The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
"...Whilst TAM has potential to add cream to Alpala’s NPV, we believe the benefits go
beyond our hypothetical mine plan. In our modelled scenario, with TAM giving
way to Alpala’s higher grade feed from FY30 and reduced to nil in FY31, there
remains potential to extract a further 254Mt @ 0.29% CuEq based on Indicated
material within the updated MRE. This could provide flexibility and cash flow
‘insurance’ as the block cave develops. TAM’s underground mineralisation also
appears promising and we believe is likely to grow substantially from the current
resource (Indicated: 172.0Mt @ 0.35% CuEq and Inferred: 69.4Mt @ 0.36%
CuEq)...."
Z
"...TAM open-pit mineral inventory could boost NPV…
Whilst TAM was not included in the Alpala PFS, we believe the deposit shows
clear potential for eventual incorporation into the mine plan at this early stage.
SolGold has also planned work including assessment of potential near-surface
mining options at the Cascabel project. The premise appears compelling with
production able to be brought forward and reduced funding risk, in our view, as
TAM offers cashflow whilst SolGold initiates the cave at Alpala. We therefore
model a conceptual scenario below to highlight potential upsides (based on our
updated 25Mtpa operation). Capital expenditure is assumed to commence in
FY25 (in-line with our Alpala only model) and an additional ~US$250m of
growth capex is estimated, including US$80m of pre-production mining at TAM,
in line with other near-surface porphyry projects in Latam.
We then leverage TAM’s higher-grade outcropping zone containing 28.0Mt @
0.43% CuEq and 10.5Mt @ 0.55% CuEq to kickstart production in FY27, ramping
up into a complimentary mine schedule with Alpala in FY30. Recoveries are
estimated as in-line with Alpala at 87% for Cu and 77% for Au and opex costs are
assumed flat with lower open pit mining costs offset by an uptick in transport
costs to the Alpala hosted plant. The result would be a US$239m increase in our
Jun’23E NPV to US$3,598m...."
Z
"...Aladdin’s cave: By-product production will make Alpala one of the
world’s largest gold mines…
Whilst no surprise given the 21.7Moz gold contained in M&I Resource grading
0.25 g/t Au, Alpala is set to produce an exceptional 7.6Moz of by-product gold on
the initial PFS mine plan. Production is expected to peak at 829koz and average
680koz per annum in the first five years following initial cave ramp up. This
would place the project within the top 15 gold mines by production worldwide
based on 2021 figures, and the third largest in Latin America. We believe the
significant by-product output will likely prove advantageous project financing
discussions, with potential to issue a precious metal stream or royalty...."
Next Step:
"...SolGold is currently progressing additional optimisations to be included in a PFS
Addendum, slated for H2 CY22, ahead of completion of the DFS, expected in H2
CY23. Engagement with the relevant government departments is anticipated from
Q2 CY22 to commence fiscal discussions and the permitting process. This could
lead to a potential construction start in Q4’24 and first ore in 2029 in an Alpalaonly scenario. SOLG has a cash position of US$58.4m (Feb’22) to progress its
studies; at a guided cash burn rate of US$70 – 80m per annum, additional
funding is likely required prior to publication of the FS...."
Z
"...Specific tax incentives at Solaris’ Warintza project include a 5% reduction of
income tax, fixing the income tax rate applicable to the Company at 20%,
exemption from the capital outflow tax, as well as the exemption of all import
duties for the import of goods needed for new investments in the Project. SolGold
itself announced an initial IPA in November 2021. The agreement included
investment intentions as well as tax stability for 15-years and international
arbitration in London if there are any disputes in relation to the Cascabel Project.
We would expect to see an updated IPA in early 2024, with the current agreement
covering planned investments through to the end of 2023 which would be aptly
timed with the upcoming Feasibility Study. The expected 3,000-person strong
camp is also a significant source of skilled employment within the area...."
