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Wow 45 tick ups CD , very impressive! I think i'll take note of your thoughts and hang out for a bit more then , north of a quid say , they can't all be wrong?!! ( although one is mine) Good to see a steady rise in the SP. Good weekend all.
@ CD and all - I have to say I don’t think I’ve seen anyone get anywhere near 30 “recommends” on a posting ( and yes, I’m in that 30) on LSE so that’s quite the achievement. Deservedly so. Spot on with all you said. Why I mention it is that it goes to show how supportive and positive many of us on here are about solg as we continue to tease ourselves to the mid 30’s Several of you on here know your shizz. Thank you to all that support, remain adult and act cordial to each other.
Isn't the defence against a 55p takeover just getting the SP to 55p? If it hits that level then anyone here who has been here for 10 years and would happily take 55p can sell up and head off to pastures new. And those of us who don't want to sell out that low and anyone buying in at that price will definitely not entertain a bid at 55p.
I agree an auction process could be great for SOLG and may well transpire. SOLG's folio and new country entry certainly deserves a premium. But lets not forget the perils of blockcaving. The risks involved. Add to this, ENSA / Alpala is 85% owned by SOLG and not 100% etc, so numbers should reflect that ownership basis. Porvenir and Rio on the otherhand are 100% owned and as such have more scope both financially and to interested parties.
At this early stage, it's sensible to be conservative but I can't deny that premium's are possible. But that all said, if the exploration plans go well then the premiums will come from the drill bit as well as any auction process. We need to prove up and show potential in as many licence blocks as possible and as we near June 2021... we are still some way from drilling Rio which is a puzzle. SOLG need to get a jog on and cash isn't a problem now. If we can get several rigs turning over the next 2 to 6 months, then I think the SP will be on a constant rise north albeit with the usual shakes/rattles and rolls.
Agreed, it's going to be interesting to watch what happens as we near 31p. My guess is that it will just disappear and you'll have a sudden frenzy as book reorders into smaller chunks. So effectively, they break it up rather than remove it. 1m blocks await at 32p onwards but my spidy senses are telling me that news is on it's way and next week looks likely. That said, I do think there is an element of waiting for Lasso's official commencement in couple of weeks time so when the good news flows (to the Ecuador people) it's from his new tenure.
It's not going to go for £10 a share. It might be worth £10 a share in years to come if it goes it alone etc but for a buyer to pay even just $5bln, they then need to pay another $5bln to get Alpala to export ready status. If profit levels are roughly $1bln per year (as suggested) then it's a 10 year payback on a project that involved block caving and that's too risky for majority of buyers and financiers out there. Hence why SOLG are now looking at a smaller higher grade phase 1 production plan. Based on lower capex and higher margins delivering payback in approx 4 years. Assuming that's $750m profits per year and capex of $3bln, that's close to 4 years payback and much more realistic. In that kind of scenario, the purchase price is still an issue as if you go for $2bln price tag on Alpala then it's a $5bln spend with approx 7 years before full pay back. And that's based on a duration of 12 years+ eg, Buy it for $2bln, then spend next 5 years building it to be export ready and then 7 years before you get all your money back. As an example in terms of cash conservation, BHP recently got their debt down to sub $10bln and have stated that they do not want to increase debt much beyond that level.
I'm a bull here. Very strong bull. But i'm also a businessman and I know 'value'. You always have to leave something for the next man. That all said.... SOLG is more than Alpala. Rio, Porvenir and rest of the folio could yield much better margins than Alpala's offering to date. So yes, you could say SOLG is worth alot more than the potential PEA on Alpala. Much more. Of course - playing the long game, Alpala is forecast to produce for 50 years. So on a capital return basis will deliver mega profits - no doubt about that. But in today's world, investments are rarely made based on 50 year projects. 5years tops these days.
Being conservative, I think $1.5bln to $2bln per Tier 1 project/licence is more likely. When the Porvenir MRE1 comes out, we'll know whether we are on track to be a 2 x Tier 1 asset holder. In that scenario, our takeover price becomes closer to $3bln to $4bln which is around 100p to 150p+ a share. A long way from £10! But for most on here 125p+ would be perfect. For the likes of covgaz et al, I think they'd be happy with 55p. And if Porvenir fails to deliver and Rio fails and the news is weaker going forwards then 55p might look a fair price. Plenty to do to ensure all involved see how our assets sparkle. And with the cash in the bank, I'm keen to see the company moving on fast and aggressively with the exploration plan outlined in the placing RNS. Lets get on with it!
Right now, this would really fire-up our Solgold! How long to wait? Speculation of both sides of the argument for an Alpala sale continues on this bb, wonder who is right, LOL! Optimists elsewhere, are mentioning £10/share, obviously if you were patient. Will this be Aussie vs Chinese to win the prize? One of very few Tier 1's on offer?