Solgold Share Discussion Threads

[lowtrawler] 30/7/2019 15:16

Relax mk and have patience. The share price needs to absorb the implications of trying to go it alone and find a new equilibrium. I have no idea what price that will be but I suspect it is closer to 20 than 29. The fundamentals haven't shifted, there is just less chance for a short term return and more execution risk. It means that SOLG will now appeal to a different set of shareholders than before.

[mknight] 30/7/2019 15:05

Lowtrawler

Lets face it at with a current value of around 500 million for what Solgold has found and continues to find more of . Someone will make an offer before we get finance even sorted .

Patience is needed . I continue to buy at these levels .

The lower it goes the more i will buy .

[lowtrawler] 30/7/2019 15:04

Arcadian. Exactly. The message being sent is SOLG are going for it and not pursuing being bought out. It means no short term gains and a longer return window. It also means more risk / uncertainty as we have to do everything ourselves. Ultimately, it should mean a better return but the share price is going to fall quite a bit before then.

[arcadian] 30/7/2019 14:35

Hiring shows serious long term determination not a temporary itch.

[lowtrawler] 30/7/2019 14:31

Not really. SOLG are likely to massively dilute existing shareholders in any financing that they do making it much more expensive for a predator to take us out. The big boys could fund us from loose change. Waiting for us to do the financing will make us much less attractive. Remember, small companies pay much more for finance than the big boys.

[lefrene] 30/7/2019 13:52

I wouldn't know what a predator might want Lowtrawler, but I would have thought a loan package in place would be an asset, as the predator can use their own money for other things, perhaps another buy out elsewhere? It's always very handy to keep hold of your wad in your back pocket, it provides flexibility for opportunities that might show up. Perhaps a consultant might not seem to have any loyalty to their client, whereas someone who has joined you on the payroll has aligned himself with your business.

[lowtrawler] 30/7/2019 13:24

Except any predator is unlikely to want or need financing put in place by SOLG as a standalone entity. To demonstrate your willingness to go to production, you would usually engage a specialist consultant, not hire them into your company.

[lefrene] 30/7/2019 12:22

A well constructed argument Lowtrawler, on the other hand Solg couldn't just sit there passively with a 'for sale' sign because they lack the means to exploit their find. They have to pursue a course that demonstrates they are capable of achieving production, and the substantial rewards that will follow from production.

It suits any predator to sit back until Solg has done all the donkey work and got financing in place, and then step in. Plus of course all the other resources that Solg has will be a nice bonus.

[mknight] 30/7/2019 11:57

Dilution is coming and that is normal.

But i think it fair to say that the Sp will rise strongly after funding as it takes away one of the major issues .

With interest rates so low and looking to go lower has there ever been such a good time to borrow money .

[lefrene] 30/7/2019 11:35

I wonder if the hiring of the 'broker' is going to concentrate hearts and minds at Cornerstone? ie, if the broker negotiates a $3 billion loan, then Cornerstone have to find $450 million to keep their foot in the door. It would seem likely that Cornerstone would sell rather than face financing of that scale.

It's like wading through treacle but it would seem the end game should happen over the next 18 months.

[lowtrawler] 30/7/2019 11:32

Agreed Shabadi. The previous CC was a minor irritant which attempted to disrupt progress on the mine at a local level. It was never likely to have a major impact, more a distraction. The current government are very pro-mining and so, as long as the current government remains in place, it is unlikely there will be any serious legal obstacles to overcome. It is always possible for further local disruption to be attempted but, other than changing sentiment towards SOLG, it shouldn't materially alter the case for investment.

Gary makes a good point though, a new government could fundamentally alter the viability of the mine regardless of what the current government agrees. The question is whether you believe this likely or whether you think it is all bluster. In my view, opposition governments often take a populist stance to win votes and then put the economy first when they win power - governments need a strong economy to get re-elected and to fund their pet projects. Consequently, I think it unlikely that, even with a change of government, the mine will face political opposition.

