Solgold Share Discussion Threads

[mad foetus] 16/10/2018 16:29

Bought a few back at a smidge under 40p, which, given what we know, seems a bargain

[pob69] 16/10/2018 16:29

SolGold featured in Hannam & Partners latest report 'BHP further endorses Cascabel with £45m investment in SolGold; we increase PT to 80p’ $SOLG.L $SOLG #Ecuador

[pob69] 16/10/2018 16:16

Positive coverage by broker Liberum $SOLG $SOLG.L #ecuador $CGP

"Provisions ensure BHP doesn't go hostile for the next two years, enabling the company to test some if not all of its 7 high-priority porphyry targets within the license before a posible takeover..."

[7rademark] 16/10/2018 16:06

Def a buy order being worked here, price probably agreed first thing.

[zeusfurla] 16/10/2018 15:54

Just listened to Anna's presentation at the 121 Mining Conference this afternoon and picked up the following points which may be of interest:

- $2.8bn initial estimated capex cost for Cascabel, around 1/2 the cost of big Chilean mines (cflather hope answers your question)
- announced a 'Go for Gold' strategy targetting Blanca and Rio Armarillo (2 very high gold projects) which are expected to be quicker to develop and easier to finance. Awaiting final environmental permits then 'the day we get these we'll start drilling' says Anna
- looking to double MRE and said in same sentence as 'have tripled amount of drilling' - draw your own conclusions
- have identified 10 more priority concessions and dropped a few of the 72 which may not be runners I think to show good faith with Ecuadorian Govt
- they think there may be a 2nd porphyry in South Ecuador - Cisne Victoria/La Hueca/Timbara/Provenir which are now high priority drilling targets. Presumably these are the areas that may exceed Cascabel as referenced in Anna's comments?
Looking positive and company doing everything it seems to manage in-country Govt risk which for me is the biggie. All IMHO.

[pob69] 16/10/2018 15:47

Update to the previous AFR article with further broker comments $SOLG $SOLG.L #ecuador $CGP

RBC analyst Paul Hissey said BHP had "clearly ramped-up its willingness to pursue this project" and had greater financial firepower than Newcrest.

"While we believe there is clearly a mismatch in the ability to pay up between BHP and Newcrest, we firmly believe Newcrest has some genuine technical skills, which don't appear obvious within the BHP portfolio," he said, in a reference to Newcrest's experience with block caving and panel caving at Cadia in New South Wales.

"The other concern for the market will likely be what the 'right price' is for an emerging project, which has not yet confirmed the full extent of the mineralisation.

"This remains a long dated project, with drilling, evaluation and approvals likely to provide benefits to future generations of management at both BHP and Newcrest."

[cflather2000] 16/10/2018 15:33

Does anyone know the capex expected on a block cave mine of this scale? I read first production for block caving is usually 10-20 years after the mining starts, and most of the capex is upfront

[onedb1] 16/10/2018 15:19

All true and the funny thing is watching regular punters missing out . Not having my shares at 40.1 . But there you go punters know best lol

[pob69] 16/10/2018 14:16

Upate from Dutch based Commodity Development Fund's CIO Willem Middelkoop, whose largest holding is $SOLG $SOLG.L #ecuador $CGP

CEO Nick Mather makes next move in the SolGold chessgame
After BHP Billiton announced it had taken a 6% interest in SolGold because of the enormous potential of copper/gold discovery in Ecuador, last month, it was announced yesterday that the world’s largest miner has almost doubled its position. Noteworthy is that last month’s transaction was executed at a share price of 26.5p, and now, a little over a month later, BHP is prepared to add at 45p. This is also almost 30% higher than the price of yesterday’s close. With this transaction, the major BHP corporation voluntarily subjects itself to a number of fairly stringent provisions drawn up by the much smaller SolGold. For example, BHP may not expand its share in SolGold without permission, and can therefore only make a takeover bid if SolGold management agrees.

