Solgold Share Discussion Threads

[arcadian] 14/9/2020 12:07

Low

The problem I have is that these figures are so embryonic that to imply anything from them is premature. Values are so fluid and flexible that I will await the NPV by "an authority"

For me you wandered into a dirty pond, came out covered in something unpalatable and then confessed you didn`t know what you were supposed to be doing there.

[lowtrawler] 14/9/2020 11:48

Arcadian, you fail to understand the discussion I posted. I am not suggesting a valuation for SOLG. I am interpreting the implied valuation from the FNV deal. They are 2 different things.

The implied valuation is the share price we would need to reach in order to make equity funding competitive with NSR funding. The frustration for SOLG is that the whole idea for having a stock market listing is to give access to the capital markets. The idea is that equity investors are more willing to take risks and so will offer financing that you can't get through other finance providers.

When they made a 45p placing with BHP, the markets were working effectively. We are now much further developed but it would be difficult to see any equity placing at more than 25p yet FNV can see value around 60p. Unless the markets reflect fair value, it is likely SOLG will bypass equity in favour of debt and streaming finance deals.

Now FNV have a foothold, unless the equity price improves, they could offer $70m for each additional 1% NSR and it would still represent value compared to funding through equity with current equity holders getting a smaller and smaller slice of the pie.

Our price needs to waken up to this possibility and better reflect underlying value or we risk significant dilution.

[arcadian] 14/9/2020 11:13

"As I stated at the outset, NSR funding is not my area of expertise."

Better left to those who actually know.

I much prefer PHAT`s conclusion of a bid at 40% of the revised NPV plus $1 billion for the rest.

[mknight] 14/9/2020 11:01

30% of 6.5 billion gives us market cap of 1.95 billion or 3 times todays price .

[lowtrawler] 14/9/2020 10:29

I'm not an expert on NSR impacts on valuations but my basic understanding for Cascabel is that a 1% NSR will remove around 1.5% of the mine value. Hence, those saying 1% for $100m = $10bn are mistaken. It is closer to $6.5bn. You then realise that the NSR comes with certain guarantees and advantages that non-royalty holders don't enjoy and so it further inflates the implied valuation.

Taking it to extremes (and I'm not recommending we do this), we could fund Alpala with around a 30% NSR deal on the same terms as the current FNV deal. However, we would then end up owning only around 50% of the mine (and it wouldn't be 50% of $6.5bn, it would be more like 50% of $5bn). Then, the Ecuador government take around an 8% Royalty for taxation. This leaves Cascabel shareholder value around 40% of $5bn. We own 85% and so the FNV deal has an implied valuation to us of around $1.7bn or 60p per share.

For this stage of development, it remains impressive to get that sort of implied valuation. If the market were willing to take the same level of risk as FNV, our shares would currently be trading at 60p. This is before you add on any of our other development sites. The idea of equity investment is that equity investors will take on more risk than other finance providers so 60p should really be our current base price.

As I stated at the outset, NSR funding is not my area of expertise and so I'm sure that the experts out there can tear elements of this apart. I would welcome someone with the skills to provide a more accurate implied valuation from the FNV deal.

[bogotatrader] 14/9/2020 10:21

According to August SolGold Presentation FNV have $1.5 billion cash on balance sheet to allocate to royalty and streaming deals

[boris cobaka] 14/9/2020 09:45

Volume's pretty good so far.

[arcadian] 14/9/2020 09:30

Pob

Good to see you up and about. It`s a crowded field. So many contenders for

attention and investment but FNV chose SOLG to spend its $ 100 million on ;

something that makes us special and worthy of attention by the big players.

[lowtrawler] 14/9/2020 09:23

What we thought was a tick up caused by the BOA buy note last week was probably helped along by those having knowledge of the FNV deal completion. The only explanation I can think off for the lukewarm price response today.

Next announcement will likely be a regional exploration update. We may or may not then get the requisitioned meeting details followed by the formal failure of our CGP bid. Then we have the PFS together with BHP coming out of standstill.

I remain of the view that the PFS by itself will only have a mildly positive impact on the price. Announcing long term financing plans alongside the PFS would be a kicker but I suspect that the CGP bid failure will make longer term financing arrangements more difficult to announce.

[pob69] 14/9/2020 09:02

Solgold presenting at the 10th annual Precious Metals Summit BEAVER CREEK 4.30pm BST on the 15th $SOLG $SOLG.L $CGP #cascabel #ecuador

[arcadian] 14/9/2020 08:54

Low & LEF

Agreed. Excellent news.

Money from such a quality outfit who know this sector speaks volumes- a massive vote of confidence all round. It will give great strength to NM and widen his/our options..

[lefrene] 14/9/2020 08:31

That's the FNV seal of approval in place, and they wouldn't be lending that sort of money if they weren't certain of success, and they have a very good track record.

At least this was one "soon" that actually did turn out to be soon! Lets hope NM continues to deliver other outstanding items soon too.

[lowtrawler] 14/9/2020 07:55

Excellent. If they had extended by the further 4 months, 12,220,000 warrants would need to have been issued. The outcry from CGP and Newcrest would have been deafening.

[swanvesta] 14/9/2020 07:50

$10bn is just for Cascabel...

[greenelf] 14/9/2020 07:33

That lad is a sharp cookie!

[fsawatcher] 14/9/2020 07:28

i dunt understand that mentals

if it 1% royakty for $100m does dat mean de other 99% is $9.9 billion??

this got 85% of dat 99% innit?

that worth 10 x market cap

[jammytass] 14/9/2020 07:17

Looks like they have major faith in there projects future is bright

[mirabeau] 14/9/2020 07:04

Lovely...transparency and a route to monetisation is now embedded...

[greenelf] 14/9/2020 07:03

Yay, FN green light for financing.Massive credibility boost for financing all of it soon.Blue day!

[bogotatrader] 13/9/2020 18:37

Pob69 - thanks for the link. some interesting reads....BofA Merrill Lynch - guess they may want to pitch for some financing business along with Citi

[pob69] 13/9/2020 13:06

Historic broker notes (sadly not he Bank of America) are available at

[mirabeau] 13/9/2020 09:43

It's 2019 fella but thanks anyway. If SOLG sells for half of that I'll be happy

cheers

[bogotatrader] 13/9/2020 09:42

Stock is in play - question is will it from current levels be only a 4 x bagger or will we see a 6 x bagger in the near future