Z
"....Ecuador has been subject to civil unrest in recent weeks, sparked by indigenous
group protests surrounding the cost-of-living crisis. On Thursday the government
agreed to concessions including a 15c cut in fuel price. The government also
pledged to cancel an executive decree to increase oil output, and change a mining
decree spurring development to add additional environmental protections and to
respect archaeological remains. Whilst the situation appears delicate, Ecuador has
made significant strides towards attracting FDI in mining projects. The country
has risen from a score of 45 (2015) to 73 (2021) on the Mining Investment
Attractiveness Index according to the Fraser Institute, surpassing Chile (69) and
Peru (61).
Several Ecuadorian explorers have announced work towards Investment
Protection Agreements (IPA) with the Government of Ecuador in the past weeks
including Solaris Resources and Adventus Mining. The IPA provides a foundation
of certainty with respect to the legal framework governing future projects,
including stable mining regulations, security of title and investment for the term
of the agreement, as well as new tax incentives to accelerate development. ..."
Z
"....Alpala now contributes ~US$2.3bn to our SOTP based on 85% ownership and a
target P/NPV of 0.8x our ~US$3.4bn DCF (as at Jun’23E). We add a further
US$72m assuming 0.3x our ~US$240m DCF for the conceptual inclusion TAM.
We then include US$150m for SolGold’s regional portfolio including US$75m
for Porvenir and adjust for net cash and outstanding options and warrants to
derive a GBp85/sh target, implying ~200% upside. SOLG has a cash position of
US$58m (Feb’22) to but we note that at a cash burn of US$70-80m pa
additional funds will likely be required during H2’22...."
END
Z
"....SOLG is assessing optimisations that will be included in a PFS Addendum due in
H2 CY22, in preparation for the Definitive Feasibility Study (“DFS”) planned for
completion in H2 CY23. This is likely to include upside which we believe could
be unlocked through a satellite open pit at TAM. Our conceptual scenario
estimates TAM could bring forward first output from the Alpala plant by two
years, enhancing the NPV by US$240m whilst also providing flexibility and
derisking the Alpala cave operation. The Alpala Mineral Reserve is another
avenue of upside, currently representing only 21% of Measured and Indicated
Resource tonnes and ~38% of contained metal. Inclusion of additional material
could see the throughput jump to over 30Mtpa by adding another module,
though follow-on caves are beyond the scope of key technical work at this stage.
Enhanced fiscal terms could be agreed in an updated IPA (early 2024), with
Solaris Resources recently announcing a 5% reduction in income tax to 20%
amongst other incentives, setting precedent and providing further confidence in
Ecuador for FDI..."
cont'd
".....The PFS initial mine plan targets the Alpala high grade core within one cave,
with copper grades expected to average over 0.75% (~1.35% CuEq) within the
first 10 years of production. As a result of strong by-product contribution and
highly productive bulk mining methods, Alpala enjoys low cash costs of
US$(0.40)/lb Cu and AISC of US$0.06/lb Cu on a post by-product basis. This
places the project well within the first decile of the global copper cost curve
(according to WoodMac 2032 estimates). Within this is an exceptional negative
AISC average of US$(1.38)/lb in first five years from achieving nameplate
capacity (190ktpa Cu, 680kozpa Au and 1.3Mozpa Ag average annual production
in that period). These quantities would place Alpala within the top 15 and 30
projects globally for gold and copper production respectively (vs. 2021 global
production figures), and in the top ranks of undeveloped junior held projects...."
cont'd
"....The revisions to our estimates follow release of PFS results on 20th April and the
technical report filing on 1
st June. Key changes include a reduction in throughput
to 25Mtpa vs. 30Mtpa in our previous, pre-PFS model, as the study “right-sized”
the project to a robust base case compared to the 50Mtpa PEA. Reserves of
558Mt @ 0.58% Cu & 0.52 g/t Au (vs. our previous 959Mt assumption) offer a
25-year mine life (vs. 33-years). We also tweak assumed royalties in-line with
the PFS, increasing the Franco-Nevada royalty rate to 1.27% (from 1.00%) due to
production provisions in the agreement, and reducing the government royalty
rate to a flat 3% vs. 5-8% previously. Assuming prices of US$8,500/t Cu and
US$1,850/oz Au, this generates life-of-mine EBITDA of US$27bn and FCF of
US$14bn, giving a 4.2-year payback and an NPV8% of US$3.4bn at Jun’23E (or
US$3.6bn immediately pre-capex), a ~30% like-for-like cut vs. previous H&Pe. ..."
