We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
And I did mess up. On checking, PI is future revenue / capex so the 2:1 ratio would allow total capex up to 4.5Bn. Knock off 2.9 for the mine build and that allows 1.8 to buy the scenery. 1.8 / 2.2 shares x 0.8 exchange rate comes out at 65p. I’m glad I don’t do this for a living, I’d have even more ulcers.
Ta Dinner. I’m tying myself up in knots with all the moving parts here but I keep coming back to 40-50p not being at all outrageous, 60p tops and that requires some credit for the factors you draw out, and an appetite for strategic geopolitics which any major PLC might struggle with internally if their head of risk is doing their job. And before anyone brands me as a de-ramper, im bloomin well gutted. But perhaps getting myself a bit more grounded for what may transpire.
Bozi
“This is why Mather has, begrudgingly in my view, succumbed to CGP, Maxit and Warren. Because the same was happening to him and he needed allies for the fight ahead”
The same was also happening to CGP so I think it was more a meeting of minds and a few egos had to be shelved in order for common sense to prevail.
The clear plan now is to monetise the asset and move on .
Addinct…. There is no benefit & NM has made clear many times over the years that a JV was not an option from his point of view. Bob Sangha and co clearly aren’t here to oversee a JV either …. It’s not “what they do”
Q, may I ask you again, why do you think a jv is such a good idea for us? I'm afraid I don't recall having seen a coherent and compelling argument from anyone with regards to this possible outcome. Nor do I see how it in any way achieves the stated ambition of Sangha &co.
FTJNY - The fact that BHP and NCM would be underwater on the averages of their own shareholdings is completely and utterly irrelevant. I really don't know why you and others are playing on this, almost using it as a comfort blanket.
After the merger completes, if SolGold issues the shares previously held by CGP to someone that isn't NCM or BHP, both parties drop to under 10%. They lose their influence in shareholder votes.
This is why Mather has, begrudgingly in my view, succumbed to CGP, Maxit and Warren. Because the same was happening to him and he needed allies for the fight ahead.
Now, should an offer come through from someone that isn't BHP or NCM they can both vote against it, but they'll be struggling to muster 20% between them. Add in a few disgruntled PIs who staunchly believe this would be worth more and they're probably closer to 25%. However, they'd be up against Mather and associates, CGP and potentially Jiangxi. They'd be on the wrong side of the fight.
By the way, I'm not necessarily talking about 40% from tomorrow. 40% from 25p takes us to 35p. A fast and smart 100% for Irwin and many PIs would cut and run at that price too given recent performance.
It's about time we started taking notice of the dynamics around us. BHP and NCM coming away from SolGold at a loss is not a factor here. They're multi billion pound companies and they'll make poor investments. It was on them to buy the open market and bring their average down.
Copperpot before AGM and after that's first thing ,second spot prices increasing massively,third interest in buying solgold has increased with Asia interest ,so indeed my prediction can be all over the place and vastly different but facts speak for themselves not fiction ,it's always imminent same with many other explorers which such huge resources proven up ,enough?, Please tell me if am wrong ,off walking now lovely up in the lakes today and around the bay ,fish and chips on the prom the order of the day ...and maybe a pint or two lol!!:):(
Just to round this off. The NPV aggregates all expenditure on, and income from the project, adjusting for inflation. Early years capital out, middle years mining the best, later years chasing what’s left with diminishing margins. One on the tools companies use to compare projects is a ‘profitability index’ where you divide the NPV of the project (basically the profit after costs adjusted back to year 0 values) divided by the up front capex to get it up and running. Ratios of 2-3 were expected in the firm I worked for. So we could be looking at a share price from Alpala derived from Alpala NPV / 2 = (project capex + asset purchase price). And having derived a theoretical asset purchase price, divide that by the number of Solgold shares in circulation. Anyone care to have a go at that sum if the logic stacks up. We can bicker over the assumptions and tune it up of course.
Ta quady. So in my head, the NPV shows an attractive investment. If the game is to sell this as a project for others to take forward, then somewhere in the calculation is a return on investment criteria for eg BHP, whoever, taking it on. So taking that into account, I wonder what the asset value of the well-defined, but undeveloped Alpala is to a major so they can still make an acceptable return. Price of raw material at the factory gate in a sense.
My last post was obviously regarding Cascabel/Alpala.
Morning Scrat you are quite right NPV's are used for measuring projects and NAV's for measuring companies.
However Alpala is a project and I think we forget how big a project.
We also have the build cost which i believe on the reduced mine size on the last PFS of 2.9 billion dollars with a payback of 3.8 years.
Again figures from memory, please correct me if I am wrong.
So to value Alpala in this way I believe is fully justified.
