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Zoros the one thing I can tell you is the strategic review will not be to sell the company.
The reason for this is it's to increase shareholder value.
If you sell it, you have nothing to increase its value.
Monte:
"...They constantly talk of future exploration and value adding just like they talk about becoming miners.
The truth is solg is a poorly run company with low quality management.
Hopefully the strategic review will enlighten the board into excepting this fact and the best way forward is to sell the whole company to someone who can take it further. Mission accomplished.
Much as I dislike Mathers attitude - he is an inveterate professional. I believe he is making a come back with the support of his nemesis: CGP they will now work together to clear the way for either some JV activity or a sale.
Solg has lost its way and its drive. Too much politics behind the scenes debilitating its every move. Clean out the rubbish and make way for a mercenary approach.
DGR/CGP are now running Solg.
Z
Now look, that's not nice sean
Exactly Not2sure.
You are stating the company position.
It is nice to see NM back in control lol as if he ever went away .. he once said Cascabel would be sold at the right price..if not they would take it to production so nothing has changed there at the moment..as far as the financing was concerned I am sure the 2 big boys were given the chance but at a certain sp which they turned down and NM sorted it in his own inimitable way !! and they did not like it lol..well they should have paid fair value then otherwise NM will source the finance elsewhere which he is very good at
SP very resilient at this level.
Looks like rather than the fundraiser it's the dumping of the CEO that has rerated us from 16p to 18p.
Bodes well.
TBH when I read that DGR note, I got the feeling NM was warming up the other DGR shareholders for their company to be taking on some of the SOLG prospects and proving them up SOLG (or more likely NM) style. He appeared to be taking full credit for their modus and results.
Fort - re your 8:57 post
Why would SolGold distribute close to the full sale consideration upon an exit of Cascabel only to then go and raise funds for exploration?
That is possibly one of the most absurd suggestions I've heard this year, if not ever, and I say that in all seriousness given we've seen a few things differently of late.
If you're going to give regular commentary for the benefit of others, and some of it clearly is of benefit to others, then you'd acknowledge that SolGold could be expected to distribute somewhere between 30-50% of the consideration to shareholders - basically a fairly standard dividend policy. Personal opinion is they'd land close to 50% because the optics of the lower end of the scale don't look fantastic but you can bet your last shilling that the company would retain 50% of the cash paid.
The challenge then for management, as a cash rich junior explorer again, is to control treasury tightly but ensuring that Porvenir gets an allocation to bring that to PFS, DFS etc and have a pot from which the 4 subsidiaries can all operate on the highest priority projects.
I'd imagine budget could be in the region of $100m per year with many work streams in parallel so on the assumption Cascabel is sold for $400m we have a couple of years runway before we then have to process the next cab off the rank.
AROK1975 that is the one thing they haven't said.
Think about it the statement is to increase shareholder value. It doesn't say over what period of time.
Getting the updated PFS on Alpala and continuing to DFS increases shareholder value.
Getting a PEA for Porvenir increases shareholder value as we have a stated NPV for Porvenir.
Partnering other tenements increases shareholder value, and bringing Alpala to production increases shareholder value the most.
We hopefully don't have long to wait. A bit more patience required.
Strategic review means scrap the "progressing to production" nonsense - small fish in a big pond and, We are not immortal and nor are NM and co....monetise the darn thing, all or parts of it. I know they are listening....saga continues !
GLA
sire_frugalman,
That would make sense and be a cleaner solution for all. But for Mather to sign up to that and to be working with CGP, I can only assume that Mather has been promised something that ensures he continues exploration. Now that might be a new company?? Let's call it MatherGold for fun. SOLG gets sold but prior to sale, a bundle (let's call it a package lol!) of licence blocks get sold or moved over to MatherGold Inc. Lets face it, if the market and future buyer out there is not going to price much in for those blocks, then it's not cost much more than prob $10m or $15m at best for MatherGold Inc to acquire various blocks. Let's face it... some could be relinquished soon anyway. Would not surprise me to see MatherGold Inc then do the rinse and repeat process. In effect, it's Mather doing what Mather does best. It's a new SOLG with old SOLG licence blocks lol! I doubt it will fall under insider scrutiny as most blocks are not explored and just rock chips. Acquisition costs 5 years ago were minor etc.
So yes... a full sale could still be possible but the way Mather is talking... he's sees growth being restored to shareholders through exploration. That's clear.
Perhaps the Swiss entity set up a while ago is the way out for the CGP boys or the other way around... the way to park the new ongoing business?
Lots to think about here but that DGR note tells you all you need to know about Mather and Ecuador. He's not done exploring. Not at all.
