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exactly Schlem, its not being negative, we all want the same thing, but how can he do it?
Instead of giving us ideas they resort to abuse.
When will people understand that this tiny company will not be able to develop Alpala without massive dilution, that is dilution to your holding and no doubt at lower prices to reflect the development cost and location of the asset. And no doubt further dilution to accommodate the capital budget overruns that ALWAYS occur in development projects of this complexity, cost and size?
Develop the assets and sell the feckin' things to the highest bidder or at least JV some of them al a Greatland
I'm undecided as to what Mather's true intentions are. Is he talking crap when he says he wants to go to mining with Alpala or is he deadly serious? Personally, I think he's talking horse-sh-t and diluting only insofar as it provides exploration capital to drill and prove up until offers do arrive
How do you think it can be done?
You don't know, which is why you resort to abuse, true colours.
its pathetic .
is that a bad song you've written ?
This funding discussion becomes moot if a buyer turns up. The most obvious candidate is Australian giant BHP (BHP), which both owns 13.6 per cent of SolGold and recently underlined its interest in copper. A restriction on BHP buying more shares in SolGold ended in mid-October, meaning speculation could soon hot up again. Newcrest – which also holds a 13.6 per cent stake – could also move on SolGold, despite its objection to the royalty sale.
Last year’s preliminary economic assessment put Alpala’s net present value at $3.6bn-$3.9bn (post-tax, with a 9 per cent discount). This was done with a copper price forecast of over $7,000 a tonne and a $1,300-an-ounce (oz) gold price, compared with their current prices of around $6,700 a tonne and $1,900 an oz, respectively. SolGold itself has a market capitalisation of £686m – a run at the end of September helping it rise to 40p a share – and recent mining deals have seen 20-30 per cent premiums for cash offers. Of course, any buyer would be committing itself to spending billions on building the mine, which is one of only a few major copper discoveries of recent years.
Even with the existing major miners involved, Cornerstone thinks third-parties are still paying attention. “It's possible that a third-party coming in with an aggressive bid could create enough tension to force people to get into a bidding war,” Mr Macdonald told us. “There are just so few deposits of this size available.”
Mr Mather’s argument against selling off Alpala is SolGold’s potential to turn into a major player itself. “The blueprint that we created at Alpala is replicable, and applicable to all 14 of our other projects throughout Ecuador,” he said. “BHP doesn't have [these exploration prospects], Newcrest doesn't have them, we have them.”
Given the apparent potential of these other wholly-owned targets, would Mr Mather rather not sell Alpala and focus on those without the Cornerstone angle? The SolGold boss said it wasn’t something he was considering. Even if SolGold pushes this project through to production successfully, it will still be partly reliant on exploration prospects for share price improvement, given the years of construction needed. In any case, it’s hard to see a constructive relationship suddenly blooming between SolGold and Cornerstone.
An ideal world for SolGold would see Cornerstone giving up and selling its Alpala stake, which SolGold has first dibs on. But Mr Macdonald and co seem just as determined as Mr Mather to get their way and find a buyer.
Given mining’s cyclical nature, the difficulty of building major new operations and SolGold’s ability to annoy its partners, that might be the best option for everyone.
A few weeks ago -
'A football match quickly gets confusing if one team’s players can’t decide which side they are on. This is not dissimilar to the recent experience of SolGold (SOLG) investors, watching on as purported collaborators work against each other.
The company is at odds with Cornerstone Capital Resources (Can:CGP), a 15 per cent owner of the Alpala deposit and an 8 per cent shareholder of SolGold itself, over how the high-value Ecuadorian copper and gold project should be developed.
Further protest has come from another sizeable shareholder, Newcrest Mining (Au:NCM), over the company’s decision to sell off 1 per cent of future production for $100m. Institutional holders’ unhappiness over governance has pushed the company to expand the independence and breadth of its board.
The Cornerstone relationship is the rockiest, however, given the Canadian company’s push for a sale of Alpala and SolGold’s insistence it can build the multi-billion-dollar mine itself. Last month, a SolGold takeover bid for Cornerstone expired.
“If they wanted our co-operation, the all-share, failed hostile bid was not the way to do it,” Cornerstone chief executive Brooke Macdonald told Investors Chronicle. The group’s push for a sale comes from the practicalities of being a cash-light equity partner in Alpala – the latter of which means finding hundreds of millions of dollars to fund its share of development costs.
