Solgold Share Discussion Threads

[lowtrawler] 04/5/2020 09:21

Maybe you could point me to a post where someone has said Alpala is worthless, not worth developing, let's move on?The worst I have seen is applying a view based on current copper prices that Alpala is borderline viable. It's important for us to challenge this type of view as the mine will have a 65 year life and whatever the current spot price might be is barely relevant. However, understanding sensitivity to future metal prices is important.The fact that there are so many variables and unknowns makes it very difficult to accurately predict a value to SOLG. That makes the share price volatile and more likely to reflect sentiment than a detailed calculation. Minor news can have a major impact on the price. We are expecting positive news this week and so anticipate positive price movement. However, the news has been so well flagged, maybe not.

[phattrader1] 04/5/2020 09:12

Now the spike chasers are all gone, should see a reversal sooner or later. Unless the FTSE tanks.

[greenelf] 04/5/2020 09:05

Really, not "anyone"? Ok. lol

[arcadian] 04/5/2020 09:01

DD

Your words "Investors still haven't taken on board the SXX fiasco"

Surely that is the very business of analysis that you and others are in by modelling, acquiring data, devising ratios and making assessments of value. Worth is relative and needs comparison.

[lowtrawler] 04/5/2020 08:53

I don't really see anyone playing down Alpala. The challenges are how much of Alpala will benefit current shareholders?There have also been a bunch of highly misinformed posters trying to argue that we should value Alpala at the gross value of metal in the ground or ignore the costs to extract or ignore the risks or that the entire value will come to current shareholders. I think it's important to correct this type of misinformation.The value of Alpala is most likely somewhere around 7bn. You can argue a range of about 2bn - 15bn depending on the assumptions you make. At the moment, Alpala is the main driver for SOLG pricing and so reflects different views regarding risks and the proportion that will end up with shareholders.

[greenelf] 04/5/2020 08:15

Don't mind the down days, healthy. Resets the indicators and consolidates. 200 MA is good support.

[dozyduck] 04/5/2020 08:14

Phat - only goes to show prices paid for resources depend on 1) measurement status - ie P M or I, 2) whether needed to fill buyer's production 3) how far away 4) Cost to mine 5) Infrastructure 6) You name it, there are hundreds of other factors ! Comparisons are meaningless

[mknight] 03/5/2020 23:20

I would not mind BHP shares if the deal valued Solgold at a pound a share .

Can sell the BHP shares the next day .

[phattrader1] 03/5/2020 21:22

Recent takeovers in the market:

Wallbridge Mining's (OTCPK:WLBMF) takeover of Balmoral Resources (OTCQX:BALMF). Wallbridge paid a hefty price of $133.89/oz for non-producing assets and a sub-1-million ounce resource.

Fast forward three weeks and we've now got another deal in the sector, but Endeavour Mining has shown us the value of exercising patience and restraint when bidding for assets. The company just picked up 9.9 million ounces, with over 7 million of these ounces at producing assets, for the incredible price of $67.47/oz - less than half what Wallbridge Mining just paid for non-producing assets.


So all in all - if SOLG can get $100/ounce for non producing assets that would give us $1.95bn for the Gold alone at Alpala, add in the copper and were talking $4bn.

That’s what they’re paying. We shouldn’t accept a takeover for less than £1 a share. Bargain at current price.

[pecker1] 03/5/2020 18:03

FWIW,

My preference would be a bidding contest leading to a takeover of Solg by Barrick which includes the creation of a newco, say Solg2, which gives existing Solg shareholders a cash sum/shares in Barrick, as well as a share stake in Solg2 in proportion to their shareholding in Solg.

The new Solg2 would own all the wholly owned regional subsidiary companies in Ecuador and their 70+ prospects including the 13 major ones. This would allow Solg shareholders to benefit from Solg's proven exploration skills as well as a cash sum now and/or a high quality gold producer investment. I favour Barrick not least because I rate Mark Bristow as the best manager in the PM sector (Randgold was good to me!).

[dozyduck] 03/5/2020 17:22

Good points being made by all, esp re raising any equity AT THE Last moment. However the main point is that the more funding put up by others (including convertibles to some extent) the bigger the chunk out of the NPV to repay or reward them. That will limit the price at which later funding might be raised (and will depend on state of the markets at the time, as well as exploration success. Who can predict that in the current climate ?)