cont'd
".....We have updated our valuation for SolGold (“SOLG”) following the filing of the
Cascabel PFS technical report. The changes result in a US$3.6bn NPV8% and
22% IRR (immediately pre-capex) at US$8,500/t Cu and US$1,850/oz Au,
driving a modest cut in our target to 85p/sh (Jun’23E) from 101p. Nonetheless,
we view this as a solid base case, with tangible potential upside through:
inclusion of the open-pit Tandayama-America (“TAM”) deposit 3km away;
additional caves and throughput capacity to capture the remaining 79% of M&I
tonnes outside the 26-year PFS mine plan; capex efficiencies; and positive tax
regime changes within an Investment Protection Agreement (IPA) for extraction. ..."
cont'd
LM why would BHP, or anyone else for that matter, pay 41p for a fund raise wen our current sp is 27p? What they did in the past is irrelevant.
Anyone have full access to the new research note on SolGold ?
Snip it below
SolGold: Model update following PFS filing; de-risking continues with optimisations expected by year end
We have updated our valuation for SolGold (“SOLG”) following the filing of the Cascabel PFS technical report. The changes result in a US$3.6bn NPV8% and 22% IRR (immediately pre-capex) at US$8,500/t Cu and US$1,850/oz Au, driving a modest cut in our target to 85p/sh (Jun’23E) from 101p. Nonetheless, we view this as a solid base case, with tangible potential upside through: inclusion of the open-pit Tandayama-America (“TAM”) deposit 3km away; additional caves and throughput capacity to capture th.........
Q, you appear to have accepted the argument that at least 300m will have to be raised via equity funding. However, you seem reluctant to accept that this will cause significant dilution. How do you reach that conclusion?
Seanhunter : "Going into production ourselves? Really? I'd rather they spent the money on magic beans."
Correct
I think somebody already has, that or mushrooms.
Definition of Walter Mitty
: a commonplace unadventurous person who seeks escape from reality through daydreaming.
ONWARDS & UPWARDS Bubbles ;))
Even bubble gets it...
:)
Big trades there novice nice. :):)
Try your best not to respond to me little novice. I know it's hard for you because the long term genuine holders mainly ignore your input. #needy
Don't flatter yourself tinyray, I wasn't replying to you Lolzzz, remember ;))
So predictable... have a good day hopefully you'll join us soon (so you say)
I thought as much Sean, no explanation why you have to be abusive other than being childish and emotional. #weak
That's rich coming from you Ray, a non invested troll who only appears when the price falls. Back to POLY now laddie, Putin needs your pennies to prop up his regime.
No need to respond to me novice.. let me go from your head...
Because its an anonymous BB fella with no consequences, what gets posted here has no effect on the price...
#harmless fools
ONWARDS & UPWARDS
A deal will be done on Alpala soon as Lasso, US and IMF all desperate for Cascabel to be moving forwards with more pace than SOLG's self propelled Zimmer frame.
Mather has said that he believes there are potentially another 12 similar size Alpala deposits in the folio. Even if they hit just 3 sized Alpala's elsewhere that's huge and transformational. 4 x tier 1's potential. So if he's so confident of the other tier 1's then surely common sense says that you sell 1 tier one asset to derrick and use the cash to find the other 3... or 8!
The next cab off the rank comment I believe refers to 'packaged' goods. SOLG are looking imho to rinse and repeat what they have already achieved on Alpala. But for the market to give the strategy any value, they need to prove the model works and to do that they must 'sell' or JV Alpala. That's the plan imho and it will happen this year. The only question is whether a buyer (bhp et al) allow SOLG to take that route. Any Major miner with some intelligence will just buy SOLG out right and bag the opportunity of another 3 or 8 tier 1 projects for themselves at zero price as undrilled resources worth zero these days. Just relax, a deal is bubbling away in the background and has ben ongoing for months now. It's obvious by how quiet CGP and Irwin are. They seem quite content right now when you'd normally expect them to be ranting and raving.
Why do you have to be abusive to quady sean? Can't you handle a debate without the abuse?