Solgold Share Discussion Threads

[lowtrawler] 29/9/2020 13:30

LF, I honestly don't believe Nick will sell Alpala as a standalone site. He wants to be the trusted mining partner in Ecuador and selling our first find would destroy trust. CGP need to succeed at the requisitioned meeting if that is what you want.

[lowtrawler] 29/9/2020 13:25

If we really want to put rose tinted spectacles on, somebody might be willing to pay full NPV for Alpala hoping that at least one other site is as big. Thus, they might pay £4bn. However, nobody is going to pay that outside a competitive bidding war and even then it's a stretch.

[lefrene] 29/9/2020 13:22

It was a bit tongue in cheek, but it's likely the resources are there given NM's talent for picking sites. We need to sell Alpala for above $2 billion, and use that to drill and jorc other sites asap. So 100p per share for Alpala would be acceptable. Ho hum, only a couple of weeks until BHP comes out of purdah, then we might see something begin to happen?

[lowtrawler] 29/9/2020 13:14

LF, lovely thought but the chances of us hitting the jackpot at all 13 sites are miniscule. The metal valuations you applied are for jorc compliant reserves and we don't even know if we have reserves at the other sites.Most experts agree that our non Alpala sites are currently built into the share price at around 3p. I believe that is too low but it would be difficult to argue for more than 10p.

[gisjob2] 29/9/2020 13:14

I'd love that to be correct but not a chance of anywhere near that. None of the other areas have enough / any resource work done. I'd take around £1+ if it's within this financial year.

[lefrene] 29/9/2020 12:41

If Alpala is said to be worth $54 billion over it's working life, and there are thought to be 13 other sites with the same or bigger capacity we get 13 x 54 that's a gross $702 billion and that's ignoring the other 60 sites. Metal in the ground is apparently valued at between 2% and 5% depending on location, infrastructure etc, thus if we take a lowly 2.5%, we get $17.5 billion, compared to a current $530 million.

One might argue that somebody wanting to buy Solg quick and cheap should pay at least half of that $17.5 billion mark. Say $9 billion or 17 times the current valuation. 442p per share, and they'd still have the bargain of the 21st century.

[lowtrawler] 29/9/2020 12:17

Already locked and loaded, so no top-ups for me. When this eventually gets moving, depending on cause, it could skip right past the high 20's and 30's into the 40's.

[mam fach] 29/9/2020 11:57

You know which one, but i've forgotten it's name.

[jarega85] 29/9/2020 11:56

Right, who is topping up when this hits 28p and above?

[fsawatcher] 29/9/2020 07:24

i gonna take wild wild guess and say solg gonna be bought by aussie company

ha ha hahahahaa

which one

burger bun

ill have some gerkins with my cheese

[mknight] 28/9/2020 21:04

So back to 26p .

Going to breakout soon . Someone picking up the sales . As soon as the weak are out of the way i am sure we will explode to the upside .

All imo etc .

[lowtrawler] 28/9/2020 17:25

AE, the volume is too low for the chart to be a reliable indicator. We need more trading interest or it's just going to drift between 24-27.

[pecker1] 28/9/2020 17:23

Another potential contestant for a share of the spoils:

[alwaysevolving] 28/9/2020 16:44

These low test wicks on the chart the last couple of days are looking quite positive for a move up IMHO?

[gisjob2] 28/9/2020 12:22

Surely as they've suggested Cornerstone will hold out for a decent price for their share of the project, this will allow a read across to SOLG's share and show at the later date whether BHP or Newcrest are ripping off SOLG. Plus if Cornerstone's share is bought at a higher level SOLG will rise before any bid anyway regardless of what that maybe.

So I cannot see Cornerstone getting a fair price and SOLG being taken to the cleaners whatever Cornerstone bosses might suggest.

[lowtrawler] 28/9/2020 12:14

It's just the usual lack of volume. The MMs are attempting to generate interest by moving the price around but buyers aren't jumping in, just as sellers weren't participating at 27p.It appears we have a broad equilibrium at 24p - 27p. I expected increased volume and volatility heading into October but nothing as yet.

