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We all know that the potential NPV of Alpala is getting to a point where it is effectively quantified with certainty. If someone is to try and place a bid for Solgold as a whole, how can they place realistic values on the other wholly owned lease sites (Pourvenir, etc) where their stages of development are many years away from where Alpala is today? As each of these are in separate subsidiaries, I see it is much more likely that a bid from any of the majors will exclude these under-developed potential resources and more likely than not just be for Alpala itself
indeed
would love to hear those drills are a turning...........and diggin up gold (copper silver moly etc)
r's
BN.c
It's the whole ebay thing - doesn't really matter what price the first bid is at. All of the Majors will be aware of this opportunity and many will have decided a price that they will be willing to pay in bidding season - it will be bid up to the highest price.
As BNc said yesterday, the discussion is getting a bit stale now. Need some news to pep it up a bit.
Agreed Optimus except you left out the Franco Nevada news...that will kickstart the SP again IMO...
A starting bid of 40p would be treated with derision...how on earth could a prospective bidder build a book at that price...BHP and NCM wouldn't sell for that...
I repeat...there's little point in a 'low ball' bid because the final takeout...even now...would be £1 or more...
AIMHO as usual...
Dart Frog, that is an interesting post. I don't agree with your view that a takeover bid would start at the current share price. If a party is going to bid to buy BHP's shares they would be kidding if they thought BHP are going to be looking at 40 p (around what they paid) to be bought out of a Tier 1 project. If on the other hand, BHP makes a bid, then it will want control on its own or will seek to enter a JV with Newcrest. But in either case there is a lot of buying to be done before BHP gets control. If there is a bid the price will jump suddenly because there is no way that 27 p reflects true value for these shares. And BHP cannot presently control enough shares to take over cheaply in a hostile way. NM will only sell for full present value and BHP know that. The reason the share price is not moving is for a few reasons:
1. Everyone is waiting for the time in October when BHP is free to bid. It is like the "phoney war" in WW2 on the western front before Germany invaded France
2. We are waiting on the PFS and DFS. But number 1 is more important.
3. People are waiting news about exploration results on other tenements owned by Solgold. Whether they materialise before October remains to be seen. But if some great results came through they would move the sp
But I think people should not expect any dramatic increases in the SP before a takeover process begins. We are sitting quietly on the western front waiting for the war to begin
I got cut off at the end! The last word was "written"!!
There sems to be a view on this board that if Solgold is sold, it will be sold for £1 or even £2 a share. This may be the case later on but now the share price is under 27p a share, so that must be the starting point for any takeover bid.
Whoever might be planning a take over needs to build a book (of shares). This, therefore, will be based on the share holdings of Newcrest and BHP. As BHP are tied up until mid-October, nothing is likely to happen until BHP is released from its standstill agreement so, at the very least one will have to approach the other with an offer to buy the other's shares. For BHP they would be unlikely to accept less than the 40p a share as, I believe, that is what they paid for them and they would probably want more. The price paid for these shares would not have any bearing on the price offered in any full bid. So as things stand, it would be either Newcrest or BHP who make a full bid, but for someone else, e.g. Barrick, would have to start from scratch. Anyway those two blocks would only yield about 27% of Solgold's shares. They could bid for CGP's which would produce another 7%. I would guess they would bid for CGP's shares in Solgold not the company as a whole. They don't need that, probably more trouble than it is worth. Of the other major holders, Black Rock is a major fund manager with 50 plus funds (my guess) so it would be upto each individual fund manager to decide how their fund would vote, although I doubt if there are many Black Rock funds that have Solgold holdings. Whether or not a bid is accepted by any fund manager would depend what they are expecting from a holding, but I would doubt if there would be much appetite to sell cheap. Othe major holdings probably consist of banks' or brokers' nominee companies holding their clients' shares. They would vote on the instructions of individual share holders, I suspect most would not vote. The last major holdings are those relating to NM. I presume they would vote firmly against.