Lunchmoney, agree the $430m+ commitment across those 60 licence blocks is not required tomorrow or next year etc. Or at all. They can relinquish them like they did with the 10 blocks of late. I'm merely using the guide by the company of the commitments based on those current 60 licences. You'd have to go back to the previous RNS on relinquishing the 10 blocks to see the finer details. I've crudely divided the $430m Capex number by 60 to arrive at a broad stroke $7m to $7.5m spend per block.
We know they have been looking to partner up on many of the blocks (grass root level) and doing rock chip sampling all this year. We even had the 'package' comment from one SOLG member of staff alluding to the fact that they are trying to divide the folio up or get a nice basket of licence blocks together to suit interested parties needs.
What we don't know is the outcome on that. But my gut says we are moving to a more CGP style process of getting others to pay and do the leg work on many of these blocks and we retain a 20% or 25% interest. Better than giving them back isn't it!!?
Thanks again for your pointers, really appreciate your views.
Agree all concessions under review
Seanhunter,
That's the way to go for sure but the model of exploring, derisking and then selling on as yet to be proven as a success. The market will buy into that strategy if or when SOLG sell ENSA. So I think that's what we should expect.
Some will then ask how much of the ENSA proceeds will be distributed to shareholders? All of it I would hope. They can then go to market and raise capital as before $50m+ and go and find another Alpala.
My only issue is understanding how they return that ENSA cash to shareholders. Does it get distributed through a special divi? That's not great for tax efficiency by any means.
The rinse and repeat strategy going forwards can only work or get the markets attention if they commit to selling earlier in the cycle. Basically, get the discoveries to MRE2 and PEA but flog it before PFS. Yes you get less bucks in the pocket as someone else carries the risk on pre-development but you get quick bucks! I'd be more than happy to remain invested over the longer term (next 10 years) if SOLG can deliver 3 or 4 cabs off the rank within that time frame and each going for £1bln+.
Based on Mather's recent comments, I think ENSA sale inevitable and exploration to kick off possibly as early as 2023. The sooner they get drilling again the better. But you need cash to do it and we don't have any at the moment for non ENSA projects but there's always a chance of JV's and partner deals (remember the grass root 'package' comment some months ago??!
Bubble NM has said eventually DGR'S shares would be sold.
He does not want a sale of Cascabel, quite the opposite.
As I said we are talking about partners.
This strategic review won't be just about Cascabel, it involves all our concessions.
Quady possible on other tenaments nit cascabel I think but nm might want a full sale tbh
May I remind people of everything we read yesterday.
Nowhere does it even suggest selling anything.
I keep seeing the word partner.
Monte don't disagree there it's exactly what I'm does with an explorer imho,so onto the sale
Well done stack.
They constantly talk of future exploration and value adding just like they talk about becoming miners.
The truth is solg is a poorly run company with low quality management.
Hopefully the strategic review will enlighten the board into excepting this fact and the best way forward is to sell the whole company to someone who can take it further. Mission accomplished. I'm pretty sure that's what irvin and crew have been told.
Fortissimo - Warren was asked on Twitter about sale meant cascabel or what and he replied SOLG.
How much influence will Mather have on the strategic review, As a NED?
I think ot will come up with a clear for sale sign. Just ask the cornerstone boys who jumped on the merger this time around.
I think a lot can lost in translation (lol!) but the CGP bunch basically owned 15% of ENSA and 6.7% of SOLG. So when Irwin says SOLG sold etc I think he's broadly implying a sale of the main asset - ENSA. Let's face it, he's right... the market values SOLG's folio (outside ENSA) at zero. So SOLG is ENSA and ENSA is SOLG. But... as we all know there are other opportunities in the folio and majority have a minimum $7.5m spend. Porvenir is advanced and may well be sold on or JV'd in future.
Cash to 'explore' will come from ENSA sale. No doubt about that. But how do the CGP exit or get their cash out?? By selling their 18.5% stake in SOLG to whom??
It's a puzzle but I think Mather is not done here and does not want to see SOLG sold lock stock and barrel. He wants to rinse and repeat. He's right, growth does lie ahead via exploration and discovery. Find another 2 or 3 Alpala's and that's going to make ENSA look like a starter on a 4 course meal.
Going to be fascinating to see how this unfolds. But one thing is sure, the share price should be doing very well indeed whether that be through ENSA sale or future exploration success.
There will be plenty of ops for people to exit I'm sure.
Apologies, I did not see that Fort had covered this off before I responded. Agree Fort.
Paul thanks for sharing this. Interesting to read Mather's comments - it very much looks like the plan is to go back to the SOLG of old and start exploring again. Only problem is we don't have any cash to do so (it specifies the Osisko royalty deal is to be used at Cascabel).
So are we going to sell Cascabel and rinse and repeat across the rest of the portfolio? That is not what Irwin and I imagine the other CGP lot want to see - they want the whole company sold.