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With regard to NCM spitting their dummy out of the pram, a tad unprofessional really to say the least as NM’s response qualifies his decision for share holders.
Could all be sort of the game plan of course, despite what many believe I don’t think NCM have finished with Cascabel and SOLG, time will tell.
BHP of course kept stum as they are well aware of what’s going on.
Anghol,thats good news for ecudorian government ,they need miners to kivk start the economy,oils in decline
Ecuador reaches provisional debt deal with bondholders. Taking the squeeze off for a while perhaps?
That’s not a risk that’s an advantage as fiat currencies become worthless and gold becomes the reserve not worthless promissory notes. The first move in a much bigger game. We will know very shortly if Newcrest want to stick or twist, this I think will be the biggest single factor in the share price. Let’s all hope it’s stick
With the size of capex there’s always a risk building it. But obviously the NPV means you probably take on that risk.
Just seen the article, interesting. Can they bid at this stage? Against the size of their company a holding worth £40m doesn’t seem worth making much of a fuss about, if you didn’t want to be involved you’d probably just leave it as a sleeper position.
Yes but at the same time you have to realise how rare and valuable these assets are
Of course there is risk, however the robust nature of NM’s technical info to date puts us in a great place.
I agree we prob will need the BFS before putting up a couple of billion to buy us, that’s why this Franco deal is even more impressive as obviously they did their due diligence.
The only risk is a global market collapse...
Remember there are at least six other projects that "could be as big as Alpala"...at least two of those being drilled right now have outcrops...easier to sample...
Alpala alone would be the biggest silver mine; 3rd biggest gold mine; and 6th biggest copper mine in the world...
Be patient....fireworks may start tomorrow after these 'M&A' articles.....
It's also the case that the capex here is large for any company despite the NPV so you would rather have total certainty on the asset (again via DFS etc) before you build. The risk is not the fee to buy SOLG, it's the offchance something is missed and the capex is much more than expected etc etc
Earthling - I don't know the asset well enough to say if there's any asset specific (or of course Ecuador) reasons. Broadly they would want it to get to BFS stage and then buy. I.e. if the NPV is £2bn or whatever, doesn't really matter to them whether the market cap is 30% higher post DFS.
This looks to me like a real asset hence I'm invested, but there's also the case that sometimes these projects are more trouble than they're worth and never going to go anywhere (ie PIs view is v diff to industry). The UK potash co (stupidly I can't remember its name was one of those), Kenmare had a £2bn+ valuation at one stage but most in the industry knew that Ilmenite was way over-valued at those levels hence never bought it. (although actually I just bought it myself at these levels)
Quady... agree, he didn’t require board approval, but classier to seek it. It’s a little insight into his management style perhaps.
Good afternoon ToS1963, I disagree he didn't require board approval, he already has it. He hasn't repeated anything different from the Solgold position.
Yes good point, what I meant was we see the big players being bought by bigger players. Why would they allow a minnow/ new kid on the block to keep the lot in Ecuador? Knowing it’s likely Ecuador will hold even better than Cascabel. They could be waiting to see what else we find like the pick of the crop possibly through a JV at another project or using the same model as Cascabel.?
If we do take this all the way it will some achievement indeed.
Let’s see if the Franco deal goes through which will put us in a strong position with regard to fighting off bids but It won’t be easy at all to develop such a huge mine. We will need the expertise and experience of the majors.
It’s clear we have a good relationship there re sustainability but I’m still not convinced yet we will be able to go all the way.
Guess we will know by the end of this year.
I am happy with the Franco Nevada deal, far preferable I believe to the a Newcrest proposal, which I believe in the long run would be more dilutive to PIs, therefore agree with Nicks categoric response. My concern would be around the speed of it. It shows two things to me... firstly, he is concerned enough to reply at all, but secondly, his response cannot have been approved at board level, or by Citi.. There just wasn’t time. To my mind it would have been far more telling to issue a formal response tomorrow or Thursday via and approved by the board (probably saying much the same though). It’s a bit classier, and doesn’t make it look like a Newcrest are getting under your skin. Seen many times on here that he’s playing a blinder.... I for one don’t think he is. On the other hand, I suspect if anyone is playing a blinder here.... it’s BHP. We keep hearing Newcrest, then Cornerstone, then NM bleating and braying and sniping at each other.... that appears to me as though none of them are focussed on getting on with business.... BHP on the other hand..... not a dicky bird.
They don't care about competition as such, copper is a commodity it's not like SOLG are going to sell it at 50% of spot price into the market. A functional project this size is a suitable growth asset for a major, which is a different matter/motivation. I think the level of holdings the CEO has here is v reassuring, incl. £200k last placing. He's eventually gonna do the sensible thing, whatever it is.
Why would the majors allow us to go to production. Potentially being the next gold/copper player and thereby creating more competition for themselves?
I’m not saying. NM won’t put up a decent challenge but it’s unlikely one company alone will be in charge if you look at the other biggest mines in the world.
Barrick, BHP and NCM still the hot favs at this point.
