Solgold Share Discussion Threads

[lefrene] 15/7/2020 17:07

mam fach, it feels more like the CGP tyrant is trying to rush NM into the Guillotine!

[mam fach] 15/7/2020 16:58

Knives are out.
Backstabbing about to begin.

[lowtrawler] 15/7/2020 16:35

It's also worth noting that CGP will owe SOLG roughly 50m for the costs incurred up to feasibility. These costs can be paid from production but will dilute their share of Cascabel revenues.

[lowtrawler] 15/7/2020 16:18

Unless something has changed since January last year. CGP will need to fund at least 10% of the mine costs or they will be diluted below 10%. That funding needs to be paid up front and not from production. They either need a rich benefactor willing to give them 300m without security or they will lose their share of Cascabel.I suspect NM confused the ability of CGP to pay the pre feasibility costs from production.

[lefrene] 15/7/2020 16:11

It would appear to be in the interests of the other holders to see CGP wither on the vine?

[lowtrawler] 15/7/2020 16:00

The following is taken from the January 2019 proposed offer by SOLG. It makes clear that CGP must fund the mine build via cash calls or be diluted. If they are diluted below 10%, SOLG can buy them out for 3.5m. Under the current structure, following the completion of a feasibility study, Cornerstone's 'debt-carry' arrangements will conclude and thereafter it will be required to fund its pro rata share of development expenditures during the capital-intensive construction phase in the lead-up to commercial production. In such a context, in accordance with arrangements in place at the ENSA level, Cornerstone will be required to either finance the required cash calls or have its 15% ownership of ENSA diluted, giving Cornerstone shareholders even less economic exposure to the Cascabel Project.If Cornerstone elects to maintain its 15% ownership, SolGold believes that financing the required cash calls will present significant difficulties to Cornerstone. As noted above, Cornerstone's interest in the Cascabel Project does not carry any operational rights whatsoever that could form the basis of a strong value proposition to potential future Cornerstone investors. Additionally, its economic exposure to the Cascabel Project will be burdened by the debt-carry repayment requirements described above. Issuers with minority interests in major mineral projects, such as Cornerstone's in Cascabel, typically already trade at a discount to the implied asset value, but this would be compounded by the likely need to conduct an equity financing at a valuation that is significantly dilutive to existing Cornerstone shareholders. SolGold does not expect Cornerstone to be able to finance its cash call requirements through other traditional funding structures either, since Cornerstone is not permitted to sell or even to encumber its interest in Cascabel, either directly or through a pledge of its shares of ENSA. This makes debt financing, a royalty, metal stream or other similar structure a significant challenge for Cornerstone under current arrangements.As a result of such challenges, in SolGold's view, there is a high likelihood that Cornerstone's 15% interest would be significantly diluted during the construction phase. In the event Cornerstone's ownership of ENSA is diluted below 10%, in accordance with the arrangements in place at the ENSA level referred to above, SolGold has the right to convert all of Cornerstone's remaining ENSA shares into a 0.5% net smelter return royalty, which SolGold may then acquire for US$3.5 million. In SolGold's view, Cornerstone shareholders should not be comfortable with any risk that this outcome may materialize.

[lowtrawler] 15/7/2020 15:42

That contradicts our previous understanding of what CGP must do. If correct, there really is no reason for CGP to accept the bid.

[lefrene] 15/7/2020 15:40

CGP, if successful would just get screwed by the big boys. They won't let CGP off the hook for their contribution, and will simply drive them into having to accept a low ball bid. CGP should have talked nicely to Solg and come to some arrangement that lets them off their 15% contribution. Lets hope NM has a cooler head than the bloke at CGP.

[tibszol1] 15/7/2020 15:16

NM in answer to the question" do Cornerstone have to pay their share of Alpala construction up front" No, they can pay upfront if they wish, but can also choose to pay it from their share of the proceeds due to their share of ENSA. That fact will lessen the pressure that Solgold can bring to bare on Cornerstone shareholders to accept their takeover offer.

[lowtrawler] 15/7/2020 14:43

I think we all guessed that bid approaches had been made and dismissed. We can continue to guess this. CGP, roaring like a cornered lion and biting like a mouse.

