Solgold Share Discussion Threads

[mknight] 27/3/2019 12:16

5070481

I think you are right mate .

I have been looking for something thats not there.

[5070481] 27/3/2019 12:11

WHy does everyone think that news is being held back rather than simply Solgold havnt got the report out on time. They have history of this. Its a share swap so a storng solgold price looks attractive as far as I'm concerend for Cornerstone holders.

[rougepierre] 27/3/2019 12:01

exactly lefrene...

My suspicion is that NM got wind of a bid for CGP from elsewhere (obvious suspects) and has intervened either to:

Get CGP himself and thereby 100% of the project;

Disrupt the other prospective bidder;

Jack the CGP price to create a higher exit price with a knock-on leverage of the SOLG price...

But who knows...

However, maybe the ;less than stellar first RNS in a stream that we are promised was deliberately downbeat to keep the CGP price down and worry their existing investors...

The daftest quote from CGP's bid defence was the one which admitted CGP's steady dilution...a very good reason to bite SOLG's hand off right now...duh!

PS I used 0.55 SOLG for 1 CGP in my calculations...also current CAD rates at the relevant times...

[mknight] 27/3/2019 11:58

JUST CHECKED

Jerry you are nearly right it is .55 sol gold share for 1 cornerstone share-

So forget my comments today based on Lefrenes post it makes no difference if our shareprice goes up .

Back to not understanding why news is being held back .

[alwaysevolving] 27/3/2019 11:58

Mamfac,

Yes, pretty much. 74p (at today’s exchange rate.)

[lefrene] 27/3/2019 11:50

jerryspaniel, I could have mis-read, but from the Solg website that's how I understood it. I'll have another look. But if it were a straight swap share for share, then CGP holders remove the risk of being diluted in a cash call for their share of mining costs.

[jerryspaniel] 27/3/2019 11:46

Lefrene. I thought that the solg proposal was a share for share swap that implied a value of 55c at the time. It’s a fixed ratio but not a fixed price. So as solg rises or falls so does the implied value of the deal to cgp s/h.
If I have this wrong then I blame in on fact that only landed from kl at 5.30!

[lefrene] 27/3/2019 11:33

I wonder what would happen to CGP price if Solg withdrew their offer?

If Solg got taken over by the likes of BHP who then went for a $3 billion mine programme, where the heck are CGP going to get their slug of money to keep up? Presumably if they can't make their contribution they lose their 15% slice, or have to sell it for chicken feed to the big bruiser.

If I were a CGP holder and given the poor performance of the CGP board, I believe I would take the Solg offer and enjoy the coming uplift in Solg value, and thus avoid a highly likely cash call to hang onto CGP's position.

[mam fach] 27/3/2019 11:32

Sure we all agree. Does that equate to 75p?

[pob69] 27/3/2019 11:26

New Red Cloud update Solgold $SOLG $SOLG.L #ecuador $CGP
Valuation:
With our estimates still unchanged, SolGold remains inexpensive. SolGold trades at 0.42x NAV, a discount to peers at 0.50x. Given the scale and potential of the Alpala deposit alongside the current interest from majors, we believe a 0.90x NAV multiple applied to our C$1.47 NAVPS estimate would be appropriate implying a value of C$1.32/share. Upcoming catalysts: 1) Maiden PEA for Alpala (Q2/19) 2) Ongoing exploration results.

[mknight] 27/3/2019 11:06

Mam

It could be said with the bid on the table for cornerstone. It is not in solgold interest for our shares price to rise .

All if they cannot up their offer .. which still seems strange but maybe it is the law.

[mam fach] 27/3/2019 11:04

Looks like share price is being held down- don't know how.
Once we get news it will be a stream of RNS's.
Know we solgers have been patient a long time.
But wait just a little bit longer.
GLA

[mknight] 27/3/2019 10:56

My next question is .

