Solgold Share Discussion Threads

[nas_daq] 04/5/2020 11:56

I don't see you posting about your sells, I wonder why.Just an observationThe cynic in me would say you post your buys to influence other posters to do the same...

[lowtrawler] 04/5/2020 11:41

In my experience, potential funders advise their risk weighted cost of capital for a given project and this is used as the discount rate. If the NPV is positive, the project is potentially viable. The IRR is then used to show what the actual expected return on capital will be and acts as a sensitivity. They then look at the payback period to ensure they won't be waiting too long for their money. After that, they look at the detailed assumptions underlying the cash flows and apply sensitivities to key items such as metal prices, running costs, capital costs, taxation etc. Having done all this, they assess the risk and decide whether or not to invest.

[dozyduck] 04/5/2020 11:33

Phat I've been writing about copper (and China's near 50% part in its expanding use - I've been there) for over ten years. So thanks for your advice.

[arcadian] 04/5/2020 11:32

DD

You do make a lot of good points re your preferred way of looking forward and making comparisons which like all the other methods including NPV etc have that futurism weakness embedded by the very nature of the beast.

Over the weekend since sport has been lacking on the media I did a sketch of the three main contenders in the current "Guess the outcome for the share price of the funding game" with profiles of the three main protagonists and mknight as the genial accommodating moderator. The finalists were all credible, experienced in analysis and evaluation

Phat was the leader of the bulls/optimists in touch with the company, while Low the cautious pragmatist held the middle ground uncertain in a world where anything is possible. You were the cautious doubter who from experience of the real world doubted whether anyone would pay a penny more than necessary.

I didn`t want to offend so I pulled it and hope that the above does not by its oversimplification offend but this week the results or at least some of them will be announced and we will see through the monies offered, the demand for these metals now and as seen for the future. It will be interesting to see how the three camps deal with the outcome.

[mknight] 04/5/2020 11:16

Nas daq

Selling at the top and buying at the bottom is not possible.

Thats why i buy or sell at varios prices .

[phattrader1] 04/5/2020 11:12

Never heard so much tripe in my life.

The world is going electric. Populations are exponentially rising.

Copper prices will only go up. Certainly back to what they were by 2025. By then gold will be double what it is now.

I suggest you read the RNS about “expressions of interest”. The bidders want to mine a lot more in the first few years of the mine = less time to recoup their money. IRR will be 40% or more (2.5 years or less) at FORWARD PRICES.

If you are basing IRR on current spot price, you are totally misguided and don’t understand copper’s true importance to the global economy.

[lowtrawler] 04/5/2020 11:08

DD, the IRR is simply the discount rate that makes the NPV = nil. Hence, it's subject to all the same limitations.

[dozyduck] 04/5/2020 11:00

PS - I could go on. So I will
The key figure that mine developers and financiers need is the rate of return (irr) on the investment. They don't care about the NPV. (The irr remains constant whatever discount rate is used) Alpala's PEA irr with copper 40% higher than now was around 26%. I dread to think what it is now. The lowest irr considered acceptable (in relation to project loan interest rates) in my experience was around 20% - maybe 15% for a long life project with prospects. For anyone buying Alpala, the price will add to the investment and therefore reduce his irr. eg if he buys for the $2.7bn build cost, his investment doubles and his irr will halve. Its why I have said (and maybe others) that on present copper prices no one will buy Alpala, and maybe Solg shouldn't even develop it ! With the future world economy now in doubt will any banker or loan provider take a chance that copper will have recovered in five years time ? I dunno ! Do You ?

[lowtrawler] 04/5/2020 10:59

DD, I love a good rant on a Monday.There is nothing fundamentally wrong in using NPV as a valuation methodology. The difficulty is in pretending the results are accurate given all the assumptions that need to be made. It also says nothing about what proportion goes to which funders.As you say, if the banks and offtake funders are paid first, a much smaller proportion of the NPV is then available to everyone else. There is nothing fundamentally wrong with calculating an NPV over 65 years. Indeed, insurance companies may highly value the longevity. You do need to apply a higher risk factor the further out you look and this does not form part of the calculation in the PEA.NPV is only one tool in the box. It happens to be the only one currently visible to us and so gets more attention than it deserves. As we get closer to production, it will be possible to refine the NPV, apply funding and risk criteria. Have more accurate metal pricing, varying by year etc.At the moment, we have no choice but to use the NPV and then adjust it for our own personal assessment of these other factors. We then need to take off a healthy proportion for risk. Don't blame NPV, it's a tool and we're the workmen.