[mirabeau] 28/9/2020 11:54

thanks to John Cornford at the Master Investor -






John’s Mining Journal: Solgold – the next two weeks should be interesting
By John Cornford 28 September 2020
6 mins. to read


After a long hiatus for its shares, the crunch-point for Solgold is rapidly approaching, writes veteran mining analyst John Cornford.

Since my last comment, two weeks ago, Wheaton Precious Metals (NYSE:WPM) has announced that it will list in London, to extend its reach to investors beyond those in North America who know it well. So, although I suggested taking some recent profits, the new investors it will attract here might help buoy the shares, if only because WPM will be the only representative in London of the most profitable and relatively safe sector of mining as it is possible to imagine. And if its expansion from concentrating on silver into gold continues, it will not only be one of the most attractive gold related shares on the London market, but the cash it is probably intending to raise will find its way to funding early stage gold miners over here and so boost the whole London gold market. That doesn’t change my suggestion to take at least some of the available profit, to await a possible new fund-raising and the addition of WPM to UK brokers’ buy lists.

After a long hiatus for its shares, crunch-point for Solgold (LON:SOLG, TSE:SOLG) is rapidly approaching, when at least some of the pinch-points snagging what investors think is its progress to a proper valuation ought to be cleared. But as to what happens then, nobody seems willing to speculate, because the complexities surrounding the company have assumed the proportions of mind-bending Byzantine politics.

For context, Solgold’s 85%-owned Alpala copper-gold project in Ecuador is rated a potential ‘tier one’ and has a Net Present Value around $4.5bn compared with Solg’s £533m market value. That is only 2/3rds the value the market is according to Greatland Gold (LON:GGP), which looks like ending up with only 25% of the promising looking Havieron prospect whose farm-in drilling by Newcrest has been spurring Greatland’s shares, but which hasn’t yet published any measure of its resource in the ground.


Those figures of course give far from a true picture, because getting Havieron into production looks like being quicker and cheaper than Alpala. But GGP’s shares at over 20p have already well exceeded at least one research house’s target, so chasing them before the expected resource statement this quarter might not be a good idea.

Agaist that, Alpala is claimed to be the only tier one copper discovery this decade, which is why industry majors Newcrest and BHP (both of whom have stated their aims to expand their copper interests) have acquired stakes now totalling some 27%.

Whether or not one of them might bid for Solgold, or for just its Alpala project, is the short-term focus of attention. But the over-riding question is how and when and at what cost to its shareholders Alpala can be developed. All other snags are subsidiary to that.

First unsnagging of these will be of BHP’s freedom to add to its 13.6% shareholding after October 15th, but a second, related one, will have to wait for an extraordinary general meeting of SOLG shareholders which another, 7.6%, shareholder, Toronto listed Cornerstone Capital Resources (TSX:CGP), is threatening to call.

CGP wants to try to replace Solgold’s Board, whom they accuse of diminishing Alpala’s value (of which CGP has a 15% direct share and – along with its SOLG holding – has an effective 21.4%) through the streaming deal with Franco Nevada that Solgold recently completed.

This has given SOLG $100m with which to progress Alpala to a Definitive Feasibility Study, which is necessary to raise the full $2.7bn Alpala build cost (4 times more than SOLG’s current market value).

But its price, which CGP (and Newcrest) complain of, is the handing over to FNV for all time, of 1% of Alpala’s revenue. The true cost of that to Alpala’s shareholders, assuming profits at 50% of revenue, will actually be nearly 2.5% of its NPV.

Meanwhile, SOLG is working to head off criticism on a number of fronts, and has struck back by re-stating its all-share bid for the whole of Cornerstone (current market cap almost one quarter that of Solgold) which, if accepted before the October 14th deadline, would solve a lot of the Byzantine set of inter-related issues now ensnaring Solgold. Except that Cornerstone has roundly rejected the bid, and no one seems to believe it can succeed. That the deadline is the same as when BHP is free to add to its stake in SOLG is another factor for observers to ponder.


