Solgold Share Discussion Threads

[lowtrawler] 21/5/2020 11:06

If I am correct about us being re-rated on announcement of the mezzanine finance and the drilling programme, what does that mean for timing?

The mezzanine finance will need to be in place at the point the bridging loan is repaid. This will happen when FNV have completed due diligence. With a site visit shortly after 1 June, it is likely to be mid June to mid July when the final FNV deal is struck.

This means that a re-rating will occur in the next 4 - 8 weeks.

I know a lot of people have queried what information the Board are party to which prevents them from buying. The mezzanine finance is 1 thing which would act as a constraint. If this is the only constraint, the Director's may buy shortly after announcement.

[goldrush] 21/5/2020 10:55

rougepierre

Thanks for your well articulated post on takeover possibilities.

I agree it is very logical and likely that someone will make an approach and there is some big beasts out there.

I think we are well set and I too topped up my holdings.

Let's see how we go over the next few months.

[rougepierre] 21/5/2020 10:45

MMs bidding 26.55 for 50,000...

[rougepierre] 21/5/2020 10:42

Meanwhile...last day for acceptances on DGR's Rights Issue...

And the price has recovered to ASD7 since the announcement (rights at $3.70)...

I've taken up all my rights and applied for another 200%...allocations next Tuesday and they haven't deferred the closing date, which means its been fully allocated at the very least...

NM's retirement project...getting more active...IRR did a placing as well...maybe he's using Ingo's expertise on a part time basis...

[lowtrawler] 21/5/2020 10:33

Phat, I've never been away. I try to be realistic based on the information in front of me.

[phattrader1] 21/5/2020 10:30

Lowtrawler is now a Bigballer.
From harsh critic to believer.
From share issue imminent to convertibles.
From Doom monger to Rocketship owner.

Welcome back.

[lowtrawler] 21/5/2020 10:27

Incidentally, I have doubled my investment as I believe we are now in a much less risky position and there is a clear way forward on all fronts.

[lowtrawler] 21/5/2020 10:19

Rp, we don't need to concern ourselves with takeovers. We can't influence whether we get an offer or not. The key is that the company can carry on doing it's thing and the price will almost certainly move in an upward trajectory. Clearly, a takeover is potentially a way for us to get a quicker return but if it happens, it happens.

[rougepierre] 21/5/2020 10:04

I think the radio silence of the 'doomsayers' says it all Lowtrawler...

Right on the money as usual...

In fact if I was a prospective bidder, the calculator and the phone would be melting right now...any further good news on funding and any later news on the quality and scale of resource at Blanca, Hueva, Porvenir or Rio Amarillo and the takeout price will surge and the competition from bidders accordingly...

And then there's the kickstarting global economy and the positive impact on cyclicals...

Surely its no secret that copper is following oil in a sharp recovery...?

I just can't see how NM can keep this independent now...

[goldrush] 21/5/2020 09:33

Lowtrawler

Thanks for your great efforts.

This is exactly what I read into the video call that they had enough to get started on a bit of other drilling. Other financing will follow.

Obviously looks like FNV are priming to offer streaming for new upcoming proved targets.

Looks like we are in a good place and I agree with your overall projections.

Once again many thanks from all on this BB.

g

[lowtrawler] 21/5/2020 09:19

Now my personal assessment on the current status of SOLG and it's shareprice (this is my opinion piece).

1. Alpala is fully funded to BFS and has early visibility of available financing for two-thirds of its eventual cost to build. There is a roadmap on how to get there and we can be fairly confident Alpala will happen. My conservative assessment on value to current SOLG shareholders for Alpala is around 80p on a completely risk and uncertainty free basis. Personally, I make a 50% reduction for the ongoing risks and uncertainty which means I currently value Alpala at 40p.
2. We now have an indication that our other sites will be financed through convertibles of some description and that we can get moving on the first one. There is a high level of confidence that some of our priority sites are at least as large as Alpala and so we can expect a stream of positive announcements later this year when preliminary drill results are released. We know that the share price over-reacts to this type of news and so there will be both trading opportunities and a higher share price as a result of these announcements.