[lowtrawler] 03/5/2020 16:49

To be honest, my views are highly speculative and no better than guesswork. I don't think that we will hear anything along those lines next week and so they are irrelevant to the immediate share price.

[lowtrawler] 03/5/2020 16:40

It would be fairly normal in a standstill agreement to mention the company or it's subsidiaries and associates. To only mention the company leaves them open to acquiring subsidiaries and associates of the company. Also, in my scenario, BHP would be a friendly bidder recommended by the SOLG BOD and so clause 2 would apply.

[lowtrawler] 03/5/2020 16:33

Mk

If I am right and the intention is to hive away Alpala, it won't make any difference how quickly we develop the other sites. Alpala becomes a standalone asset unaffected by the other parts of SOLG. Clearly, the faster they develop the other sites, the better for shareholders but the 2 would no longer be connected.

[mknight] 03/5/2020 16:33

Lowtrawler you can read that both ways.

Is Alpla part of Solgold ?

If the answer is yes they cannot bid imho

[lowtrawler] 03/5/2020 16:26

No, the standstill arrangement is only in respect of SOLG, not it's component parts:

Standstill

Subject to permitted exclusions, BHP has agreed not to acquire further shares in, or make an offer for, SolGold for a period of two years (to 15 October 2020). Permitted exclusions to this provision include:

1 a right for BHP to acquire up to 246,634,271 shares in SolGold (not counting shares acquired by way of certain permitted acquisitions). SolGold has waived this provision in respect of the issue contemplated by the agreement which is the subject of this announcement;

2 a right to make an offer to acquire SolGold provided such offer has been first approved and recommended to shareholders by the Board of SolGold.

The standstill in respect of SolGold ceases in the event that a third party makes an offer to acquire SolGold.

[mknight] 03/5/2020 16:22

Lowtrawler . I dont think they can bid for any of our sites until October .

CARNEGIE RIDGE

Río Amarillo and Cisne

Both located only 30kms away he said because of CV Thats where they are going next . Makes sense as he has the Rigs and a base camp to do rapid drilling . My guess is once the money comes through they will put 5 rigs on each site and most of the Technical staff if he is going to pull this off he needs to move quickly. He has 5 months to turn 2 sites that are currently worth very little into 2 more sites that are worth 100,s of millions . The news will also ramp up the share price making it easier for him to defend an offer .

These next 5 months are going to send the share price alot higher than 40p IF the results are good we could be nearer a pound .

[lowtrawler] 03/5/2020 16:11

As I understand it, BHP can't bid for SOLG at the moment but there's nothing to stop them bidding for Alpala.

[lowtrawler] 03/5/2020 16:09

Put a few obstacles in the way. NM really, really wants to be a mining major; the Capital Gains Tax would be horrendous; my pet spaniel loves Ecuador......

Mr BHP, how nice to see you. You're telling me you've found a clever way to avoid the CGT bill? Aren't you clever, we never would have thought of that. What, you've always wanted someone with NM's experience on your Board of Directors and he could run your Ecuador operations? You have a monthly pet spaniel photo competition....... Well, come and talk to us about Alpala.

[lowtrawler] 03/5/2020 15:49

Speculating on how, when, who and at what price capital may be needed / raised etc is a great game for all the family. It's also key to understanding what proportion of the value from Alpala may come back to existing shareholders.

I've been racking my brain to come up with what will happen and there are just too many variables. All you can say with any degree of certainty is that funding will be structured so as to give current shareholders somewhere between 10% and 35% of the eventual Alpala value.

You then step back from this type of debate and ask, are SOLG really mining experts or are they explorers? Do they have the capital, experience, contacts and resources needed to make maximum value of the mining operation or is that BHP / Newcrest?

If you conclude that their key skill is exploration, it's then quite an easy leap to looking at all the current goings on as a dance before Alpala is sold. You don't want to get too greedy or they may just buy the whole company. You don't want to be too eager or you will get lowball offers. Pretend you don't want their advances and they will want you all the more.

[mknight] 03/5/2020 14:26

I think that they will raise alot of money selling gold on a forward contract.

No risk needed if the buyers gets a discounted price based on comex prices at the time of delivery

Could be the way forward if the contract say

100000 oz per year for 5 years . Would raise 700 million based on 1400oz .

Gold futures are 1792 for December 2025