Good solid response from Nick, Newcrest wanted to fund us and at the same time dilute us PI’s - clearly evident in Nicks short yet effective response
“The funding ... to get to a development decision at Alpala will be mainly done using the Franco royalty deal because it is considerably less dilutive to all shareholders than deeply discounted equity proposals mooted by Newcrest,” SolGold Chief Executive Nick Mather said in an email to Reuters.
Deeply discounted ........if you’re leaving Newcrest close the door on the way out ......I’m happy with the Franco deal thank you very much
Thoughts on why the Canadian market hasn’t reacted to this news from NCM?
Can't argue with that phattrader, NM is consistent. Thank you.
any ideas how this would play out if major shareholders did manage to oust Nick?
Are we looking at an appointment from outside Solg, is that even possible?
NICK HAS RESPONDED
HE CAN’T SLEEP
BNamericas: What do you expect for Cascabel between now and the end of the year?
Taunton: To finish the prefeasibility study and start with the definitive feasibility study.
We’re starting conversations with state electric company Celec because we’re going to need a lot of energy. We’re also talking with the port of Esmeraldas to understand the maximum size of the ships that will carry the concentrate, among other things.
BNamericas: What’s your perspective of mining in Ecuador and the place it will occupy in the region?
Taunton: The prospects are very positive. What they have found in Peru exists in Ecuador. What they have found in Chile also exists in Ecuador.
So far Ecuador is one of the few countries in the Pacific Rim that has not developed its mining industry. Along with five other projects, Cascabel will change the environment of Ecuadoran mining, with a strict focus on doing things in a responsible way. I’m speaking of all the companies and, fundamentally, ours.
BNamericas: What does Ecuador need to develop its mining sector?
Taunton: That the current government aligns with that objective, that it empowers the industry with speeding up permits, with more efficient procedures that understand that mining is going to be an engine of the economy.
The reason the country has not developed deposits to date is because it has not been a priority for governments of previous decades.
We have recently seen a recognition of mining as an important contributor to the country's economy. I believe that in the future the doors will be opened a little more to develop exploration, so that deposits such as Cascabel are found. There’s no doubt that there are many Cascabels.
BNamericas: What stage is Cascabel at?
Taunton: We’re in the prefeasibility study, finalizing the details of the economic analysis. We have the potential designs of how to get to the deposit, which will be underground, and how to process once the mineralized rock is on the surface. There are several options for the processing plant.
The final feasibility study, the final design, which includes the mine, transportation and the way of processing, is expected to start in late 2020. We hope to finish it by the end of 2021. Before starting construction we must have the final designs, approval of the environmental impact study and negotiate a mining contract with the State. Once we have those three things, we can start construction.
The mine is due to have a life of 50 years.
BNamericas: So when do you actually plan to start construction at Cascabel?
Taunton: If all goes well, we start with construction in 2022.
BNamericas: How much has SolGold invested in Ecuador so far and how much will you invest in construction?
Taunton: Since 2012, when the company entered Ecuador, we have invested approximately US$170mn. By the end of the feasibility study we will probably have reached US$300mn.
We will probably invest US$2.8bn in construction before producing the first copper or silver.
BNamericas: What will be the construction schedule and what facilities are contemplated?
Taunton: Construction will take almost three years. That is, the first results in concentrate will be in 2025.
In general terms, it will consist of an underground mine and the surface processing plant, where we’ll produce copper, gold and silver concentrate that will be sent abroad for refining, because in Ecuador it’s not possible to process the copper that leaves the mine’s beneficiation plants. It will also have a water treatment and waste management system, and internal road, air and port infrastructure, among others.
We have not yet decided where we’ll refine. There are many options, there are many interested, because it’s very clean mineralization.
BNamericas: How important is Cascabel to SolGold?
Taunton: It’s the jewel in the crown. At Cascabel we have approximately three times the copper of the Mirador mine [of Ecuacorriente] and three times the gold of [Lundin Gold’s] Fruta del Norte.
Additionally, we have 100Moz of silver. That’s why Cascabel is ranked third or fourth in the world for its quality, its in situ value.
BNamericas: What will Cascabel's operating expenses be and how many workers will it need?
Taunton: Operational spending will exceed US$25bn over the life of the mine, including the labor side and the local purchasing component. A significant part of that opex stays in Ecuador, since among our objectives is the transfer of technology and know-how to Ecuadoran groups.
In the construction phase we will need more than 3,000 people, plus indirect workers, obviously. For the operation there could be up to 2,000 people.
Looks like Jason Ward had acquired 116,279 shares today, unsure if awarded or he paid money.
NCM are block cave specialists and they have a proven success rate. They would eb an asset to someone like BHP or Barrick. I agree entirely that any Major like BHP or Barrick would be more than happy to have NCM on board in terms of an equity interest but also as part of the 'Ecuador country makers' that the region/nation is in desperate need of. NM wants to be the BHP of Ecuador but the reality is, Ecuador can have the real thing rather than the wannabe pretender. But first BHP/Barrock/NCM have to get through at least 65% of shareholders. Not easy.
Many thanks Smikster