On the one hand, this unfortunately makes a bidding war more unlikely, whilst on the other hand making a future takeover (at a higher price) much more of a certainty. We have calculated that CEO Nick Mather controls 55% of SolGold, either directly or indirectly. We find it very unlikely that he will consider the current valuation of the company a proper reflection of the true value of what is in the ground, given the size and strategic importance of the deposit, and especially given the potential for further expansion.

At 45p, BHP is putting strong support under the share price, diluting the largest single block of shares over which Mather has no control from approx. 22.5% to approx. 20.5% (the direct and indirect interest of Cornerstone). With the expansion of shares by BHP, it is becoming increasingly difficult for a third party to make a hostile takeover. This would certainly have to be with the cooperation of Cornerstone, but even then you would not get enough shares without Mather’s consent. He is in control of SolGold’s destiny, confirming once again to be a good chess player.

Why would BHP not take over SolGold outright? SolGold will probably be much more expensive at a later date as the project is further developed. BHP is a financial heavyweight, and is likely to have much more interest in a project that has been largely de-risked. With the forthcoming update of the resource estimate (size of the deposit), SolGold expects a strong expansion. The PEA (economic study) expected later this year will also provide a first insight into the feasibility of the copper/gold project. These are valuable risk-controlling milestones for the major producers. And given the concessions that BHP had to make to acquire these latest shares, the urge to get a position in one of the most significant new copper projects is much greater than any additional costs that would be incurred with making a bid at a later time.

[mirabeau] 16/10/2018 13:53

SolGold Plc

Great White Shark Takes Another Bite

Impact: Very Positive

BHP makes a statement by increasing its stake in SolGold at a premium. BHP Billiton (ASX:BHP; LON:BLT) has increased its stake to 11% and has provided a good portion of the funds required for SolGold’s 2019 exploration program. This should lift any perceived financing overhang and opens the door to a valuation rerating. With copper fundamentals improving and few large-scale undeveloped projects available (Figure 1), we expect Alpala to be coveted by major miners looking to bolster future production.
Highlights:

BHP’s second investment should act like blood in the water with other majors circling this world class asset. BHP Billiton (ASX:BHP; LON:BLT), the world’s biggest miner, purchased 100M shares at £0.45/sh (C$0.77/sh), a 30% premium to the 20 day VWAP. BHP is now at 11.2% or 203M shares (was 6% or 103M shares), putting it just behind Newcrest Mining (ASX:NCM) currently holding 14.5% (247M shares) (Figure 2). We believe Alpala is one of the few large-scale copper assets available (Figure 1); thus, it is likely other large mining companies noticed the feeding frenzy.
Multiple strategic investors create competitive tension. With two strategic shareholders over 10%, we expect that a takeout is most likely to occur at a premium to historic transactions. We note that copper projects historically sell for, ~US$0.07/lb CuEq and BHP’s investment implies a value of ~US$0.065/lb CuEq (pre-material resource update).
Exploration upside on an already world-class deposit is attracting attention. The current resource of 16.18Blb CuEq, is based on 53,616m of drilling. The updated resource estimate expected in Q4/18 is expected to include an additional 70,400m of drilling; which we believe should grow the resource materially.

Valuation:
Valuation neither reflects likely resource growth nor competitive tension on a take-out. SolGold trades at US$0.050/lb (pre-resource update) versus peers at US$0.037/lb CuEq (Figure 3). In our view, the upcoming resource growth and the strategic interest in the project should warrant a share price re-rating given that the company is largely funded for 2019 exploration efforts. Upcoming catalysts: 1) Ongoing exploration and 2) Resource update (Q4/18).

[jerryspaniel] 16/10/2018 13:52

Instos? Blackrock, JPM and Fidelity are on board, so its starting.

