SolGold Share Chat (SOLG)

Yes Quady - if you buy CGP you get the lot.........

obviously SOLG wont be a cash buyer as we know - they'd offer a shares in SOLG deal......which he's already put out there previously as you mention ;o]

r's
BN.c

Thank you TBTT, as like yourself, I am unsure, however what I believe, is NM is apparently bidding for Cornerstone as a whole, and issues Solgold shares for the company, picking up ENSA and the Solgold shares.

hi TigerByTheTail
that's very true indeed - very valid point.

hi Quady
that's only relevant on completion of the DFS (the purchase of CGP for $3mil - if they dont pay their share)
if someone or some parties were to make an offer for CGP, SLOG would be given the chance to counter offer based on right of first refusal......

Hi Quady!
I don't know the exact legal terms of the arrangement between Cornerstone and Solgold. That's probably inside information.
But my guess is that Solgold would need to match the terms of any potential offer - both for the 15% of Alpala and the Solgold shares. That would be typical.
Solgold just don't have the money to compete against a serious bid from a major. It's not even close. IMO, the first refusal condition is an empty formality.

Good afternoon TigerByTheTail, I am always unclear on this, but with first refusal, can Solgold match the bid, and deduct the share Cornerstone, is required to pay up, as whoever buys the ENSA part, surely they would need to cough up in the near future.

Hi Broke Novice!
First refusal really means very little in this case.
Say a predator offers £100m for Cornerstone's stake in Alpala and its SOLG shares? (I.e. Roughly 1.5 times CGP's current mcap).
How on earth are SOLG going to match that? They just don't have the money.

Sorry ssmith_trader, you say that we would have priced 80% of the value in, if this had been worth 3 billion. Let me remind you, we are at the PEA stage.

PEA= 10% of value
PFS= 30-40% of value
DFS= around 50% of value.

Rough figures, but pretty accurate, we are above 10% of value of 4.4 billion dollars NAV, which is the figure we should be using.

hi TBTT

interesting stuff & v logical, just for info, SOLG have first refusal re Cornerstone.

r's
BN.c

smithy

whats happening tomorrow?

also for info, SOLG has first refusal regarding any purchase of CGP!

R's
BN.c

Colonel, as I have said many times before on a DCF, today this is not worth $3bn, otherwise the market would have priced 80% of the value in already. It could be worth $3bn eventually given time. And of course this is when you get predators, when they do have the advantage of time and looking much further ahead because they have deep pocket and expertise. Two things that NM does not (he is not producer and one hire from NCM does not make the team that he needs). We can all agree this is way lower price wise than what it should be currently be priced at. I blame NM for that. I will of course take advantage of that, as and when I see price action dictate a change.. as I saw today. Tomorrow will be very telling. If NCM buy CGP' stake and then cooperate with BHP, then SOLG will not be taken out for much more than 80p (I'd expect a range between 50p-80p that is similar to a few brokers valuation of SOLG today). I can't see how NM can block that takeover. Can you?

Having floated the idea of a NC / BHP joint bid for SOLG today, it does occur to me that another scenario may be possible. That is:
Newcrest have withdrawn their director from SOLG as they have received an indicative bid for their shareholding (at a satisfactory price) from another major (possibly Barrick, but not certainly).
Whatever is going on behind the scenes, the first thing any potential buyer of SOLG will want to do is to take out Cornerstone's 15% share of Alpala and their shares in Solgold. Putting that together with NC's shares would give the potential buyer the right launch pad for a bid. So that's the next piece of news if I'm reading this right.
Obviously, any outside bidder would be looking to reach terms with BHP as well. Nobody wants to get into a bidding war if it can be avoided.
Personally, I don't see how Solgold can defend themselves against a takeover, given where we are now. I suppose the best hope is some absolutely stunning drill results from one of the new targets. But the "game" will get away from them very quickly now, and I don't think any results can come in time.

ssmith_trader

the raise wasn't done well you say?

they raised far far more than they set out to

they offered pi's the opportunity to get involved again

they did not go to NCM & BHP as did not wish to give them more of a stake in the co (which NM has stated several times)

have you thought that for example, it might have been a favourable market to obtain/secure funding - when it may not be so easy in the future possibly - maybe citigroup advised to a) take advantage of the opportunity available, & b) bolster the share register more in favour of the SOLG/NM side

R's
BN.c

ssmith_trader,

You seem to take a very 'present view' of the share price. You can't make assumptions based on small macro sp movements and then align it to the company's progress. The share price is just tool to get buyers and sellers exchanged. Deals can take place at 19p levels as per recently or at late 20's as seen recently. The share price is not really a benchmark to base the business or achievements on. The Franco deal is a better example. That's $100m in cash for just a tiny fraction of Alpala gold. That deal alone values the asset at near $3bln.

That's why NM did the deal because he's fed up with the lazy and poor market at delivering share price alignment to asset values.

They usually align when PFS arrived and get much much closer to each other when DFS arrives and in a few cases can get closers still when a buyer for the asset arrives.

Remember, Alpala is just once licence block proven up. And that's $3bln+ (and still discounted). And then there's the other 13 opportunities...

The share price is largely irrelevant at these levels and only becomes something worthy of business/asset valuation when it nudges up to 45p again.