Solgold’s second response is the promise to publish soon an update to the Preliminary Economic Analysis for Alpala which produced the $4.5bn NPV that everyone has been working to. Solgold is hinting that it will show a much better result, although that might stem from assuming higher gold and copper prices than before, and using a lower discount rate.

But unless that update shows more metal in the ground (unlikely to be significant) and a much cheaper build cost, a re-stated NPV won’t impress either BHP, Newcrest, or Cornerstone, who will be going by their own assumptions and estimates of the solid underlying reality of Alpala, namely its detailed production profile year by year and the true costs at every stage. This shows that practically all of Alpala’s ‘value’ (at current gold and copper prices) is actually generated in the first 15 years of its life, making it more valuable than would appear from the NPV alone.

Solgold’s third response has been to start drilling (after Covid-related delays) at two of its other most promising targets in Ecuador, with the obvious hope that early results will convince all those milling around it that it is even more valuable than its Alpala stake alone, and so influence whatever strategy potential bidders might be considering.

Weighing up the alternatives stemming from these facts is further complicated by Cornerstone’s urging BHP and Newcrest to throw in their combined holdings with the former to force some sort of resolution at its still-to-be requisitioned EGM. If investor BlackRock threw in its 5.2%, they could together muster a credible 40% of the votes.

My own estimate is that a bid for Alpala alone is unlikely, and in any case would not be far above its value to a buyer, who has to add its bid cost to Alpala’s $2.7b build cost in order to gain Alpla’s $7.2bn or so gross NPV. That would, in my view, place a $1.5bn ceiling on an Alpala only bid, worth less than that to SOLG shareholders after the Ecuadorian capital gains tax that would be payable. In other words, worth perhaps no more than 50p per Solgold share.

Even so, my view a year ago was that the best long-term strategy for Solgold’s shareholders would be for it to sell off its projects once at Alpala’s stage, in order to fund exploration of its follow-on prospects.


That strategy is opposed by Nick Mather, Solgold’s guiding boss, who wants to secure the whole of Alpala’s value, even though it would take much longer. But his hand might be forced if a bid (concocted between those 40% holders and others) is made for the whole of Solgold, at a price perhaps 50% above its recent levels and before there is any evidence of the potential of its other Ecuadorian concessions.

Although that would be a long-term bargain for buyers, Solgold looks vulnerable to them. So the next two weeks could get interesting.

To put the situation into perspective for investors new to miners, the current market value of Aplala’s most recently reported resource ‘in the ground’ is just over $100bn.

But last year’s Preliminary Economic Analysis reports its value as an NPV which is only a fraction of that, because it will take 55 years to mine only about 60% of the resource, and will need at least $2.7bn up-front to build.

And to judge whether a strategy to explore and sell off projects once proven is worthwhile, consider that Solgold has spent a total of $178m on Alpala so far, and will spend perhaps another $100m to get to a bankable feasibility study, when it might (if not stymied beforehand) be able to sell Alpala for up to $2bn.

END

[greenelf] 28/9/2020 11:37

Mr Markwt does not know his arzz from his elbow.

[mknight] 27/9/2020 19:24

Phattrader1

If we get great drilling results with photos and data as promised then it will imo give us more of an unlift than the PFS .

We could with the right news move to 39p a 50% increase within a week of the news . It would justify NM,s continued comments that we are the next BHP of Ecuador which up to now have been taken as more hot air than reality.

[phattrader1] 27/9/2020 18:44

MKnight - I hope so. But there is a big reason we are at 26p and not 76p by now and it’s something related to BHP. I’m Not sure what to expect. Hoping for the best though. Maybe this week can be a big turnaround for us...

[mknight] 27/9/2020 16:51

NM has options at 60p so it wont be less.

He also knows the value of La Hueca ,Porvenir and blanca y nieves as well as a good idea of Río Amarillio .

So i dont think he can be bought for 100 million .

[blair83635] 27/9/2020 15:49

Talk is cheap and so is 55p

[lowtrawler] 27/9/2020 15:02

It's obviously Sunday. Nonsense and ridicule.