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Quady we not going to production ,we going to be taken over ask NM
Good afternoon Andywest
I have explained it many times, but here goes once more.
The problem with start up companies is that they often end up as companies that issue lots of shares when they need money and the good ones end up issuing shares to a single entity .
Let's take GGP as an example : today Newcrest have or will have 75% of the shares and a controlling share, so it's game over as one day Newcrest will own it.
NM understands this and has not let any entity own more than 15%
So we always are in a state of competitive tension.
No one will sell their stock as they all want a bigger share.
This means two things:
1=) In order for a bid to be successful the bid would have to be set at such a level that the block holders of Solgold would sell and allow a single holder to obtain a bigger percentage. They cannot buy on the open market as this would be too expensive.
2) We want to head to production, this is Solgolds intention, remember production is plan A. that is our direction.
The saying plan A begets plan B is not what most people on here thinks it is.
It means should anyone put up the kind of money that would make our major shareholders sell to them, then under the right circumstances Solgold might not be able to defend. ( it is very unlikely at the moment with the book being so diverse )
If someone wants to buy GGP all they have to do is approach Newcrest and agree a bid for a friendly takeover.
If someone wants to buy Solgold, where do you start as having such a diverse book means you need to talk to many parties at once including NM.
Solgold could be taken over with a hostile bid, but the price for the bidder would be high, so I have ruled that out for the moment.
This has been why I have been confident over the years that no one will bid for us in our current format. Along with our defense and offtake to Franco Nevada.
This next bit is speculation by me believing what I believe.
When Solgold announces the CFP to construct Alpala it will be tabled in such a way that will be minimum dilution to keep the book diverse and will mainly consist of Bonds, Loans and offtake. So as to prevent a bid while constructing Alpala.
At this point I believe we will start to see the Solgold share price start to rise.
Quady could you explain please what you mean by a 'diverse book' and how it affects the liklihood of a bid for our company.
Jezzoo - fair enough point taken.
Quady - there's a bit of a difference between having provisional pledges and binding agreements. Can we be sure that the party of parties that indicated they'd provide a billion quid two years ago still would do the same today?
We need binding agreements. If it's too early then we should look at MOUs or LOIs. But either way we the company should be telling the market who wants to get on board by means of re-enforcing the SOLG story.
There's only so long that soundbites like "next cab off the rank" will hold.
FTJNY companies don't work like that.
They have strategic plans in place, they don't sit round a table and agree to bluff.
Only by constructing Alpala can we release value.
Apart from the above argument which Q spouts incessantly his other claim is that Solg have repeatedly said they can raise the necessary funding with minimal dilution to take Alpala to production. Of course Solg are going to say this otherwise they would be a sitting duck for a cheap takeover by the likes of BHP! Solg are merely playing the game when they talk of funding to production. Its just like any high stakes deal, bluff and double bluff and see who blinks first!
Good morning Bozi on the CFP, we know they are talking about financing, but we are not going to get anything till after the DFS, maybe as late as the BFS. But the fact that Solgold talked about 1 billion on standby two years ago shows us what's in the pipeline.
On the issue of everyone knows what their shares are worth and no one will sell cheap.
We have to remember our market cap for a company with no revenue.
We now require the DFS, as we are on a long journey.
Seanhunter may want things to move faster, if that's the case don't invest in Mining, Oil or Gas
Bozi:
That's exactly what I meant, a Chinese bid would be more than BHP are willing to pay. They aren't a company with shareholders, they are spending govt money in a country where they don't have to worry what the population thinks as they have no say. they could buy Solg out and mothball it indefinitely ( if the Equadorean govt agree).
I know it's a simplistic view but it's fundamentally a sound one.
"Problem with that is everyone knows what their shares are worth and no one will sell out cheap."
Yeah, let's see how long this lasts when Nick is kicked off the BoD in December and his holding is set to be diluted to oblivion to fund the building of Alpala.
Jezzoo - wishful thinking from you I'm afraid.
BHP know that were a party from the East to approach then it would have to be a knock your eye out proposal to get through, i.e. more than BHP are willing to pay. Anything less and they know that Mather, DGR, Newcrest and maybe even the likes of CGP and Blackrock will reject.
You'll get a situation where all the PIs try and tender their shares but the proposal gets blocked, and it would be pretty hilarious viewing.
Yeah Quady seeing as you asked, yeah, since 2017 l do think I know better than the BoD.
Quady - just to pick you up on this comment,
"Problem with that is everyone knows what their shares are worth and no one will sell out cheap."
If that were true we wouldn't have a share price that is averse to spending any significant length of time in the 30s.
The fact that this is continually seek support in the mid-high 20s suggests that people think it's worth that much. There is an imbalance when the share price goes higher (with sellers taking control) and it's only 25/26 when the buyers come back in.
In my opinion, BHP know they don't need to act in the market until someone else does. In the meantime they can use their shareholding and influence to lobby management and ultimately remove some of them at AGM time, and that will happen again in December.
I at least appreciate why SeanHunter is exasporated. He knows that the more BHP turn the screw in the background the more detriment there is to the SOLG story, and the more risk to our investments.
If that report of the Chinese govt is true I think that BHP will find themselves out voted when a bid comes in from the East.
The Chinese intend to dominate the commodities sector as they know what you pay is irrelevant when you own so much that you dictate the price. That's their intention in the long run, the East is slowly taking over and the West cannot stop it using their existing methods. Whilst BHP et al fanny about playing games the Chinese will just take it from under their noses. The available resources on this planet aren't keeping up with demand, we will be buying copper from the Chinese at a price THEY dictate as we will have no choice. A strong bid will look cheap with time..
