Solgold Share Discussion Threads

[mknight] 24/8/2020 14:37

Better still release an rns at 10.36 am and watch the panic to buy .

[arcadian] 24/8/2020 14:09

LOw

What I had in mind was that an RNS would be released at 7am and at 7.30am Nick could elaborate and give a little more substance/context.

[lowtrawler] 24/8/2020 12:54

Is there another block on trading today? Never seen such low volume and no trades of any size are going through.

[lowtrawler] 24/8/2020 12:52

Arcadian, all substantial news has to be released to the market first and so all you'll ever get from these events is more detail and colour.

[arcadian] 24/8/2020 12:50

POB

Thank you for looking after us. Let`s hope that this event has some long awaited substantial news.

[lowtrawler] 24/8/2020 11:56

Count, not quite, standstill ends on 15 October, not 13th.

[pob69] 24/8/2020 11:24

Another date for the diary - Red Cloud interview (part 3) with Nick Mather 9th September though registration not yet available SOLG $SOLG $SOLG.L $CGP #cascabel #ecuador.

Join CEO Nick Mather for a corporate update on SolGold and live Q&A session with shareholders.

[pob69] 24/8/2020 08:19

Solgold's original business model was to operate as a "prospect generator". This is a common approach so I tend to agree that any tax charge which would come with that territory is just a negotiating chip.

[lowtrawler] 24/8/2020 08:11

Noccer, I've often argued that the tax charge is a smokescreen and can be overcome. Their argument appears to be that a sale would generate a huge capital gain and associated tax charge which could not be offset elsewhere.

[mknight] 24/8/2020 06:49

Yes you are correct .

La Hueca should finish its first drill this week and start its second .

[the count of monte_cristo] 24/8/2020 04:24

Am I correct in thinking that BHP are released from the standstill agreement on the 13th October? Less than 2 months from now.

[noccer] 23/8/2020 23:13

Thanks geremso et al, and with BHP rotating to copper, and Warren Buffet rotating from banks to gold miners, and world governments printing money with abandon, maybe SOLG shareholders are increasingly in a good place.

I have never understood the nature of the tax problem occasionally referred to with SOLG selling part or all of their 85% ENSA holding to a major, as that would be a way to hand them both Alpala and the CGP issue, and SOLG could use the cash and maybe an NSR to fund future exploration and development. It would leave SOLG with all its other tenements to explore and develop. If a tax issue was so immense as to prevent that sort of thing, then maybe the government should look at whether the tax system is working in their best interest.

Maybe someone here can explain why the sale of SOLG holding in ENSA is faced with a tax problem, as I haven't spotted the explanation? Its already part SOLG part CGP, why can't a third party buy in?

[mknight] 23/8/2020 15:06

Some good posts this weekend

Thanks to Gersemi..Husbod and lowtrawler .

Keep them coming ..

Still think BHP will take the lot as they have the money and the will to buy a copper/gold tier 1 project which they are already invested in .

Lets hope it wont be hostile

[husbod] 23/8/2020 12:25

Absolutely no need to apologise - I just happened to see the BHP info as I am a shareholder in that company. Quite a few peeps probably didn't see it so it was a useful contribution. Keep posting.

[gersemi] 23/8/2020 12:12

Apologies. I will now refrain from bombarding the thread with articles. It's more about cementing my belief and confidence in the stock than it is about posting information that others may have already seen before.

Some interesting SOLG references from the earnings transcript from the Franco-Nev analyst presentation early Aug -

Evidently FN expect production to go ahead otherwise they would not have committed to a NSR agreement. One would assume Franco have been given inside info on how Mather intends to move forward with Cascabel with Franco using that info to enter into this NSR. I would say the NSR is evidence that funding for Alpala is pretty close and having BHP snarling to get its hands on Cascabel Franco wins whoever takes it to production -



-

Here they are:

''Paul Brink -- President, Chief Executive Officer and Director

Thank you. I'll be talking about recent business development activity and our future growth drivers. During Q2, we reached agreement on $100 million financing for SolGold, where we will receive a 1% NSR on oil production from Cascavel property in Ecuador. Cascavel is a large copper-gold porphyry system amenable to block caving, and we believe one of the best copper-gold development projects globally.