“Certainly the safe-haven buying is coming through fairly strong, with the fresh outbreak of coronavirus in the US, in particular, really driving that investor appetite at the moment,” said ANZ analyst Daniel Hynes.

GLA LTH Should help SOLG if any Bid materialises over the coming months ahead

Good afternoon RedKnight1, the article you posted, says Cascabel, will be operating in 2021, I wonder what they mean by operating ?

BNC that's my point. It will take time for the drilling results to come back. I'm not sure he has time on his side, to keep SOLG under his control. NM is obviously talking his own book when he says NCM and BHP were not offered. More likely they refused to. The raise wasn't done well. NO other institutional institutional investor got involved. The only one we know of (and were eagerly waiting to hear from) was NM himself, through his own company. Was there others? I was definitely expecting someone else besides his own holding company to the 'institutional' investor. Ben saying for a while.. NM has to go. The last few webinars was to ramp the stock up. He got asked many times as to whether their would be a need for another raise and he said no at all those times. Not cricket in my book...

ssmith-trader

how can they deliver drill results when the country has only just begun to open and SLOG have as soon as poss, started to mobilise drilling rigs to various locations! I dont expect anything re drill results for at least 1 month from now and possibly longer......it takes time to drill and then time to release resulting assays............

NCM & BHP were not offered to take part in the last fund raise - NM did not want to issue them any more equity than they already have - which I'm sure he has explained several times in recent interviews - I've heard it at least twice

r's
BN.c

Threatening to move past $1780 per ounce in July, with economies around the world struggling with Debt, Gold is becoming the go to safe haven.

GLA LTH Great news for SOLG , right time right place

Not sure how you can make a big bold statement like that and say that NM has outplayed NCM... just look at the share price of SOLG. It's also not as if NM has come back with more positive drilling results. If anything, NCM have played it well. They didn't take part in the placing (unlike a few shareholders here) and the share price is STILL lower than 21.5... and if true they'll be getting a bigger shareholding through Cornerstone and be able to stick it to NM.

Don’t forget the Chinese looking for strategic copper purchase and South America effectively extends the Silk Road around the world. Also politically makes sense as they can work with centre right group and shower with gold or leftist group And shower with shxx. The one thing with the Chinese is any offer will be rubbery.

redknight1,

It might be widely documented but I'm afraid that doesn't make it factual or credible unless there is a company statement or comment made. And in the case of NCM... we have plenty of comments and toys out of prams. But where BHP are concerned, nothing has been said by the company or anyone connected with the company.

There is no substitute for poor journalism and there's plenty of it out there but I can assure you that BHP have zero to do with any journo's stories. If you can find one of these widely documented BHP statements... then please post it otherwise be careful of assuming article are correct when they are not backed up by facts etc.

NCM... absolutely... they have ben out played by NM. BHP... well we will have to see but at least SOLG as a company is heading into October 2020 as strong as it possible could under the circumstances and global covid backdrop.

I'm bid 20.6 for 100,000...

phat...its widely documented that both BHP and NCM told SOLG not to go down the funding route they are currently pursuing, insisting that they should use equity instead...

So I think your suggestion is unlikely...

My personal view remains the same...this is one giant game of 'chicken'...the first mover will not get SOLG unless with a 'knockout' bid. When you look at the stats about the scale of `Cascabel alone, let alone the 72 other projects and 5/6 which could be bigger than Alpala, a knockout bid would need to be around 125p...

I think a rumour of a starter bid at 48p by Barrick makes a lot of sense...how many counters will depend on any discussions Barrick has had with the major players. Frankly SOLG makes the most sense to Barrixck who openly want to become a copper/gold player...

AIMHO as usual...

BHP has no current JVs with NCM:

"The portfolio of joint ventures includes Antamina (copper mine in Peru), Cerrejon (coal mine in Colombia), Nimba (iron ore project in Guinea), Resolution (copper project in United States of America), Samarco (iron ore mine in Brazil) as well as the Renova Foundation (designed to remediate damages caused by the Fundao Dam breach in Brazil).

We partner with Anglo American, Glencore, Mitsubishi, Newmont, Rio Tinto, Teck and Vale."

Newcrest: GGP; Harmony; Antipa; Imperial Metals; Encounter;

Barrick: Newmont; Saudi Arabian Mining. Barrick dropped their bid for Newmont to JV with them in Nevada...

Meanwhile...

https://www.thebusinessyear.com/ecuador-mining-boom-promises-big-rewards/focus

"According to government officials, by 2021, the mining industry could represent up to 4% of the country's GDP, up from 1.6% in 2018.
In order to make that possible, the Moreno government has had to attract development partners in the Western world. The Australian SolGold, in particular, has a mighty job on its hands. It is tasked with developing Cascabel, located to the North of the capital Quito.
At 20.3 million ounces of gold, 84.5 million ounces of silver and more than 9.5 million tons of copper, Cascabel, which should start operating by 2021, will be the biggest silver mine, the third biggest gold mine and the sixth biggest copper mine in the world, which speaks loads for the country's potential and a mineral exporter."

Yes but they can approach the company for reasons other than takeover - for example “we would like to carry out due diligence on Alpala to help fund the remaining $700m” and if that’s the case then just like we weren’t told about FrancoNevada starting due diligence we are not going to be told about Barrick or BHP.

Something is happening. The clues are all there.