You and your diverse book, Quady. It's such utter tosh...as you will eventually discover.
Quady - the issue with what you're saying is that you're trotting the same line out from the company. All the while the company has provided zero, absolutely nish, to the market by means of an update on the conditional financing package.
Saying, "Ayten and Ingo are working on it" is simply not enough. We want to know what discussions they've had and with whom. We want to know which third parties they've engaged (if any), we want to know what the complete package will look like insofar as the various components - debt, equity, streams etc.
Given the glaring lack of detail SOLG have provided on their efforts to finance Alpala to date, I don't believe you can literally refer to a comment made 6/12/18 months ago. How long can you refer to such comments before they expire? As i said last week, the general health of world markets has changed and this impacts the availability of finance on good terms.
In my view, we're now at the stage where we believe SOLG can finance it when they go and finance it. They no longer have that credit in the bank.
For me the biggest risk is we don’t turn into another SXX. Cash is king and at present the market can’t see where the cash is coming from. Majors work underhandedly to take what the want. Unfortunately PIs are at the bottom of the packing order are one difference is somewhat distributed interests of shareholders however even that can change over time. I honestly can’t see more than a 60p buyout so hand tried to be realistic with expectations. GLA. Although for balance I did read an article last week about RIO and Barrick now showing more if an interest in Equador.
So seanhunter you know better than the BOD.
I will take the word of the people in the know who understand what we have and how this can be funded with minimal dilution.
Remember two years ago we announced we had a billion in hand when Alpala's build was 4.3 billion over a longer period.
Today we are in a far better position in terms of fund raising and I suspect that dilution would be even less today.
Listen to the company not the so called experts on here.
Recipe for disaster Quady. Wipeout for current holders because believe me dilution will be the centrepiece of those silly plans. Let's hope a bid is incoming- the recent rise against an abysmal backdrop has given me some hope again - and that the current plans for giung into production are just for show like the mindless quacking of ducks, because they are insane.
Good morning Killjoy I have covered this subject extensively.
In order for a bid to succeed the diverse book must become less diverse.
So BHP or another party needs to acquire blocks of shares.
Problem with that is everyone knows what their shares are worth and no one will sell out cheap.
So this is why we have had no bid up till now.
Lets add we have had no trouble raising funds and whatever some believe on here Solgold can raise the funds to build Alpala with minimal dilution. (the company's words not mine )
Some armchair CEO's think they know better than Solgold ( they don't )
So unless the book changes significantly we get no bid and we continue to production. ( again the company's words not mine ).
If you assume NCM and BHP are not holding 13%+ each of SOLG for the future dividends and are instead holding these stakes as a foot in the door then logic would suggest that they want the assets or a slice of them. On that basis anything that happens to the asset worth (directly) is likely to get them upset. That was proven by the Franco deal. The 1% royalty (there is a 0.5% buying back option) is a slice of the cake gone. I don't think BHP or NCM give a flying avocado what happens to SOLG's private investors or the equities shares etc apart from a 'control ownership' point of view. Dilution means nothing to them as they are always going to sustain their position and the cheaper the better. So in answer to your question, ask yourself this.... how do SOLG raise funds to deliver DFS and the early mine shaft work? What happens if they go with another Franco deal for 1% royalty but via Boliden? $100m raised without dilution is a great deal for bulk of SOLG shareholders and a poor deal for BHP and co. I couldn't give a t055 if we gave away 2% royalty on Alpala. Why? Because we most certainly won't own the asset by the time we get past DFS. Why take some dilutive pain now when the likes of BHP are going to get the full cake (an assumption or example for argument sake).
So in short... SOLG will need to raise funds and anything that they do which involves the 'asset' or royalties etc will kick off a bid imho as Majors don't like to see the cake getting eaten into by streamers or smelters.
The only half way house I can see is an IPO of Alpala on North American markets. That could raise funds and still allow BHP and NCM to gain a slice of the asset but not a controlling one. It could also involve other parties with Fortescue or Gina and co getting a decent slice. That IPO business could then be traded over several times and the fight for ownership takes place there. SOLG would of course retain a sizeable interest in the IPO. The value of the listed business would feedback into SOLG's main LSE listing.
The new CFO has a proven track record and getting large billion dollar IPO's away. Just imagine if ENSA was IPO'd with value of $3bln? Why not?
Rather than keep going round and round about who may or may not bid, do we have any consensus on what will trigger a bid?
Apologies. I see some other alert person has got in before me!!
Cheers Ned
Posted by Bally22
https://www.business-standard.com/article/markets/metal-stocks-rally-as-china-considers-220-billion-stimulus-plan-122070800009_1.html
Have a good weekend. Ned
If the Chinese made a bid then it would be game over for BHP. The asset and folio would be gone. They got spanked by Wyloo (twiggy) and whilst Fortesque are no small fry player, the Chinese megalith would step on BHP and wipe them off on the curb. What some investors fail to see is the tightening on regional pro business mining opportunities. Russia and surrounding areas gone. Majority of South American.. gone or impractical / uneconomic due to huge lefty taxes.
In terms of BHP's future and major entry into 'copper'... where else can they go? Where else on the globe offers such a great opportunity. Barrick and Rio recently signing deals or about to with Lasso and as we know... getting new licences in Ecuador is not easy due to indigenous / green warriors.
100p a sharer for SOLG is peanuts. Not far off $3bln, but the opportunities in that folio almost guarantees that paid back within 5 years. That leaves 45 years+ of very economic profits and easy reinvestment.
Chinese already big in Ecuador and more than ready to build Alpala's export pipeline.
Patience required. Not much longer to go.
Jeezoo they know they need it