M&I Resources are 2.7 billion tonnes at 0.53% copper equivalent, very interesting to us that includes more than 21 million ounces of gold. The resource includes a high-grade core of more than 440 million tonnes at 1.4% copper equivalent. So, goal has the option until January of next year to increase the deal by 50% that would be a 1.5% royalty and $150 million financing. They also have the option to buy back half of the royalty for a period of time. We've retained an option to convert the NSR on all metals to a gold only royalty on an NPV neutral basis.

As COVID travel restrictions were in place when we agreed the transaction, on site due diligence was deferred. We've provided interim funding to allow SolGold to continue its activities until we can complete our due diligence. Credit for the transaction goes to Eaun Gray and our business development team, and they are available to take any questions later in the call.''

and more.......

''Carey MacRury -- Canaccord Genuity -- Analyst

Okay. And then maybe just on the SolGold transaction, just wondering what the schedule looks like just on the due diligence completion.

Eaun Harrison Gray -- Vice President of Business Development

Hi Carey, Eaun Gray here. Due diligence is ongoing, we hope to complete something in the near term, as we've previously messaged. Obviously, with COVID, these things are bit challenging but it's ongoing.''

[husbod] 23/8/2020 11:39

Yep saw that the other day. Can't be a much better target around than us for pure potential.Also always wondered why the big miners, particularly GLEN were acquiring coal assets in this day and age. Suppose someone has to supply the Chinese and that paragon of virtue the Germans who have shut their nuclear plants and partially replaced them with a massive coal fired power station using one of the most polluting types of coal on the planet. And then sucking up to the Russians for a supply of cheap gas.

[gersemi] 23/8/2020 11:25

BHP pivots from coal, gas to copper, nickel

Peter Ker: Resources reporter

Aug 18, 2020 – 6.58pm

BHP has revealed close to $US10 billion ($13.8 billion) worth of carbon intensive assets in four Australian states are not part of its long-term plans, as new chief Mike Henry continues his mission to reshape the company toward “future facing'' commodities like oil, copper and nickel.

Confirmation that several coal and petroleum assets are bound for sale or demerger.........

-

10bn US$ with some of that no doubt will be used to finance BHP's aggressive focus on pivoting even further towards copper projects. I believe SOLG's takeover is a fait accompli or failing that a massive offer for Cascabel.

BHP is also under pressure in Chile for excessive use of water

[husbod] 23/8/2020 11:21

If that's what we're doing Lowtrawler no wonder the share price is languishing. We should be exploiting the locals, damaging the environment and bribing the officials.The share price would double.Only joking ................. I think.

[lowtrawler] 23/8/2020 09:27

The most impressive thing about SOLG in Ecuador is not that they have Cascabel. From the start they have acted like a big player, invested in the people, environment, relationships and established a base of trust. This is what will allow them to rapidly expand and develop the other sites.

[gersemi] 22/8/2020 23:20

Cascabel, 'one of the largest discoveries ever made in the world '. That's some statement to make. No wonder BHP and NCM are sitting tight and waiting for the right time

hxxps://www.bnamericas.com/en/news/ecuador-backing-mining-industry-with-attractive-portfolio-for-2020-30

Tues, August 18, 2020

Ecuador is aiming to make the mining sector one of the central pillars of its economy and intends to attract foreign investment with a range of projects over the next decade.

"At the moment we have five projects on our radar that should become mines and one of them, which will go into production between 2025 and 2026, is one of the largest discoveries ever made in the world," said deputy mines minister Fernando Benalcázar in an interview with Radio América.

He was referring specifically to the Cascabel gold, copper and silver project, operated by Australian firm SolGold, which has another 74 concessions in Ecuador.