[jerryspaniel] 16/10/2018 13:50

I am not sure that BHP would be allowed a look at any non public info. there could have been some nudging and winking though...
Agree 7rademark, to think that a v large company with a LOT of knowledge is v happy to pay 45 and others who know NOTHING are sellers at <41. Beggars belief, but gives me another buying oppo!

[lefrene] 16/10/2018 13:47

Perhaps we will see a holdings declaration soon 7trademark? Has Solg now become 'investable' such that the Insti herd will now follow on?

[7rademark] 16/10/2018 13:39

Price is being lowered to accommodate larger buyers imo, interesting that sellers are interested in a price that's 15% lower than the placement but each to their own I suppose.

[lefrene] 16/10/2018 13:35

BHP most likely have had a preliminary butchers at MRE2, so it must be very good.

Whoever in Newcrest backed the 41p investment must be heaving a sigh of relief, if they still have their job that is!

[jerryspaniel] 16/10/2018 13:25

Agree completely Lefrene. Management at SOLG must know that the only way to build a company is to under promise and over deliver, not the other way round. So I take Anna's comment as being huge, and almost certainly approved at the highest level. They were clearly trying to get the price up as high as poss so that they got BHP to pay as hi as poss too.
Some time ago I postulated on what the price could eventually be, which is always a bit of a fools game (but we all do it). I am tempted to double those numbers now.
MRE2 becomes the most significant announcement.

[lefrene] 16/10/2018 13:14

One thing for sure, this is not BHP having a 'punt', this is serious intent, so how serious are some of the other 'wannabe' miners out there? Who is talking to whom about financing extraction, and is Blackrock part of that conversation? This is heavyweight money content to progress matters in an orderly manner whilst they wait for metal prices to improve against fiat currencies. One can almost hear those bankers licking their lips :¬) No wonder NM was talking a 10 to 15 bagger not so long ago when the price was in the low 20's.

So ODR 2 quid or 3 quid :¬) ?

[onedb1] 16/10/2018 12:30

'To my' not tiny :-)

[onedb1] 16/10/2018 12:30

I agree and we have a long list of interested parties as we have been told recently . Find it quite short termed to sell at 44/45 . But if like me some must have been holding from say 20p then I understand . I haven't sold 1 . In fact I see the next 45p break as a chance to add if anything . It's clear that this is not going to get sold for less in fact it's pretty clear even 60p for example is not the price . Solg in my view should therefore be trading at a premium of 45 . Market is made up of a lot of retail too so I suspect they will slowly come round tiny view

[lefrene] 16/10/2018 11:30

Someone within Blackrock must be feeling quite pleased with themselves today. :¬)

I do hope we see more news about some of those other tenements soon. Cascabel is worth many billions, and I suspect we have a clutch of Cascabels, NM will have been most particular when choosing extra land. I would think anyone buying below 45p is not going to go far wrong.

[7rademark] 16/10/2018 11:03

The share price will see 45p again possibly today, it's already trading at a 10% discount to the opening price so an excellent entry level

[brahmsnliszt] 16/10/2018 10:22

proof if needed that NM really does have a very strong hand. He has promised alot so I do hope he delivers, but BHP's actions pretty much says they have faith in SOLG and id trust them more than my limited knowledge. A 'buy the dip' share if ever ive seen one.

GLA



'Mr Mather said the two-year freeze on BHP could be relaxed in certain circumstances, but was designed to allow the explorer to prove the true value of its Cascabel tenement in northern Ecuador.

"We want to make sure we reveal Cascabel in all its glory first before we get jumped on opportunistically. They can always negotiate something with us and do it quicker but it needs to be negotiated," he said.'

[onedayrodders] 16/10/2018 10:11

Typical ..a discounted placing and the share price drops to match and usually below.
Doesn't work with a placing at a significant premium.

[onedayrodders] 16/10/2018 10:01

shame we had that global macro wobble otherwise it might have been a 50p handle today

[7rademark] 16/10/2018 09:54

Dangerously undervalued. I like that.