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I don't disagree with most of what you have just stated addicknt, as you are correct and have never run a company. I don't think any company I would run, would be successful, as I am not made that way. ( no bad thing to be aware of one's weaknesses ). I also agree that this will be hard to defend against a high offer, and I think we would both agree, that it would be easy to defend against a low ball offer, for the reasons I have stated many times. ( sorry the 50 pence mob will be upset with that comment ) Not so sure on your comment on why you would consider the diverse book to be a weakness rather than a strength, when you look at how it's arranged. Maybe I could ask you to expand on that point, so I can better understand your argument.
Thank you Miagi, it's mild dyslexia, and hasn't held me back in life, apart from report writing, which I was called upon to do more often than I would have wished. I had colleagues that would sanity check what I wrote, and amend, while not distracting from the content of meaning. I like being retired, as although many aspects of the job I loved, the report writing wasn't one of them. The worst part is I use words in the wrong context, it's not bad when I talk, but my friends can notice it, and just let it go.
Q, and still no answer to the key question - the one that changes absolutely everything. In a sense, it's a pity you've never run a company, if you had you'd have a much better understanding of the dynamics and thought processes. NM and the team aren't sitting around the table saying 'oh well, it hasn't happened so far and as long as will keep saying we're going to production, it never will'. Part of what they will be doing will be considering the real threat the 'diverse' register poses. You know, the same 'diverse' register which you feel is a great asset, whereas it's actually a huge weakness. I think virtually the only thing you and I agree upon is that this company is worth a great deal more than the current market cap and that NM has done a superb job in getting us to the position of being a hugely attractive target.
Good morning rcgl2 I think the majority will be debt, as opposed to offtake, as it's cheaper. So I don't believe I have to explain the offtake side, as we have all seen that it action. So I would favour bonds. If we issue bonds, we can sell then on the open market, and they can be traded with an interest rate that is rolled up, and a terminal bonus given. I agree the rate would be higher than debt obtained through a financial institution, but it avoids paying anything until we are producing and have revenue streams to support our lending. We will also have some standard debt, but this will be staged, and again interest will be rolled up. The question the let's flog it brigade will have is that it's difficult to do. My answer would be, it depends, are people willing to lend on what we have.
Q. No misinterpretation at all. Your words... You may think you are saying something but it is not coming out that way. Sorry. Hence everybody has picked up on this. Fallacious argument, forget the 'have not' argument.
Anyone with more experience of such matters able to shed some light on how debt funding would work because tbh I can't see how it flies. Let's just say for sake of argument Solg isn't taken over, doesn't do a JV and doesn't sell Alpala. So it finances the construction itself, through a mixture of debt and offtake/streaming finance. Total capex is approx $3bn, so for example if $1bn of this was debt and the rest streaming, I still don't see how Solg would service that debt between drawdown and eventual payback.
Apparently Alpala will take 5 years to build and start producing. Payback period for financing is what 4/5 years according to the PEA? But that still means a very long period where there is some if not all of the debt outstanding. Just prior to production commencing in the above example there would be $1bn debt. As a crude yardstick, Newcrest sold a 10 year note in May this year at 3.25%. NCM is BBB rated so just IG, Solg obviously would be junk so I don't know what rate would be demanded for it to borrow a billion but let's be generous and say 5%. So that would equate to an annual interest payment of $50,000,000. Where does an explorer that has no revenue and is burning cash to keep exploring come up with $50m a year?
This is just my very crude brainstorming so likely to be missing some key elements of how this could all work. Opinions and greater expertise welcome please.
Hi allthatguff. Again you are doing what addicknt does, and misinterpret. I have never said never. I have summed up the evidence, as to what has happened so far, and what the probability for a bid versus a sale is. Please tell me in your mind, what has changed to make a sale more likely. As yes things have changed, as I outlined below, the changes make a sale less likely. All the best.
RE: About why we have not received a bid yet29 Oct '20
@redknight1, when a buyer (or more) show up at the door with a bid, which they likely will around the time when the BFS is published, SOLG can spin off the 100% owned subsidiaries that own the other tenements and just sell SOLG as a shell for Alpala. IMO of course.
Hi addicknt, I agree much has changed over the years. The changes make a bid more unlikely. The book is more diverse than ever. The proving up of Alpala has exceeded expectations, and I believe will continue to exceed future expectations. We have engaged Citi for a defence strategy. We are spreading the word, webinars and RNS's more frequent. Recently we are drilling other tenements. Covid has set us back. But I continue to listen to what has been said, as NM and the band have been consistent, which means I have been consistent, as I believe what they are saying. So when you say the story has changed, but I haven't changed my opinion, you are standing the argument on it's head. It's you addicknt, that hasn't changed your opinion. As they production story is backed by even more evidence. You said the FN deal would never be signed, as it was a ploy to get BHP, to talk to NM to agree a price. It wasn't it was signed. You believed that this was to big for Solgold to finance. Let's see if we can raise the finance. You believed we couldn't build and go to construction. I found out BHP don't construct their own mines, they use Civil engineering firms. Solgold will do the same. Yes the story has changed, more in the favour of production, but your opinion hasn't. Maybe you should reassess the facts, and not the speculation on this chatroom. All the best.