[gersemi] 22/8/2020 19:17

Cornerstone Resources (TSX-V: CGP) The Founding Partner of the World-Class Cascabel Copper-Gold Project
Posted on August 13, 2020 by Alex Deluce
13
Aug

Gold continues to showcase its strength in times of economic uncertainty. The precious metal has been on a relentless run these past few weeks, with spot gold trading as high as $2070 an ounce this past week.

Gold continues to rally as global central banks continue to print an abundance of money and monetize government debt. At the same time, fiscal spending on a global basis to support local economies is unprecedented as well. All this debt has many market participants preparing for extreme inflation in the years to come.

In fact, U.S yields continue to fall into deeper territory by the day, which clearly is a very bullish catalyst for gold moving forward:

In saying that, a company that looks to benefit with elevated gold prices is Cornerstone Capital Resources (TSX-V: CGP). Cornerstone is the founding partner of Cascabel, the only available Tier 1 copper-gold asset in the world not owned by a global, multi-national mining company.



Cornerstone owns a 15% carried interest in Cascabel and 7.6% of project operator SolGold (LSE/TSX: SOLG) or effectively 21.4% of the world-class Cascabel project. The Alpala deposit is the main target in the Cascabel concession, located on the northern section of the heavily endowed Andean Copper Belt, the entirety of which is renowned as the base for nearly half of the world’s copper production.



The project area hosts mineralization of Eocene age, the same age as numerous Tier 1 deposits along the Andean Copper Belt in Chile and Peru to the south.



Alpala has produced some of the most significant drill hole intercepts in porphyry copper-gold exploration history, as exemplified by Hole 12 (CSD-16-012) returning 1560m grading 0.59% copper and 0.54 g/t gold including, 1044m grading 0.74% copper and 0.54 g/t gold.



The 2019 Cascabel PEA showcased the world-class economics behind the project:

The company owns a 15% carried interest in Cascabel – resulting in a free ride until completion of a bankable feasibility study.

The PEA showcases the robust nature of the asset as when Casabel is eventually in production, in its first 25 years it will produce on an annual basis:

207,000 tons of copper
438,000 ounces of gold
1.4 million ounces of silver

The PEA was done with the assumed metal price of:

$3.30/lb copper
$1300/ounce gold
$16/ounce silver

Presently, copper is trading at about $2.85/lb. However, gold and silver are currently much higher than the assumed metal prices when the PEA was completed.

Spot gold is now near $1925 an ounce, and spot silver is at nearly $26 an ounce. This only improves the economics of the project as the NPV only increases, and the payback period is reduced.

The current share price reflects a 60% discount to the C$8.60/share price that the 3 major shareholders acquired their shares at. The present market capitalization of the company today is $116 million.

We recently caught up with Brooke Macdonald, Chief Executive Officer of Cornerstone, to talk about the company as well as plans for the remainder of the year.

Alex Deluce: Thanks Brooke for taking the time. I am excited to introduce the Gold Telegraph readers to the Cornerstone story. Most notably, the company is the founding partner of the world-class Cascabel copper and gold project, can you give readers and bit of a history of the company and how the company got involved with this world class asset?

Brooke Macdonald: Cornerstone has been involved in Ecuador since 2005. In early 2011 we acquired the rights to the 5,000 hectare Cascabel concession in an area of NW Ecuador that had tremendous geological potential but little systematic exploration.

Cornerstone was the operator of the project in the beginning stages right through to the discovery hole # 5 in February 2014 when we intersected over 1.3 kilometres grading > 1% copper equivalent. We handed over operatorship of the project to SolGold in September 2014 pursuant to an earn-in agreement.

