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Given the huge scale of the Alpala resource alone and the stated need by the major copper, gold, silver and copper/gold majors for new resources, a 'low ball' bid would be a waste of time because it would surely be countered....
NEWCREST
September 2016 :US$23M @ 12p
• June 2017: US$40M @ 41p If sold would poss want 40-50p min
• November 2017: £6.5M @ 25p
• Board Nominee
• Anti dilution @ 10%
BHP
share (20% premium)
• October 2018: 100m shares @ 45.00p /
share (28% premium) Av 30-35p
• November 2019: 77m shares @ 22.15p /
share (13% premium)
• Non-blocking
• Anti dilution @ 10%
• 2 year standstill (October 2020)
• SolGold right of first refusal disposal
TbTT, a sale at even 50p would net NCM $175m. That's a tiny amount, even for Newcrest. Why bother? Are they going to let personal friction/ego get in the way of good business sense? Hold and accumulate whereever possible and reap the benefits many times over and above $175m down the line - it doesn't cost them a penny to sit on the shares.
Good morning Tiger, page 9 is interesting on Solgold's bid, but page 8 far more interesting, as gold price levels out this year, and starts to fall, and is at 1400 dollars an ounce by 2023. Thank you.
IMO, Newcrest wouldn't want to be a minor shareholder in a producing Solgold. Least of all under Solgold's current management. For them, it's either sell, become a JV partner with another major, or takeover SOLG entirely.
If their decision is "sell", Newcrest have to be thinking that the minimum price for their shares is 50p. A buyer could never accumulate so many shares on the open market without causing the share price to boom far higher than that.
Given by next weeks webinar it will be mid July and thinking back to when Ecuador re-opened a few weeks ago now with foreigners having to quarantine for 14 days on entering the country, maybe Franco have now done their site visit to Alpala and next week we will get an announcement of the funding sign off?
While we are waiting for news, I thought I would pose a thought experiment, with one assumption. The assumption is Newcrest don't end up owning Solgold. So now to the thought experiment.
Let's say that I am wrong, and we get a bid, from anyone except Newcrest. I have always said how does that work.
So how low can the bid be, that holders of blocks of shares, would sell to the person bidding. In other words to obtain Newcrest's shares. Newcrest know the value in their holding, so what would be the minimum someone could bid to obtain Newcrest's holding, and why?
Thanks Copperpot
Just can’t see how anyone believes 40p bid has any hope of succeeding.....the clock is ticking and NM has very adeptly moved himself into the driving seat here..... just need to get Franco over the line and any hope of getting this for peanuts has gone
TBTT, I think you nailed it when you said: "All that Newcrest don't want, IMO, is for the current state of affairs to continue."
That's dead right. NCM are not at all happy with the current state of affairs! The current state of affairs being that SOLG is slipping from their grasp, whereas 3 years ago they thought they saw a path to buying themselves a majority stake by drip feeding cheap dilution money.
TbTT, I believe you are thinking like a PI and not a miner. NC wont make a low ball bid just to bring in BHP or others unless they might actually want to buy Solgold. They wont think 'at 30p we wouldnt mind owning it but at 50p we would rather sell up'. They either want it it or dont.
The leak of news about RBC is just to alert any potential buyer that there is a conversation to be had. The fact the the sp isnt moving sadly speaks volumes. If the market thought there was going to be a bid at say 45p in next 3 months, this share would be trading above 30p now.
DBW, great post mate.
I honestly believe no low ball offer can succeed which is probably why there hasn’t been one . Say BHP offered 40p a share . They would be getting Solgold for south of a billion . Do you honestly think the likes of Barrick would simply sit back and applaud BHP’s shrewdness? There’s no old boys network in operation here and if there were, I doubt very much that the Chinese are members . They all know what we have and what we potentially have on top. They also realise that once the first bid comes the price could disappear over the horizon . Their only hope was for Solgold to be cornered and come to BHP / Newcrest with the begging bowl to stay funded ..... that didn’t happen . Now Newcrest are sulking as they are probably priced out of this ( with all their other commitments) whilst BHP are keeping their powder very dry .... the silence is deafening..... 98 days and counting
Hi tbtt, Newcrest were happy to pump multi millions of cash into Solg with the current management team. It's only when they got their noses pushed out that they decided " not lo like" them! I was happy looked after me and not them with regards dilution. In essence....they are bullies that didn't get their own way on the last raise!
GLA.
I'm taking the recent (and highly-publicised) Newcrest appointment of RBC to be a kind of billboard proclamation, advertising that they are not happy with Solgold's current management, and that they are willing to talk to anybody about anything in order to bring about change.
Is their stake on sale? Yes, for the right price. But could they be persuaded to add shares, and make a takeover bid? Also, possibly yes. And would they be interested in a JV takeover with another partner? Also, possibly yes.
All that Newcrest don't want, IMO, is for the current state of affairs to continue.
TigerByTheTrail, what you say makes perfect sense if NC needed to unwind their investment in Solgold. Otherwise would they not be better off to wait ? Any successful bid is likely to be lower now than once the current crisis improves and also Solgold has added more value .
Sellers out in force again , dark forces at work.
I've been thinking that it makes sense for Newcrest to make a low-ball bid for Solgold as soon as they can. (It may take a few weeks for them to get such a bid organised, and they may wish to try and buy out Cornerstone first).
Firstly, the bid may succeed. In which case, it's good for them.
Secondly, it releases BHP from their shackles, allowing them to make a counter bid. That would mean BHP were free to make an offer (at an appealing price) for Newcrest's stake. Again, good for Newcrest.
Thirdly, such a lowball bid may force any other potential bidders (Barrick?) out into the open, again potentially increasing the sale value of Newcrest's stake. Again, good.
On the same point ( ish ) any low ball offer will appear more attractive with the sp at these depressed levels. It’s almost nailed on that the share price will rise considerably between now and October on anticipation alone . Therefore it would make sense for any potential aggressor to move sooner rather than later ..... if indeed anyone is going to
So how does everyone see us being able to defend a low ball offer from a possible J V from any combination of company’s ,baring in mind our average share price over the last year