[pob69] 15/7/2020 14:35

What was new? Solgold SOLG $SOLG $SOLG.L $CGP #cascabel #ecuador

Nick Mather on whether he would make the bid more favourable "...No!"

"...We expect our 20 new licence applications to be granted when the Cadastre reopens in Q4 2020"

Nick Mather suggested that the Ecuadorian Government would take an interest in any attempts to destabilise Solgold. He implied that the EGM call could be out of "vengeance".

Most telling line at the end something like "....I can't comment on any approach that we may or may not have received that didn't have to be announced..."

[rougepierre] 15/7/2020 14:34

The sting was in the tail...

"I can't comment on any approach that we may or may not have received that didn't have to be announced..." This may have been the most significant thing he said, because he didn't deny any approaches, implying that they may have had informal approaches...!

[oli12] 15/7/2020 13:32

Divide and Conquer. Cornerstone cannot bid for Solgold but it can try to achieve the same outcome by attempting to remove the BoD, they appear to have very good advisors for such a small company, maybe they are being helped a little behind the scenes.

[1amulet] 15/7/2020 13:31

50M in the bank and more board appointments to be announced in due course.

[zcaprd7] 15/7/2020 13:24

I presume they just want to get the bid upped?

[pob69] 15/7/2020 13:20

Nick Mather speaking with Redcloud

You can download the presentation from the webinar site. The slides all look familiar though Alpala isn't mentioned at the front end of the ppt and it makes no obvious reference to the rejection or EGM call.

Solgold SOLG $SOLG $SOLG.L $CGP #cascabel #ecuador

[lowtrawler] 15/7/2020 13:19

I wouldn't make any assumptions about CGP having support. This is a desperate play which may also find support from other major shareholders if it suits their interests.In the case of BHP. I believe they remain supportive of SOLG but may see an opportunity to ease any bid plans they have. Newcrest would likely support the resolution to gain more control over SOLG. Neither BHP not Newcrest are likely to treat CGP any better than the current SOLG board and so it is purely a vindictive act from CGP as it is unlikely to further their interests.

[oli12] 15/7/2020 13:18

As I hypothesized this morning IF Newcrest, BHP & Cornerstone come together.... NM is in trouble. Let’s see if that’s the case.

[1amulet] 15/7/2020 13:11

Slight delay to the start of The Webinar....no doubt NM is consulting his legal people on what he's allowed to divulge!

[goldrush] 15/7/2020 13:10

pob69

It is logical to assume that CGP have bagged them and as BHP I am sure can freely vote on general issues.... As you say ....Gloves are off !!

[lowtrawler] 15/7/2020 12:55

There are games to be played. I believe CGP are highlighting to BHP, Newcrest and BlackRock that they have the means to pass the resolution. I don't see BlackRock doing anything for CGP but if BHP desired to launch a bid, they may want to remove the current board and could potentially persuade BlackRock to support them.Ultimately, BHP hold the keys.

[pob69] 15/7/2020 12:38

Also in relation to major shareholder including BHP what about Blackrock who own 5.24%

I am intruiged on the statement "Based on public disclosures made in accordance with Rule 5 of the DTR, there are only four independent shareholders (listed in the table below) that have a shareholding in excess of 3% in SolGold and, on a combined basis, these shareholders hold a stake in SolGold in excess of 40%. If the other large independent shareholders of SolGold have a similar desire for change and wish to change the board, the change could almost certainly be assured"

Has Cornerstone bagged them?

[lowtrawler] 15/7/2020 12:34

CGP only have 2 hopes for avoiding the takeover: Get the SOLG board to vary the terms of their ENSA involvement so that they don't need to fund mine construction up front; a bid for SOLG.This action is their only hope to achieve the first outcome. It is possible they will get support from Newcrest but the action will fail. It is a real sign of desperation.

[lefrene] 15/7/2020 12:15

I presume this has been anticipated by NM, I guess NM is going to find out who his friends are? CGP taking a risk for the sake of a hissy fit, I believe Solg is their only meaningful asset. Vanity, all is vanity.

[pob69] 15/7/2020 12:13

One would assume that Nick Mather, in his risk planning, will have prepared a response to both this previously signposted actiono (by Warren Irwin for one) and Cornerstone's formal rejection of the offer.

Could be due "imminently" or not...