As you know, we are a prospect generator following the joint venture model typically bringing projects to the drill-ready stage and then look for a funding partner to earn-in to the project by funding the drilling and “carrying” us to completion of a bankable feasibility study. As no majors were working in Ecuador back in 2011, we brought in SolGold Plc as a partner. Although SolGold is a junior, we had worked with their then CEO successfully on another project in central Ecuador and they were keen to become our partner. Ecuador has since become a more mining friendly jurisdiction attracting meaningful interest from the majors.

BHP and Newcrest each own 13.6% of SolGold. Franco-Nevada has conditionally agreed to provide feasibility study funding to SolGold in return for an NSR royalty on SolGold’s share of the project.

Alex Deluce: The PEA showcases the incredible scale and life of the Cascabel asset, with the company having a 21.4% interest in the project. What is the next step for the project? Is it the feasibility study?

Brooke Macdonald: The Alpala deposit at Cascabel hosts a world class resource of over 21 million ounces of gold, over 21 billion lbs. of copper, and over 92 million ounces of silver in the M&I resource category with almost two-thirds of that in the measured category.

The Alpala deposit PEA outlines a base case 55-year block cave operation with an after-tax NPV at an 8% discount rate of US$4.3 billion and an IRR of 25.9%, and initial capex of US$2.7 billion.

Cascabel is the only Tier 1 copper-gold asset in the world not owned by a major mining company. The Alpala deposit comprises less than half of the initial 13 or so porphyry targets on the property, which have not yet been drill-tested.

SolGold is currently working on a Pre-Feasibility Study scheduled for completion by the end of the third quarter this year. The next milestone after that will be the definitive Feasibility Study which SolGold has announced should be completed in the second half of 2021. Cornerstone’s 21.4% interest includes a 15% interest carried through to completion of the definitive feasibility study, which is repayable out of our share of project earnings at LIBOR+2%, plus a 7.6% shareholding in JV partner SolGold.

Alex Deluce: Cornerstone has significant insider ownership; can you talk about your equity structure alongside who are some of you key supporters?

Brooke Macdonald: We have 32.4 million basic shares outstanding or 35.8 million shares on a fully diluted in-the-money basis.

Our largest shareholders are Maxit Capital/Bob Sangha, the leading M&A advisor to the mining business on Toronto’s Bay Street, with nearly 20%; our Chairman Greg Chamandy, who is the co-founder of Gildan Activewear and its former Chairman & CEO and the former Executive Chairman of Richmont Mines, owns 10.8%; Rosseau Asset Management, a highly successful group of funds run by Warren Irwin, owns 10.5%; and Sprott/Global and clients have around 5%.

Cornerstone is currently trading at a significant discount to the C$8.60/CGP share that Cornerstone’s top shareholders acquired their shares at. BHP’s cost base of 33 pence/SOLG implies C$11/CGP share. Newcrest’s block purchase in December 2018 at 40 pence/SOLG implies C$13/CGP share.

We believe our 21.4% interest in Cascabel provides an attractive opportunity for a potential acquirer to secure a strategic position in the project superior to any other SolGold shareholder.

Alex Deluce: With gold at an all-time high and with the resource being so rich in gold, silver and copper the company obviously has extreme leverage to the prices of these elements with the material in the ground. On top of the Cascabel asset can you also talk about some of the company’s other assets?

Brooke Macdonald: We have a strategic exploration alliance (SEA) with Ecuador’s state mining company ENAMI and are earning into an 84% interest in 9 highly prospective concessions in the same general area of NW Ecuador as Cascabel. We are still at an early stage, but the the size and intensity of the anomalies and the outcropping mineralization are similar to those we identified at Cascabel back in 2012-2013 when Cascabel was at a similar stage of development. Cascabel totals around 5,000 hectares; the 3 concession blocks in the ENAMI – Cornerstone SEA (Espejo, Rio Magdalena and Playa Rica) total around 42,000 hectares, and none of the targets on the 9 concessions within the 3 blocks have ever been drilled.