The infrastructure alone (water/electricity/paved roads/deep ports/altitude etc etc) must be worth (potentially) around 3-4 billion.
Taking into consideration all the above.....the majors will be salivating on the thought of J/V'ing with Solgold!
See you all next week.
Having not read these various business cases, I find myself wondering about the NPVs of a project in the context of long term risk. I’m sure they do some sensitivity analysis around the assumptions so there isn’t logically one NPV so much as an envelope of possibilities. And if you wanted to sell a proven up ore body and had a good grip on the life cycle costs, and the revenue earning potential, then you can estimate an NPV for the project. But I wouldn’t pay all that up front to buy it because of all the risks over decades. And I’d want to keep the profit too else why am I bothering. So whilst the project has an NPV which informs what it’s worth in many respects, I’m not sure you can just divide it by the number of Solgold shares in issue and go order your yacht / Tesla. Would it were so. Anyone know more about these things?
I am doing this from memory so if I am wrong would be grateful if someone could post correct figures.
The NPV for Alpala alone is 4.3 billion dollars.
At today's conversion rates this equates to 3.5 billion pounds.
That's more than one pound a share just for Alpala.
Morning Bubble, so it's back to £1.32???
Just before Christmas you were saying that you had revised your price to 50 odd pence.....you're all over the place.....lol. What has made you go back to £1.32? You've also been saying that a sale is imminent for 3 years now, are you still confident about the sale being imminent? Genuine questions.......just wondering why it was £1.32, then 50p and now back to £1.32? Some serious price predictions in a very short period of time buddy!
£1:32 I think the offer will be concluded ,just my opinion though ,I've said it for years so I'll stick with it let's see
You're half right FTJNY.
BHP paid 46 pence a share at one point.
The whole point to the diverse book argument is nobody is going to sell their holding for less than market value.
They will probably want a premium.
Even an opening bid of one pound a share doesn't give them that.
So ask yourself how does someone get control and a large portion of the profit from Alpala.
Answer is don't bid, but put up a substantial sum of money and JV with us.
As I have said before, this is now the most likely outcome looking at the evidence.
Pad , morning the assets the Chinese will be after far outweigh the price they might offer a bargain to them imho
Evening all. Just flicked through this weeks posts. Best one, sorry cant remember posters name, was about going to local supermarket and seeing bottle of booze called Cazcabal. Was it on special offer at ridiculously low price?? rather like our SP at the moment!
GLA
DK
Your post earlier claiming that a first bid by the Chinese would only be at a 30 to 40% premium on the SP completely forgets that such a bid would leave both BHP and NCM underwater based on the current SP! So unless your likening them to Turkeys voting for Xmas there isn’t a snowball in he££s chance of it being accepted! For this reason any opening bid without at least a 4 in front of it hasn’t got a Scooby and if it’s to get board approval it would need to be much higher!
Hey Bozi, thanks for reading my post, replying a bit late after watching United fianlly goe toe to toe with City and come out on top. Great day.
Whilst I take your point on the opening price of any bid and its potential to be 2.5 x the current sp, 44p would still leave most on here unimpressed. What does however remain true for all of us I'm sure, is our collective opinion that 17.68p drastically undervalues our asset and the true value is multiples of the current sp. I respect your viewpoint, but given everything I have researched and been briefed on solg over the last few years, like Rk, I'd rather have a fully committed position right now. Time will tell, however I'm happy with my current risk profile.
Now, time to watch the game all again on MOTD, best pour the wife another glass of wine!
Enjoy.
Interesting article on Chinese on the mining acquisitions trail including South America.
https://www.reuters.com/article/mining-gold-china-ma-idUSL5N2L02O1
I particularly like this quote:
“Chinese companies move quickly and have easier access to cash.
“It’s like being in an auction with someone who doesn’t really care if they pay double what it’s worth – they keep bidding,” the executive said”
And:
“State financing is one of China’s advantages in carrying out overseas acquisitions, Chifeng Gold said, adding that it believes the Bibiani mine was bought at a “fully competitive price”.
‘THEY KEEP BIDDING’”
Quady ,might get some news on Tandy soon then ,before end of month
Correct bubble the quote is too get another before Alpala.
My bet is Tandy as it's part of Cascabel and we have 50 million earmarked for Cascabel.
However the Banking feasibility study is for Alpala.
Not cascabel ,quote one other the other ..
Hi Bozi
You always ask reasonable questions in a reasonable way. The answer is that I don’t honestly know. No one does but I just don’t believe they’re along for the ride…. We have a huge asset that we are clearly incapable of taking to its maximum potential.
Someone will and we’ll all do ok .
We don’t agree on everything but you’ve always remained civil and hopefully the end game will benefit us all.