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I would prefer the $150m comes from offtake stream finance rather than equity placing. That said, if you assume £120m placed at say 20p, then that's 600m shares with roughly 2.4bln in issue. If goes to Barrick, then you have Barrick holding 25%. If split amongst Barrick, Newcrest and BHP then possible you could get 3 equal 20% holders. And that's an interesting scenario. I doubt it will play like that as think BHP are keen to see moderate equity dilution ahead of potential bid phase in Q3/Q4.
Then there's the question over 'assets'. Blanca and rest of folio has to be outside of any Alpala deal and as such would a bid fro just Alpala/Casabel constitute breaking takeover rules and force bidders to pitch for entire business???
Cornerstones 15% stake is important as if it comes back to SOLG, then 100% asset ownership should offset most of the dilution. Finally, I actually think BHP would be happier with a scenario whereby they are 40% stakeholder along with another 30% or 40% holder like Barrick or Gina and co etc. I don't think BHP want the full 100% risk on the books at this current time. Partnering with other majors also opens the door to future licence deals and creates a mini monopoly assuming good relations with Ecuador Gov. Eg... shuts the door on the Chinese!
Good afternoon Jerry, I never said there will be a standstill agreement extended, I suggested because of all the holdups, NM would like one, I agree this is a problem for Solgold if we cant get the 150 million agreed by October, but I feel that we will.
Good summary ColonelDrake - I agree BHP has only 5 months to show their hands, it would play in our favor if we have funding sorted out and Packaga greed. NM can say to BHP pay top notch price if you want this world class asset.
I think Rio, Barrick , Gina and Han**** might be a good option as well. I hope the initial offers start coming soon then in Oct. We should currently be on 50p not 20p. First one might take us to 50 P and NM might have a price in his head.
If Newcrest are having a tough time what happens if BHP buy their shares? What % do they need for an outright takeover?. Be safe Ned
Hi Quady and everyone. No way will BHP have another standstill agreement. Why would they? They are patiently waiting in the wings hoping that not too much happens in next 6 months. NC on the other hand, I think, are wishing they could have their money back and move on.
I can see this getting a lower and lower risk, but I am not sure who is going to be such a large buyer of the shares that they re rate to anywhere near the NPV. How many shares need to be bought to get this to (say) 30p? 300million?
looking at how the sp behaved a few days back, I think the 'market' and the controllers are keen to see this remain under 21.5p. Through that level and it could retest 24p again. Through that and it's 32p land again.
If BHP have slices of solgold at 22p and 45p levels then there's no way Barrick or any other large miner is going to get a look in at sub 30p. BHP carried some decent risk at 45p placing and no surprise to see NM balance things out with Newcrest so both hold around 15% now. That last 22p placing was a tidy up and leveller for all involved but it wasn't really 'investing' in the PFS... that's still to come and will be based around the MRE3 which was approx 30% better than MRE2, something the market has been slow to react too considering BHP invested at 45p with MRE2 as benchmark.
For the record... any deals that SOLG do with asians will not be liked by BHP. Other deals can be absorbed by BHP if they eventually make NM an offer he can't refuse. But involving the chinese is potentially a big issue for BHP as these guys will rise the coat tails and not play ball with BHP's demands further down the line.
So the way I read it is the same as before... NM is putting things in place that ensures any bid rounds that come in from October onwards between BHP, Barrick, Newcrest, Glencore, Anglo and others will need to be top wack otherwise, it's going to the chinese and the smelters/traders.
The article hints that there may be delays to the previous PEA/DFS or PFS. Most knew this would be the case due to Corona but this actually plays into BHP's hands and in 5 months time they can strike like a cobra. So NM is getting prepared with a workable plan B just in case BHP fancy trying a low ball. It's standard stuff ahead of offer talks. That all said, my only worry near term is that this could be the last potential 'mates rates' opportunity for management to buy stock in a cheap placing. Who cares if it ends up with a 22p equity portion involved if the share price eventually goes for 75p+.
Greed normally prevails.. which means if a cheap equity portion is done, then you know (really know) that NM is looking for a sale come Q4. Assuming he takes some shares of course... which we all know he will.
The starting gun goes as soon as the $150m is placed or finalised via takeoff deals. Incidentally, this all seesm to be nicely timed as Ecuador nears its new mining policy reveal which is expected to be more pro mining than June 2019.
Buy the dips as they say. Like sherbet, this ones going to fizz.
Thanks KB07, good stuff.
I hope this good news will settle the market doubts and pave a clear path . I still hope we should get a bid to excite the interest of the market and free BHP from the clause.
My Guess is anything less then 50 P would not be welcoming for cascable alone. It's the starting price . I still believe we could get around 3- 5 Billion for Cascable.
I wonder how the market will react monday.
Be safe Ned
Would I be happy for a 22p raise....yes if the right company was involved i.e top 10 gold company, with management and BHP taking part....I even said on here I would be happy for Berwick at 25p.I
It matters of the shares are going to drop in the market short turn but they won't imo.