The result would be that, in theory, any company would struggle to own more than 50% of the shareholder base, but if it does, the price offered would be at a small premium to the share price at the time. I can't see it being much if any more than 40p a share as things are at present, unless there is anything much more significant announced by the end of October. Of late significant announcements have only moved the share price 1p or so.
I do not believe that there will be a bidding war as the ownership of the two blocks (Newcrest and BHP) is key.
As for spinning off Alpala, I don't feel that is viable at present as that is our major resource nearest to production. I believe selling off one of the other sites, or subsidiary companies, once they have been proved up to some extent would be more viable. Selling off Alpala, would delay any income into Solgold and thus dividends for us.
This is all in my opinion. No doubt many of you will disagree with what I have wri
Great posts this morning, some real food for thought.
We seem to be in a holding pattern for now. I’m sure some of these bigger issues will be much clearer soon..
Sav,I wouldnt hesitate to vote NM and current board in imho
Say Share 7. that is a good post.
I agree completely with the view that private investors should vote to keep the current board. If NM gets voted off the board it would lower confidence in the project. I think people underestimate how much of this project is associated with his personal drive, presence on the board, and reputation.
While Cornerstone might want to seek an advantage for itself by spilling the board this is not in the interests of Solgold shareholders generally including BHP and Newcrest. BHP and Newcrest would not permit Cornerstone get its way of renegotiating its deal for its own benefit to the detriment of Solgold shareholders. BHP would not want to see Cornerstone being paid more than it is currently entitled to.
Cornerstone has backed its way into a corner and would be better off ceasing the confrontational tactics now. It seems that ego has got in the way. It would be better off doing a favourable deal and allowing Solgold's share price to rise which would be to the advantage of Cornerstone (through its ownership of shares in Solgold and through the takeover terms which it has been offered)
Morning Bnc..... thank you for the links
Pinot
:0)
Hi SaveShare7
What an extremely balanced post.
Great to to see you posting.
Pinot
:0)
Hi Savshare
Nice to see you here matey.
Thanks for post ;o]
It does appear that CGP are on a pretty sticky wicket dont it!?!
R's
BN.c
ref oyu tolgoi
https://www.reuters.com/article/turquoisehill-ivanhoe/ivanhoe-mines-starts-trading-as-turquoise-hill-idUSL2E8J37CA20120808
I'll answer my own question - no Ivanhoe mines did not spin off it transformed into Turquoise Hill Resources the co owning Oyu Tolgoi......
BN.c I believe that Solgold either want to use the Alpala deposit to underpin and fund the start of a Copper/Gold Major (through using FCF to fund other discoveries) or to be taken out for a significant sum that makes all shareholders happy. Solgold could sell their stake in ENSA but I don't think they would do so UNLESS they were further down the line with another discovery (or 2) so they could demonstrate the value case of the company AND the price paid for ENSA was significant enough to warrant the sale.
Currently Solgold is Alpala - there is huge upside, but until it is proven up the analyst price targets and valuations put barely any value on the regional tenements. Therefore if Alpala is sold we have a lot of cash (which one would hope some would be returned to shareholders) and potential, but would need the drill bit to pump the price.
The main thing I believe ALL Solgold shareholders should be worried about is if CGP manage to replace the Solgold board (less likely now changes have been made).... CGP have not had a bid except from Solgold... I think they know that another bid is unlikely and are worried about funding their $400m CapEx in the next couple of years AND the largest shareholders have been in it for the takeover, not to become a mine developer.
Imagine this scenario.... CGP replace the Solgold board with people they put forward, i.e. their allies. What is to stop them increasing the CGP offer to "fair value" or to renegotiate the ENSA agreement removing such punitive clauses as the dilution to 0.5% NSR that Solgold can buy out for $3.5m if they don't contribute to CapEX....
That is why, if an EGM does materialise, then all shareholders should vote, in my opinion, to retain the current board.... But this is all my own opinion and all should DYOR of course GLA
What's to stop SOLG spinning off Alapala/Cascabel into a separate co [pretty much as CGP were supposedly gonna do]?
Is this what Ivanhoe Mines did with Oyu Tolgoi?
R's
BN.c