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Quady - you reinforce my point...Barrick (or another major) have the money to crack on with this project and could possibly even beat the 2025 start date! Ecuador wouldn't pass up the opportunity to get their cut earlier, I'm sure!
How long is it going to take SOLG to get their £2billion+ to get this ball rolling? How long is it going to take SOLG to put in place all the infrastructure to start a mine? A lot longer than a major could do it.
BHP and Newcrest are already operating in Ecuador. Seems to me that Solgold and NM have a very good relationship with the authorities and local people, and better than the big boys, but at the end of the day it will come down to money for the government. Good though it appears, I cannot envisage NM just having to pick up the phone to block a multi billion pound earner for the Ecuadorean government.
Copperpot - absolute mumbo jumbo....a minnow going to a government and telling them a takeover is 'unfair' ??
Ecuador couldn't give a toss who runs the mine as long as the owner tows the line and gives them their royalties. Complete jibberish asking a government to interfere!
Barrick would be a far more professional operator than SOLG, simply because they have previous experience in this area....SOLG doesn't.
Why does Solgold have so many subsidiaries?
I often mull it over!
Good afternoon allthatguff, in any country when an industry is considered key to the country, Governments step in, Nuclear in the UK, gas in Russia, Car manufacturing in the EU, and just try investing in China. Ecuador's key industry, is going to become mining. The licenses took time to acquire, as quite rightly, they were acquired by companies that meet all the government guidelines, and Solgold had to do that. A takeover would not just require compliance, the company that attempts to take over Solgold, would have to change its infrastructure to comply, it would have to bring into line HR policy, environmental policies, and have a plan to bring this to production by 2025, which is when Ecuador needs that money, to start paying back the 5 billion dollar loan, by the IMF. The government of the day, is going to demand this.
"the government will reluctantly have to step in!"
Based on what??
Complete mumbo jumbo, sorry.
meaningful, not meaning
Good afternoon Copperpot. This is a distinct possibility, what I think has been forgotten, is that this is Ecuador's first attempt at meaning legislation on mining, and is a partnership between the mining industry and government. Government has to bring the people with them, and Solgold must comply with all legislation, and sell the argument to the people. hence Jobs, in the offshoots , environmental credentials, and public persona. A bid from a multinational, disrupts all this. Also Solgold can build this faster than any major, because, of all the above mentioned. Let's not forget 4% of GDP for just Alpala to any country would be supported by the government.
It doesn't really matter how many hostile bids come in, in some ways! When the first hostile bid arrives in NM's in tray all he has to do is ask the government to put the blocks on it! The government have the power to do this. If you think about it, who has the lions share of acreage in Ecuador and why did they get It? They big boys may want Solgold, will the government allow it to happen. Think about it. People think Citi have been brought in to stop a low ball offer, they're there to stop a successful hostile bid. If they can't the government will reluctantly have to step in!
Thank you phattrader1, nicely summed up, to many interested parties, who will not co-operate, so only way is hostile bid, but price would be so high, so no bids. We go to production, unless we get a bid near to, or full value. even 1 pound a share would be a low ball bid, yes some PI's would sell out, but not the people, who through all the discussion know what this is worth.
To cut a long debate short -
3 way bidding war incoming. No way they will do a 3 way JV... Barrick aren’t even shareholders yet.
Argghhhh, sorry ToS1963, you talk about going hostile with a consortium, that's not going hostile. You cannot go hostile with a consortium. I have explained both scenarios below. Good luck.
To you also Optimusgold, I do see your point and others, and fully accept I may be wrong, and we may get brought out. Addicknt put forward a way it could happen some time ago, that I think was a possibility. Unsure if that is likely now, after the 1-1.5% offtake agreement with Franco. Good luck.
Sorry Quady, Surely it is going hostile unless the Solgold board support it. Additionally, they don’t need to buy out the other stakes first. That’s how a consortium works. It does matter how many PIs sell out, that’s the key to a consortium succeeding. When ABN Amro were bought out, it was jointly by RBS, Fortis and Santander, who went on to carve up that business between them. Yes .... I know that ended badly, but the principle remains.
Thanks Quady. It is an interesting debate. I just want to see us get full value one way or the other.
Best of luck to you and all.
Good morning Optimusgold, you are starting at the point it will be brought out, I am starting at the point, that we are going to production to obtain full value. It's the only way. You have to a certain extent, answered the question, If BHP or Barrick or anyone else, bids for Solgold, are the major holders of blocks of shares, going to sell cheap for 50 pence. It doesn't matter how many PI's sell out, Newcrest and the rest, know what they are holding and know the value of their holdings. They will not sale at 50 pence. Hence my argument, that they must go hostile, and that means a large bid, near to, or at full value. No one is going to pay that, so failing that we get a bid, we go to production.