However, it is exactly this type of risk that will make it more expensive for SOLG to fund development and which keeps the share price low. Think of it from a lenders perspective: You have a small company with less than £600m market capitalisation that wants to borrow several £bn to bring their mine into production. On successful completion, you get your money back with interest over 5 years but the shareholders make 10x their money or more. The lenders would be taking on most of the risk and getting less return. In reality, any new fund raise is likely to involve dilution, the only question is to what degree. This is why most miners don’t want to take it all the way through to production. It is often much better to double your money now than to take a diluted - say 10% - stake in something that still has to be built. The big boys can borrow easily and so retain most of the benefits to themselves. Hence, SOLG is more attractive to them than it is to existing Shareholders, this is what makes a takeover attractive to both parties.

Making an appointment for someone to actively fundraise for production sends out 2 signals:

1. You’re not actively engaged in any takeover discussions.
2. Dilution is coming.

This is causing any investor looking for a quick return to take flight. It should also be causing any long-term investor to question their appetite for the long haul with an unknown diluted percentage of the whole. It explains why SOLG has been falling even when the exchange rate is taking a nosedive.

[shabadi] 30/7/2019 09:18

mk This particular case was overturned due to lack of clarity in the question, therefor that particular case cannot continue and the ruling cannot be appealed.

But I can't see anything that states there cannot be another legal challenge, can you link to that please.

[hamid1970] 30/7/2019 07:49

Any views on solg Vs ars from a value perspective. Both look worthy of investment, ars looks cheaper, but no corporate cornerstone investor

[1garythomas] 30/7/2019 05:52

The problem with funding, its in equador, and general election within 16 months, and an opostion party in waiting, that are totally against mining, and the vast majority of people living in equador also against mining, very difficult to get finance, but if they do, it would be very expensive.

[trev1223] 29/7/2019 19:37

BHP up 1.98% today.

[lowtrawler] 29/7/2019 17:42

Over 1m sold after the bell. Could be bumpy here for a few weeks. I'm confident it will eventually go onto recover but it could test my 28p lower expectation shortly.

[lefrene] 29/7/2019 13:35

goldrush, with a declared breakeven in under 4 years I would hope a person with this much experience and track record could find funds at a very attractive rate. This presumably is where the lengthy courting of Canadian Banks comes in? There are very few prospects with the scale of Cascabel, and even fewer with such favourable infrastructure within striking distance of a port, that can offer such a short payback horizon.

Markets always want certainty, bankers even more so, but this appointment adds credibility to the quality of Solg's possessions. I want to see borrowings not more dratted dilution!

[goldrush] 29/7/2019 12:37

lefrene

Agree with you as it looks to be a very astute move.

[lefrene] 29/7/2019 12:28

This new man is an asset, his fund raising experience is helpful whether Solg does go to production or whether it gets bought by a big hitter. A big hitter will still be looking for the most advantageous way to fund exploitation, hence this new appointment adds value to the business.

It also underlines the intention and ability of Solg to get to production under it's own steam, no longer a weak supplicant to bullies with deep pockets.

[mknight] 29/7/2019 11:31

Win/win

Funding will help a purchase .

[shabadi] 29/7/2019 11:30

Funding or a purchase - perhaps Rio Tinto about to make a major move.

[mknight] 29/7/2019 08:18

The quicker we get funding sorted the quicker the share price can get somewhere near fair value . 15 rigs and the new appointment say we are ramping up for production

Will add a few more today .

Fast becoming one of the most undervalued stocks on the stockmarket .

[mknight] 29/7/2019 08:02

Everything says we are ramping up for production . The new guy will sort out the finances needed to get us to production quickly .

With a payback of only 3.6 years why not take it to production .

The share price certainly undervalues us x multiples it can be played with to allow cheap offers . Taking us to production is the best way of getting a fair value .