The Espejo, Rio Magdalena, and Playa Rica blocks were identified and ranked by Cornerstone in 2015-2016 as highly prospective after an exhaustive analysis of public and private information available at the time, reserved by Cornerstone Ecuador S.A. (CESA) after the opening of the cadastral map and then transferred to ENAMI for inclusion in the SEA. We believe we have secured some of the best areas in this largely unexplored region of north west Ecuador.

We have 100% of the Bella Maria gold project that borders the NE corner of Lumina Gold’s Greater Cangrejos gold property, where they have announced an indicated resource of 10.4 m oz Au in the indicated category and 6.3 m oz. Au in the inferred category. Bella Maria has exceptionally high gold content in stream sediment and free gold panned samples over the entire property. Soil geochemistry has outlined a 3 km x 2 km gold – copper in-soil porphyry style anomaly in the center of the concession, and 7 mineralized prospects. The project is almost drill ready. It has an environmental registration for surface exploration granted in January 2020, that we will apply to amend to permit for drilling once final drill targets are identified.

We have an option to own 100% of the Caña Brava property that hosts epithermal gold-silver targets on top of shallow porphyry gold-copper style mineralization. This project is drill ready, it has an environmental registration for scout drilling, only the water permit and social license are pending, following receipt of which a Phase 1 drill program of 15 holes/6,000m is planned for early 2021 by our funding partner, Newcrest Mining, which is earning an interest in the project. Details of the arrangement can be found on our web site.

We also have an interest in the Bramaderos Au-Cu project in southern Ecuador. Sunstone Metals of Australia is project operator with an 87.5% interest, and is funding 100% of drilling on multiple targets. Cornerstone has a 12.5% interest carried by Sunstone through to the start of commercial production repayable at LIBOR+2% out of 90% of Cornerstone’s share of earnings or dividends from the Bramaderos project. A phase two drill program is about to start on the project.

And in Chile we have the Miocene gold project targeting epithermal gold-silver and porphyry gold-copper deposits along the interpreted northern extension of the Maricunga magmatic belt which hosts several world-class gold deposits. The Miocene claims were selected using a proprietary database and we feel Miocene offers tremendous potential for discovery. This project is also the subject of a farm-in arrangement with Newcrest, details of which can be found on our website.

It is anticipated that, subject to COVID-19, during the 2020-2021 austral summer Newcrest will initiate a Phase 1 diamond drill program at Miocene.

As you can see, we have more than enough other projects for a SpinCo when we sell our 21.4% interest in Cascabel.

Alex Deluce: For the remainder of the year, what types of things should investors look for when following Cornerstone? Will there be any work programs at the other assets?

Brooke Macdonald: We are looking to increase shareholder value through our initiative to requisition a shareholder meeting of SolGold to be held after October 27th to change the SolGold Board. We expect all sophisticated shareholders plus Newcrest and BHP will support a capable board put forward by Cornerstone at that time. We would then look to convince the new Board to launch a joint strategic review and sale process with Cornerstone to open up the data room to a wider universe of companies and get competitive tension to maximize value for shareholders. The sale process could be structured in such a way as to allow third parties to competitively bid given the concentrated ownership that would support a friendly deal and ensure success. BHP will be released from its standstill and shareholder support obligations with SolGold on October 19th and free to discuss strategic initiatives. They are likely interested in owning Cascabel given that so very few assets of this size are available in the world.

With copper prices moving up, and gold above $2,000 an ounce, we believe someone will make a move towards end of the year.

On the other projects, we expect further drilling results from Bramaderos, possibly the start of a drill program at Miocene in Chile, and possibly the start of a phase 1 drill program at the Espejo and/or Rio Magdalena blocks in our ENAMI strategic alliance in the 4th quarter, but all of this is subject to the COVID-19 pandemic allowing us to get back into the field, and to us securing a funding partner for the drilling at the ENAMI projects.

Alex Deluce: We would like to thank Mr. Macdonald for his time, we will be following up with him in about a month to provide another update.

The company trades on the Toronto Venture Exchange under the symbol CGP. The company’s present market capitalization is $121 million.