In fact, feasibility work on the project has left it progressively more indebted to SolGold, which is lending Cornerstone its share of funding ahead of giving the final green light for the mine. At present, this is expected to be paid off from eventual project revenues, although Mr Macdonald also remains sceptical that SolGold will be able to fund construction of Alpala.
“[SolGold talks] about creating the next BHP in Ecuador with a pipeline of other projects. All of that is very interesting, but there are cases where junior companies got into trouble trying to build a project of this size,” he said. “We suspect that at the end of the day the capital cost will be quite a bit larger than what is estimated in the preliminary economic assessment, and that it is just too much heavy a lift for a junior mining company.”
An updated cost estimate for Alpala – from the $2.4bn-$2.8bn (£1.9bn-£2.2bn) released last year – was expected at the end of September, but Covid-19 restrictions have delayed the pre-feasibility study. Managing director Nicholas Mather told us the project had a “perfect storm” of factors that attracted financiers, including the “high-grade core” of the deposit and current gold and copper price strength, and said the company was already being approached with funding offers.
There is a possibility that if NM feels it's not going his way he may accept a offer before the AGM and their wouldn't be anyone to stop him accepting it ,I would if it stopped the rebels trying to oust him and reward the faithful imhi
Give us some ideas then on how NM will be able to do this ?
He’s said no to JV’s so how we can get the funding to prove these other projects without further dilution?
I’m all ears
And you’re in denial
You're so funny.
That’s a no Shippy, not a yes and no.
More like wishful thinking unfortunateky.
If there is pressure now to get eh resolutions passed, which There is or we wouldn’t have all been sent letters, this situation will only intensify with more dilution.
I hope NM does pull it off but the evidence is it’s unlikely he’ll be able to get the huge funding required to prove up these other resources without significant dilution.
This is why I don’t understand those against JV’s?
Look what it’s done for GGP as an example.
There is no way I can see of getting the funding for exploring the other projects fully without huge dilution or JV's.
Personally I don't want further dilution as it will just weaken our case eventually the bigger players will just take their growing stakes to the next level and take us out cheap.
Thats why NM did the Franco deal, however going forwards its not going to be sustainable, getting the millions required.
Everyone knows this and this is why minors don't become majors .
no Shippy, you don't KNOW that, unless you have inside info, which you don't.
Treading on eggshells but trading means pretty much the same in this case
No and yes.
It really isn't mportant.
What is important is why we are invested in the company and who got us to where we are.
Who do think will look after shareholders and do it in a way that keeps the locals happy because is someone annoys them the whole project is toast.
This is a unique project with a bod who forge ahead whilst trading on eggshells.
I've been helping to get shareholders to vote for several years now because I believe in the company and the bod and.,in particular, Nick Mather.
I don't get paid, I do it because I like being I invested in a company that gives a damn about the people who's ground we are working.
So, you've not been given any inside info and are not talking to NM direct? Did you expect your source to say anything else?
Certainly going to be interesting next two week imho
Read my 4/12 13.06 post
Two more potential catalysts for share price increases without Solgold having to release any drilling news before the AGM are 1) RNS showing Valuestone have collected a substantial percentage on the open market 2) RNS stating ... Solgold are in discussions with parties over financing/joint ventures.
shipright, how? Supposition, or evidence?
But I do earthling.
I would add that La Hueca is relatively close to Porvenir and therefore a sharing of facilities may be possible. However, as we have heard nothing about La Hueca for a long time, indeed, since drilling began, I have rather discounted it. I would like to be proved wrong!
I thought along similar lines and meant to look at the respective proximity of Chinese mining interested in the south east. Encapsulating alpaca & Rio together with the options on Blanca (is there a boundary issue wrt Cascabel?), but in the end I wondered what drove decision to prioritise the respective areas the way they did, was it logistical, reasons or most likely to net positive returns to suit a particular agenda. They referred to Rio as a ‘sleeping giant’ so I would have thought higher on my priority list. Is Blanca predominantly a gold target? Let’s hope it all comes to light & good in the near term.
Good afternoon DartFrog, I agree with everything you say, maybe a JV for Porvenir because of location, and the fact the PFS has been held up, as they want to move infrastructure from the mine into the open.
When this was first announced, my first thought was for shared infrastructure, not because it's cheaper for Alpala, but because sharing resources for future projects, makes them cheaper.
All the best.
I agree rcgl2.