/July when some of those options expire 🤣

[mknight] 02/5/2020 16:45

I will check the webinar again and come back with the time and who said it . Its in my notes so it must have been said .

Ingo hoffmier ...20 mins 16 seconds

Also the more i listen to it the more i think their is alot more to come on the other expensive metals . It maybe the Labs have found a very large amount in the samples they recieved . Perhaps Solgold never did an analysis for these materials they never mentioned them before . Also NM was reminding his staff not to say too much .

If confirmed it could add a very large amount to the value ..