Does it really matter if the NPV goes from 130p to 118p if say Berwick comes in at 25p or 124p if they come in at 35p?
Most of the share drop occurred in summer (sp hit 22p in august). The fund raise was the end of nov. The share price wasn't hammered for the share issue, it was to do with macro Ecuador reasons, copper price falls, mining cycle for cascabel and wider mining market (falls in mining funds)...
Solg is damned if it raises many net when it doesn't need to and damned when it does..
At the end of the day it's what explorers do....they raise money to add and aid exploration.
I agree with iceberg, the last fundraise was necessary for the short term and astutely done with BHP. The forthcoming finance agreement will be substantial and apparently it's going to be concluded well within planned timescales. I've always been of the opinion that financial certainty would give the sp a boost.
Good morning allthatguff, sorry didn't understand your posting, may I ask the reasons that you think the next issue of shares will be at 22 pence. Personally and I could have this wrong, if we issue new shares, it will be a small amount, as the funding is from offtake agreements.
Was a last minute stuff up, got hammered down from previous levels . So you will be happy at as well if the next placing is at handsome premium of 22p?? I thought not..
That fund raise was almost perfect.
Above the then price.
Shares with a lock in agreement to an strategic company to ensure no low ball offer giving them 15%.
Shares to bhp, as blue chip a miner as exists in the world.
Just enough funding to take solg through to now when a bigger less dilution option can be taken based on measured resources in a MRE
Let's hope this funding round us better handled than last November's debacle. Otherwise further diluted to hell and back.
Backfoot not backdoor.
Good morning Jerry, in agreement with your statement. This is not about Newcrest or BHP. Yes they are an important part as jointly they own 30%. However Solgold can fund this, as we are about to find out. My personal thoughts are NM felt he would be further along the path to production. Hence why BHP are locked in till October, this year. I suspect, because of circumstances, he would like to extend the standstill agreement to October next year. However if we deliver the PFS before then. Then BHP are on the backdoor, and will not bid for Solgold or Alpala.
DBW, that is a very impressive statement. I just wonder whether this sort of 'event' would release BHP from their standstill agreement? Otherwise the project would be taken away from them without BHP being able to do anything to stop it.
Maybe they would ask NC to launch a cheeky low ball bid, which would then allow BHP to bid freely....
Thanks for posting that it would seem to indicate talking with boliden for partial gold offtake....they have been key in lundin unlocking their initial funding package in ecuador as they acted as a grade a off take to provide assurance for commercial facility funding.
Got a feeling the whole CGP debacle could be sorted in the very near future too
Thank you KB007.
Thanks Pad / KB
“Not a single expression of interest had worse terms than we put in the PEA [preliminary economic assessment] so we know the market really wants this product. “
This is great news
We reported on March 11 that we will need to raise $150 million to complete the feasibility study and for regional exploration and there are no changes to that, so within the next couple of weeks we plan to do a financing he said.
Hofmaier would not comment on whether the financing will be a bought deal, investment by strategic investors, or a private placement.
The completion of a feasibility study for Alpala is likely to experience delays due to travel restrictions and quarantine measures related to the COVID-19 virus outbreak in Ecuador.
Ecuador has been the worst hit country in South America and so we are missing some inputs due to our reduced activities [on the ground] such as environmental monitoring, land acquisition, studies for tailings and geotechnical holes, he said.
The November 2019 PEA outlined an average of 810,000 tonnes per year of concentrate in the first 15 years of production from late 2025 grading 28.2% copper, 22.1 grams per tonne gold and 65.7g/t silver containing 230,000t of copper in concentrate, 580,000 ounces gold and 1.7Moz silver.
Hofmaier was confident, however, that the company would be able to put a project financing plan in place this year given the overwhelmingly positive https://www.mining-journal.com/capital-markets/news/1385058/solgold-receives-interest-received-for-alpala-concentrate expressions of interest it has received from smelters and traders for the copper-gold concentrates the mine is expected to produce.
Not a single expression of interest had worse terms than we put in the PEA [preliminary economic assessment] so we know the market really wants this product. We will take a balanced approach between traders and smelters. The offers of some smelters have attractive funding attached. It is very clean with low levels of deleterious elements and the high gold content and long mine life mean it can be an important part of their smelter feed for decades, he said.
Hofmaier said he expected to respond to short-listed companies next week and enter into more detailed conversations with the aim of receiving memoranda of understandings. However, completion of this step will be difficult to achieve until travel restrictions in Europe and Asia are lifted.
We can do a lot with conference calls but as these are essentially partnerships we have to go and meet people, especially in Asia and the three major European smelters, he said.
Shares in SolGold are trading at C35, valuing the company at $673 million.
Any luck finding the article?
If nobody has found it by Sunday I'll have a try.
Great thanks !! Getting interesting every day.