Sorry ToS1963, you have contradicted yourself, you say I answer my own question by going hostile, please tell me how going hostile equates to a bid of 50 pence, that's not going hostile, also you say if Connerstone , BHP and Newcrest all work in concert, that would be a way to table a bid. How does that work. Even if Connerstone, and Newcrest sold their entire holdings to BHP, at the end of that, they would still need to table a bid. Yes consolidation of BHP's position would help in tabling a bid, but that hasn't happened, and is fantasy at the moment. If anyone is going to table a bid they need to buy out other entities in their entirety first, and build a position, so that a bid hostile or not could happen. If a hostile bid took place now, it would be in the realms of 1.50 - 2.00 pounds, not 50 pence.
Quady, I am not sure I understand your question. It seems to me that NM now has an unfriendly relationship with Newcrest and BHP. Together they represent 30%. Add in a potential couple of other significant shareholders and a hostile bid at 50 pence is not unrealistic in my view. I think it would represent a great failure of the project for small investors and for NM. But he clearly seems to have got them offside. I am also not sure why it is unrealistic to think that Newcrest and BHP would do a JV if it meant they could get ownership of Solgold's assets. BHP and RIO are major competitors but are in a JV in the major copper mine at Escondida. I think that NM will be trying very hard to keep competitive pressure on and hopefully to get some good drilling results to come in as soon as possible. I agree with you that the stagnation of the SP for a long time is a problem. We need it to break through a 40 to 50 p barrier and then have a bidding war.
You can just table a bid as I talk about, albeit unlikely to succeed without support. You do not need a concert group, or a consortium, but I agree you would probably need one. So as I have explained in earlier posts, if BHP, Newcrest and CGP work together... and especially if they can gain support from another stakeholder.... I think it would get through. Yes, 50p is far below true value, but the key here is that our SP in no way reflects that, and it is that fact alone which makes us very vulnerable to a low ball offer now. But yes, given NM position and holdings, it would indeed need to be hostile.
Quady.... I think you answer your own question towards the end of your post...... going hostile.
It’s worth remembering the Newcrest reaction back in 2018 when BaHP came on board.
BHP acquired a 6% stake in SolGold last month for US$59.2 million and increased it last week to 11.2% for a further $59.2 million.
Newcrest is the company's largest shareholder with a 14.5% stake.
Newcrest managing director Sandeep Biswas said BHP's move was no surprise, given it tried to enter a joint venture at SolGold's Cascabel project in 2016.
"If Cascabel develops to the extent we'd all like it to - we'll have to see whether it's going to get there - it's going to be a big mine with a lot of investing capex, so in relation to developing a mine in the future, there's no question there can be more than one company accommodated in terms of those developments," he told reporters today.
"To see BHP - a company of that quality - seeing what we see and choosing to invest, for us is a bit of a justification of what we saw back then.
"Our technology advantage in that area in terms of block caving and what we can bring to them will certainly help with whatever happens in the long-term development of that orebody."
Biswas would not be drawn on whether Newcrest preferred to operate any joint venture, given the early stage of the project.
"It's very, very early days to be talking about anything in relation to SolGold - we don't even have a PEA yet," he said.
Good morning ToS1963, you cannot just table a bid in the way you talk about. You need a concert group, where the other major shareholders, Tenstar, BlackRock, DGR, Newcrest , NM, and BHP, get together, and agree a price for which they will sale their shares, for that agreed price. Even if they could do that, a significant amount is held by NM, in one form or other. To just talble a bid of say 50 pence, with no agreement from a majority of the parties above, would be amatuerish, and would fail. Please could you explain, how such a bid could be tabled, bearing in mind recent events. One being, we can raise the money to go to production, so not a distressed sale. That we have acquired the money to drill and prove up, further sites. I have racked my brains and cannot put together a scenario, apart from going hostile, and offering near to, or full value. In which case it will be more than 50 pence per share.
I very much hope to be wrong here, and like all of you I dream of a £1+ takeover, and I also think that given time and good management, SOLG might eventually reach £3+ valuation once production kicks in.
However, before seeing £1 we need to see 50p and anything in between, and before seeing 50p we need some radical change in sentiment.
NM has surely managed to alienate any major, including those who invested in SOLG when SOLG went knocking on their door for funding.
Perhaps there has been a time, a year or two ago, when a major could have offered 60-80p and we would have all been happy. But now I expect the confrontation and game of egoes to escalate, to try and take SOLG out of NM's hands at the lowest possible price, and I expect scenarios like some that have been highlighted here, where realistically we might only get away with 40-60p, however much we dream of a higher price.
So just to keep it real, I think we need to see a clear indication that we can first break that price barrier before the £1+ can be dreamt of, and until then as PIs let's first come to terms with what our Plan B looks like.
Newmont and Barrick did one in Nevada last year!
I don’t think I’ve seen any mines where any Majors have a JV of any sort unless I am mistaken.
They all need exposure to copper and gold - and they will all fight for it imo. By then we will have carried on drilling at our other prospects and demand more.
But to me, I fully expect the first bid to come in even before the Franco $150m is signed off because that’s the cheapest way to buy SOLG with only Alpala drilled and nothing else.