[rougepierre] 04/5/2020 10:49

Eight weeks is 7 May...

[mknight] 04/5/2020 10:48

Nas daq correct.

[nas_daq] 04/5/2020 10:42

Probably best if you post the whole rns where it states non binding and if an agreement is reached it could take up to 8 weeks from the lse announcement, judging from the time its taking its not looking too good.....

[nas_daq] 04/5/2020 10:40

Is that as well as your buys on Friday at 25.2 and the ones you've already bought this morning in the 24s

[lowtrawler] 04/5/2020 10:34

In the same way as 22.15 acted as a ceiling, it will also now act as a floor.

[dozyduck] 04/5/2020 10:34

Arcadian Not sure of your drift ? I mean people / analysts / investors / haven't learned that NPV's are not a correct basis for valuing a share. Nor have they learned that its an easy way out for lazy analysts (and mine promoters) and can be as long or short as a piece of elastic but always exaggerates. An NPV is merely the value today of all future cash flows. So why Pay it up front ? You won't make any profit. Investors seek to buy something cheaply. NPV's are the by-product of the economic analyses used by project developers to estimate cash flows and make comparisons with other projects and assess the rate of return in relation to the cost of funding. As I've said before, that rate of return is only available to someone owning the project and with the funds already in his bank. Its not available to anyone 'paying' something to buy it or needing to raise funds to build it. Examples of elasticity ? - Two projects with grossly different cash flow profiles can have the same NPV. You can increase the NPV by adding more years on to the end ad infinitem. In SXX's case it was pretending that investors would pay 'up front' for 55 years of future cash flows. (Sound familiar ? - that's the Alpala PEA's time scale too) The only true way to predict how investors will value a project year by year is to work out the cash flows to shareholders year by year and judge what rating they will give it. But an NPV gives no indication of cash flows. EG for Alpala, if a large chunk is financed by a bank loan, the early years cash flow while its being repaid will be miles below what the NPV would indicate. Analysts use a mine consultant's NPV merely because its there (too lazy to work out the actual cash flows, and many can't recognise that its not valid) and by mine promoters because it sounds like a big number. Those are just a few reasons why, in 15 years analysing around 70 miners I've never ever found a share anywhere near approach the broker-touted NPV. - even in the 2011 mining boom.

[mknight] 04/5/2020 10:26

Just been jumped ..maybe time to buy .

[rougepierre] 04/5/2020 10:24

From the 11 March TSX release...

"Funding discussions for finalising the DFS and SolGold's share of pre-development costs are progressing encouragingly. If an agreement is reached, finalisation and settlement could take six to eight weeks."

And the 16 April RNS

"SolGold is also pleased to have received material offers for funding in exchange for offtake from a number of traders in their recent EoI submissions. Offers included the provision of both short-term and longer-term capital..."

[lowtrawler] 04/5/2020 10:19

GGP is in the irrational exuberance phase. Ideal short opportunity.

[lowtrawler] 04/5/2020 10:18

ND, I thought the 150m and offtake announcement has been well flagged for this week. Why are you not expecting this?

[phattrader1] 04/5/2020 10:18

How can GGP be worth 70% of SOLG with a 30% stake of a 17m gold Haverion....

Maybe Cz they’re likely to go to production but with SOLG funding remains an issue.

We have 5-6 times the Gold of GGP with grams/t being 4 times better too....funding sorted soon hopefully.

[mknight] 04/5/2020 09:35

Lowtrawler . I agree . Perhaps a little more for drilling .

[lowtrawler] 04/5/2020 09:31

Mk, it depends what you mean by funding news? We are almost certainly going to get the offtake arrangement with proposed £150m. I doubt we will get anything on the longer term funding.

[nas_daq] 04/5/2020 09:30

It's only on here and particularly yourself who think funding news will be this week.It's extremely unlikely anything will be announced this week and the rns from 11th March pretty much states that if you take into account world events since the 11th March......

[mknight] 04/5/2020 09:21

A little strange selling today when the odds of funding news in the next 2 days are high .

Lowtrawler . It would seem to me that most think there will be no funding news in the next few days .

I have bought again today because i think there will be .

Some green shoots of buying coming through