[gersemi] 22/8/2020 13:06

'This group, alongside the board, have big decisions to make in the coming years around exploration and M&A, especially given the new goals of expanding copper and nickel supply.'

-

August 18 2020
BHP steels itself for coal divestments

BHP’s (BHP) record iron ore production saw it float through the difficult second half of its financial year, with profits close to last year despite the pandemic.

BHP:LSE

BHP Group PLC
1mth
Today change
-0.37%
Price (GBP)
1,723.60

The world’s biggest miner confirmed its base metal and steelmaking focus for the future, committing to getting rid of its thermal coal and some metallurgical coal assets in Australia and Colombia. The coal division as a whole - including the “higher-quality” metallurgical product - saw an almost 80 per cent fall in underlying operating profit to $811m (£616m).

Chief executive Mike Henry, who has been in the job since January, said these would either be sold or spun off in a demerger, as they would be “unlikely to compete for capital within BHP”.

He made a firm commitment to metallurgical coal overall, however, saying demand would grow for the steelmaking ingredient.

The past 12 months have seen thermal coal prices hit multi-year lows and both New South Wales Energy Coal and the 33-per-cent-owned Cerrejón mine in Colombia fell to underlying operating losses.

The flipside to this shift is greater investment in copper and nickel, metals that are set to benefit from the decline of fossil fuels.

In the 2020 financial year, BHP saw free cash flow from continuing operations fall 19 per cent to $8.1bn, and the final dividend of 55c per share took the year’s total to 120c, 10 per cent down on 2019.

Iron ore was the standout commodity and division for BHP. It hit a record production of 248m tonnes (t), a 4 per cent increase on the year before.

The output increase and strong prices in the second half saw iron ore cash profits reach $14.6bn, a high not seen since 2012, a year when prices surpassed $140/t.

Iron ore guidance for 2021 is 244m-253mt, although BHP warned of prices coming down as Brazilian supply increases. This will not be an immediate negative for the iron ore division, however, with prices currently close to $120/t and maintenance work needed at BHP’s operations in the Pilbara.

BMO analyst Colin Hamilton said even without a guidance adjustment, iron ore supply was tight enough for this maintenance news to trigger a 4 per cent uptick on the futures market.

On top of getting rid of the thermal coal assets, Mr Henry announced a reshaped c-suite. Fellow chief executive aspirant Danny Malchuk and external affairs boss Geoff Healy are on their way out while Olympic Dam boss Laura Tyler has been promoted to chief technical officer. There is also a new finance chief on the way.

This group, alongside the board, have big decisions to make in the coming years around exploration and M&A, especially given the new goals of expanding copper and nickel supply.

But looming ahead is the Jansen final investment decision. This has been pushed back to 2021 because of Covid-19 delays to the shaft sinking at the Canadian potash project. Billions have already been sunk into it, and BHP has made positive noises about future fertiliser demand, but it is still a massive project with plenty of risk involved.

Consensus forecasts compiled by FactSet see adjusted earnings per share falling next year to $1.69, a 6 per cent drop on 2020.

IC View

BHP might struggle to get a good price for its coal assets, but this is a good call. This year’s performance shows their benefit is largely as a tax loss generator, as Mr Henry pointed out in the Financial Times. While the dividend is down this is still a positive year for shareholders, and with iron ore holding up there is plenty to like going forward. Buy.

[loganair] 22/8/2020 12:28

BHP's coal divestments likely worth $9.8b as BHP too slow out of the coal hole while investing further in 'future-facing' copper, nickel, potash.

According to the mining giant’s chief executive officer, creating and securing more options in these commodities will be a priority because this will protect and grow value over the long term.

“Decarbonization, electrification, diet, land use and population trends will all drive higher demand for copper, nickel and potash in the medium to longer term,” Mike Henry said.

[rougepierre] 21/8/2020 12:48

With an average of 20p...40p looks good for starters...