Solgold Share Discussion Threads

[dartboard1] 30/9/2020 22:27

On the royalty, let's face it... SOLg probably won't be taking this to production.. so if the idea is to sell the first project, then I vote for the royalty

[swanvesta] 30/9/2020 22:17

That's a good year though. If profit is $5, $1 is 20% of it. And if the royalty is $15 they take 300%! leaving the company with a chunky loss. Profits come after operating costs, capex amortization, G&A, etc. The royalty streamers make hay with equity in the good times, but leave equity to handle all the downside in the bad times.

[dozyduck] 30/9/2020 22:04

Mcn etc. The royalty is paid from net profit after all costs. ie ignorng initial capex, Solg extracts $100 worth of gold and copper, but has had to incur $50 to do so, leaving it with $50 profit, out of which it then has to pay the $1 royalty (which might be tax deductible - so would cost a net 75cents) In other words the royalty has cost it 1.5% of profit rather than 1%

[swanvesta] 30/9/2020 21:57

Well, DD's rough calculation was that FNV's 1% royalty effectively dilutes us 3.2%. This is better than an equity raise of $100m which at this point would dilute us 20%+. But a 15% royalty would mean a massive dilution, with equity being landed with 100% of future risk. It's not an attractive investment proposition.

Having said that, if they can get 70/30 debt/equity they only need $750m or so. And by the time DFS comes out the royalty terms might be a lot better.

[dozyduck] 30/9/2020 21:51

Thanks for pointing that out greenelfe.
However those improved recoveries are measuring how much gold is chemically recovered from the gold and copper ores that are mined and sent to the mills. They are not the same as the % of mineral ores recovered from the measured 'resources', which is what my 'snippet' was referring to. But they will of course improve that later chemical part of the overall recovery process. The figures you should adjust for those improved chemical recoveries are the ones in the original PEA for production volume. ie 7.9 mt copper increases by 3.8%, and 12.4 Moz gold increases by 21.6%. Therefore the overall lifetime revenue (at present prices) increases from $52bn for copper to $54bn, and from $22.4bn for gold to $27.2bn. Obviously however the overall 9% increase in revenue (less the FNV royalty, other royalties totalling 5.1%, and taxes at 25%) will increase the net profit after other costs which remain the same, by 6.3% (as also the lifetime profit) Assuming capex remains the same at $2.7bn, the NPV will increase from $4.5bn to $4.93bn

[mknight] 30/9/2020 21:43

Correct . But how much would it cost solgold ?

[swanvesta] 30/9/2020 21:41

Indeed, but what FNV are buying is a % of revenue, not a % of project value. CGP (and SOLG) have a % of project value, which is what you have left over from revenue after you've paid $2.7bn capex and ongoing operating costs.

[mknight] 30/9/2020 21:31

They paid 100 million for 1% so 15 % would be 1.5 billion .

[swanvesta] 30/9/2020 21:28

The 1% royalty valued Alpala at around $3bn not $10bn!

[swanvesta] 30/9/2020 21:28

The point being there's a huge difference between a royalty (which is a proportion of revenue, with no costs to deduct or contribute up front) and a working interest (which has all those costs involved.)

[mknight] 30/9/2020 21:27

Why not they just paid it for 1% .

[swanvesta] 30/9/2020 21:24

OK - I just edited my post to add "FNV wouldn't be interested in 15% of the project - they're a royalty streamer. And clearly it's not worth $1.5bn to anyone at this point."

[mknight] 30/9/2020 21:21

Swanvesta yes i did and all opinions welcome .

[swanvesta] 30/9/2020 21:20

mknight, oh gosh, did you not read the earlier posts on this board? First off, FNV wouldn't be interested in 15% of the project - they're a royalty streamer. And clearly it's not worth $1.5bn to anyone at this point.

[bogotatrader] 30/9/2020 21:03

In Gold We Trust - chartbook - SOLG are one of the premium sponsors -

[mknight] 30/9/2020 20:20

DD if the cgp deal goes through how would you feel about using the extra 15%
To raise 1.5 billion with Franco .?

[greenelf] 30/9/2020 20:17

28/10/19https://www.accesswire.com/564369/SolGold-PLC-Announces-Alpala-Update--Recovery-ImprovementsThe current metallurgical test programme has expanded on that conducted during the PEA and has produced substantial improvements in copper, gold and silver recovery and in copper concentrate grade. These results are supported by both locked cycle and leach diagnostic tests.These results include:An estimated 3.8% increase in copper recovery to achieve a life of mine average of 93.4% recovery An estimated 21.6% increase in gold recovery to achieve a life of mine average of 87.2% recovery An estimated 28.3% increase in silver recovery to achieve a life of mine average of 87.6% recovery An estimated 2.7% Cu increase in concentrate grade to achieve a life of mine average of 28.7% Cu, equating to a projected 9% decrease is transport and smelting charges per tonne of concentrate produced. Ongoing large-scale tests will also evaluate CAPEX and OPEX changes to update economics_----_-------_---------Then on 29/04/20Highlights of the Phase 2 metallurgical test-work:· Life of mine increase in gold recovery by 7% compared to results of the Preliminary Economic Assessment ("PEA") filed on 19 November 2019https://www.investegate.co.uk/solgold-plc--solg-/rns/alpala-update---phase-2-metallurgical-report/202004290700052405L/

[dozyduck] 30/9/2020 19:51

LT - to add to my snippet

Copper resource (M&I) is 9.9 mt. PEA Recovery 7.9 mt =80.2% (over 55 yrs)
Gold resource (M&I) is 21.7 Moz PEA Recovery 12.4Moz = 57 % (over 55yrs)

More recent resource update said more gold (can't remember how much) in the core porphyry - but don't know how much recovered and when . But it won't make much difference to the revenue split which (at current prices on the original PEA) I make is 69% copper 30% gold 1% silver. But maybe a bit more gold in first 15 yrs - would have to delve deep into the PEA to find out.

[dozyduck] 30/9/2020 19:51

LT - to add to my snipp

[mam fach] 30/9/2020 19:40

Many thanks Pob69 for link.
Did I hear right PFS for Alpala due in days?

[mirabeau] 30/9/2020 19:12

Those end of day price spikes are usually a decent omen for news logged or 'rumour heard'

[sithuk] 30/9/2020 17:54

Sell the rumour, buy the news

[wapping67] 30/9/2020 17:39

Pob ...Many thanks for the link
In my opinion one of he reasons why the market has been unwilling to attach a higher valuation to Solgold has been the Sirius Minerals financing & dilution disaster. A painful lesson was learnt by many and AAL secured a cheap quality mining asset.Clearly NM has paid great attention to these concerns and the video provides some compelling reassurance to those shareholders(including myself) who have feared a similar fate. The FNV deal is a sensible arrangement that not only provides short term funding certainty but essentially provides the third serious level of corporate due diligence. We may see the stock trading higher soon

[dozyduck] 30/9/2020 17:24

No McKn Having reduced my exposure last year I built up again a few months ago. I see where you're comimg from. But it will take a long time to find and prove up three more Alpalas ! Don't forget it will have taken $300m to get Alpala to PFS. Where will Solg get $900m from for three others ?

[alwaysevolving] 30/9/2020 17:03

Good call this morning on finishing above 27p today Mknight.

I said myself a few days ago that the chart looked like a reversal to the upside was a good possibility.

Let’s hope for good news imminently.