1. Why did NM wait so long to make the
Offer to Cornerstone .

2. Why have they not finished all paperwork to get the offer to cornerstone a month ago .

I now understand why Cornerstone said that Solgold are always late on reporting . The directors want Solgold shares to go up so the offer is unacceptable. Interesting that we had a seller who held back the share price from rising which many thought was an interested party waiting to buy solgold..

[mknight] 27/3/2019 10:42

Lefrene.

Thanks ,

Now i understand why NM does not want to put the RNS out .

If he does then there is no way cornerstone Would accept 55 cents . I cannot remember who said it but for some reason he cannot up the offer which i found strange at the time .

[lefrene] 27/3/2019 10:14

Solg has made them an offer equivalent to 55c per CGP share but payable in Solg shares. If Solg shares rise in value then CGP holders get fewer Solg shares to meet that 55c.

It would seem that the sooner they accept the more chance of getting a higher number of Solg shares. If a take over should happen then they benefit with all the other holders. If they hang on to their CGP shares then they are walking into a cash call and possible dilution to meet their share of mining costs.

[mknight] 27/3/2019 10:02

Shadbadi

There is no guarentee Cornerstone shares would rise . Although the probability is they would. However they would be one step closer to having to pay the costs incurred for drilling etc which would be many millions.

With only 3.5million in the bank they would need funding and be diluted.

The offer solg are making is really very fair imho

[noccer] 27/3/2019 09:48

Just getting my head round Cornerstone's position - apols if I am the only one here who didn't understand it.

First the spin off was cancelled in Sept 2018 due to "the ongoing delays faced by the Company in obtaining certain approvals" - no mention of what they were. Then there is the issue of Cornerstone's obligations to fund Cascabel. These cut in on the publication of a feasibility study, at which point Cornerstone becomes liable for its share of the costs from the point at which SOLG got its 85% interest in ENSA up to publication of the FS (plus interest), and has to pay its share of costs going forward. In Cornerstone's Sept 2018 Financial Statement it mention this under "Long Term Investments" where it states "No provision for the contingent liability for the repayment of Cornerstone’s proportionate share of the expenditures incurred by SolGold, has been recorded in the Statement of Financial Position as management has assessed that there is still high uncertainty regarding the outcome of a potential feasibility study."

When the PEA is released the uncertainty over the feasibility will be reduced, and I suspect CGP will have to start noting this liability especially as no longer "long-term". The timetable for production of a feasibility study is clearly important to Cornerstone.

Of course a major coming in could blow all this out of the water, but maybe the current limitation imposed on the bhp and newcrest shareholding in SOLG are designed to let this SOLG/Cornerstone game play out first, and see if the mining friendly government holds its course. Just my lowly opinion of course, quotes here are taken from Cornerstone report on SEDAR.

[shabadi] 27/3/2019 09:48

rougepierre

"But if CGP take the offer and SOLG's price rose, say to 60p on the PEA, CGP shareholders would make almost 60% profit..."

Surely, it's the same if they do not take the offer - am I missing something ?

[mam fach] 26/3/2019 21:55

Considering there's been quite a lot of selling today
price has held up well.
Perhaps short term holders who were in for a quick profit.
Investors Chronicle tipping Solg as buy after today's RNS.
How long to next RNS is critical.IMHO

[rougepierre] 26/3/2019 18:34

Meanwhile, SOLG 'Cup and Handle' still looks good...

[rougepierre] 26/3/2019 18:34

Seems like a smart move to me...the CGP bid that is...

Scenarios:

- He wants 100% instead of 85%; more control without interference; but also, 100% would be much more valuable than 100/85 x 85 (if you get my meaning...)

- He senses a bid for CGP from elsewhere and is either trying to nick it himself or jacking the price for the prospective buyer...if CGP's price rises significantly, surely that demands a rapid rerating for SOLG itself...?

- He senses serious bid interest for SOLG and wants to disrupt by getting into an acquisition process, also making SOLG a bigger fish...

- It occupies people's minds until the PEA comes out, which, if NM's hyperbole is borne out, will surely significantly jack CGP's value as well

SOLG's offer was worth 19.66p per CGP share on 30 January, when CGP was 16.8p (it rose the next day to 19.14p...).