As I see it, investing at the current share price is as close to risk free as you can get from an explorer because it is backed by just 1 discovery, Alpala, which is already worth more than the existing share price. As more discoveries are announced, the price will rise far beyond where we currently are. As Alpala advances towards production, the risks and uncertainty will reduce and so more of the 80p potential should become reflected in the price.

Once the mezzanine financing is announced and we are seen to be drilling the other sites, I would expect the shares to be re-rated. I won't give any stratospheric predictions but so long as the price is 40p or below, I believe it represents a real bargain. Roll forward 12 months, if we have made 2 Alpala sized discoveries and have prospects for another 2 or 3, we could easily be into 3 figures.

[lowtrawler] 21/5/2020 08:53

My interpretation of the information received from Ingo is as follows:

1. We have sufficient short-term financing to drill 1 site (I believe they said Porvenir had the drills setup ready to go and so I assume this is the site?)
2. Even though the streaming deal with FNV doesn't have provision for funds to be used outside Alpala, they will not quibble over any of the bridging loan which might already have been spent in that way.
3. Mezzanine financing arrangements will be entered into for the longer term funding of drilling the other sites (for those that don't know, this is debt financing that converts into equity). They have offers on the table and advisers are assisting in putting this together.
4. The FNV deal should be finalised shortly after 1 June when the airport re-opens.

[lefrene] 21/5/2020 08:36

Thank you lowtrawler. Lets get those drills turning on the prime sites.

[lowtrawler] 21/5/2020 08:35

Another quick response from Ingo. I'll let you interpret it."The loan is an advance and what is spent is sunk. Franco are in short a very good partner to have and understand Ecuador very very well. All an investment into potential future deals with us, I believe. They know there is more to come."

[mknight] 21/5/2020 08:19

Thanks lowtrawler .

[arcadian] 21/5/2020 07:58

Thank you for sharing.

[lowtrawler] 21/5/2020 07:48

I have received a surprisingly quick response from Ingo which provides an answer. I will pick out the salient points below:1. Streamers (or royalty companies) usually restrict use to the licence area of the royalty. FNV advanced us a loan of USD15mm, that includes a provision that allows us to spend on other licences. 2. It would be sufficient for a drill campaign at one of the targets.3. We had money in the bank when we did the deal, not to forget.4. The airport in Quito is opening for commercial flights from 1 June. Once the site visit is done, the rest of the money will come.5. We received multiple other funding offers, not all where (sic) for royalty and streams. These offers, especially well priced mezzanine investment, are still available to us and can sit alongside a royalty. We are advancing them with our advisors. So, as I speculated 2 days ago, it is the bridging loan which can be used to drill the other sites. The response doesn't really cover what happens when the rest of the funding comes and the bridging loan is repaid but indicates they are in discussions on other mezzanine investment. I have passed this additional question back to him.

[lowtrawler] 21/5/2020 00:27

I've posed the question to Ingo. I will let everyone know if I hear back. I suspect this question might be a little more sensitive to answer.

[mknight] 20/5/2020 17:54

Lowtrawler

Drop him a line , he answered you last time so i am sure he will again .

[lefrene] 20/5/2020 17:25

It's obvious they need to drill to expand the estate, thus no doubt a 'ways and means' committee will find the necessary to do it.

[goldrush] 20/5/2020 17:20

Lowtrawler

Sorry I missed that yesterday.The question was pretty clear and if your interpretation is right it is pretty disingenuous,

Ingo stated up front how he welcomes the dialogue with shareholders and how important it was. Why don't we go back to him and put him on the spot.

g

[yufff] 20/5/2020 15:58

Nas_Daq

Too much now.

[lowtrawler] 20/5/2020 15:49

goldrush. We discussed that response yesterday. It was somewhat rambling on the webinar beginning with statements about how it's an ongoing need and not a single hit. Ingo states that the carve-out relates to "local exploration" without saying what that actually means. The Franco RNS was very clear that the funds raised can only be used for Alpala and so "local exploration" can only mean developing the Alpala resource further. I referred to the response as disingenuous yesterday.