It would currently be worth c21p/share vs CGP's current price of 21p...

But if CGP take the offer and SOLG's price rose, say to 60p on the PEA, CGP shareholders would make almost 60% profit...

Frankly CGP's defence is ludicrous and hardly worth mentioning but these snippets are hilarious when you turn the logic round...

"The benefit to Cornerstone's shareholders of the Company's strategic 15% carried interest in ENSA is apparent considering the significant dilution SolGold's shareholders have experienced and are likely to continue to experience as a result of SolGold's attempts to finance the substantial ongoing development costs associated with the Cascabel project. In less than 18 months Cornerstone's former 11.25% ownership interest in SolGold's shares has been diluted by over 18% to 9.2%."

"The proposed Hostile Bid represents a significant discount to the multiples in precedent transactions involving other mineral exploration companies. Assuming SolGold had liquid shares acceptable to Cornerstone's shareholders, the proposed Hostile Bid implies a valuation for Cornerstone of approximately US$0.02 per copper equivalent resource pound whereas precedent transactions with assets of lower grade and smaller size represent an average implied valuation of approximately US$0.07 per copper equivalent resource pound. SolGold would need to approximately triple their implied bid for Cornerstone to match the average from precedent transactions."

Which also means that SOLG is massively undervalued...does he honestly think CGP will gain more in capital terms by sticking it out rather than swapping for SOLG shares that we know BHP and Newcrest and many others want...

"The Board believes that SolGold announced the proposed Hostile Bid to:

- exploit its inside knowledge about the Cascabel project prior to the release of the preliminary economic assessment for Cascabel and before material information was appropriately disseminated to Cornerstone and the market;
- pre-empt Cornerstone's ability to enter into a value enhancing transaction with third parties such as BHP given its unusual standstill that does not expire until October 2020; and
- deny Cornerstone's shareholders the opportunity to realize the value of Cornerstone's carried interest in the Cascabel project."

Well that all makes sense...see above...

And finally in desperation....

"SOLGOLD'S SHARES ARE HIGHLY ILLIQUID WITH A HISTORY OF SIGNIFICANT DILUTION AND NO CERTAINTY OF VALUE..."

Whaaattttt?!

Apply that argument to CGP shares...

If you take out the surge on 21st March, CGP average daily volume is c200/300,000 per day, i.e. c£50,000 and the spread is almost 3%...

SOLG equivalents are c1.75 million, i.e. c£676,000pd with a spread of c0.5%...

Who writes this stuff...CGP must be worried...

AIMHO as usual...

[simon_carter] 26/3/2019 16:14

Very nice volume today

[mknight] 26/3/2019 16:04

Looks like we lost alot of traders today as well which is góod news.

[lefrene] 26/3/2019 15:31

Well put Noccer, it's a case of take our deal or see the value of your investment fall as mining costs rack up. No wonder the head honcho of CGP apparently doesn't like NM. I'm sure NM will get us the best deal going, and hopefully the CGP holders will soon recognise that their best interests will be met by accepting NM's offer. CGP seems to have failed its holders, and likely it's the wounded pride of the CEO that's gumming up the works? Perhaps some kind of 'face saver' is required?

[noccer] 26/3/2019 15:10

Yup, Jerry, but Cornerstone have liabilities as well as assets.

On looking deeper I had missed the fact that Cornerstone's planned spin out of non-Cascabel assets seems to have failed (after 2 years of effort).They were doinf that so they could sell the cascabel part to a major once it was proved up (and presumably before they were obliged to stump up lots of money as required if it goes to feasibility). I read that Cornerstone shareholders have already suffered a fair dose of dilution. When NM says he is prepared to take it through to production, there is a message to Cornerstone shareholders about a large bill coming their way.

Its all very entertaining, and I get the feeling NM is not too happy with Cornerstone getting a free ride while SOLG does all the work.