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I sent an email to Scott asking why they don't bring some extra hands to complete the mine plan earlier, if this is what the possible bidders are waiting for
He just replied with the following:
"Thank you for taking the time to send your thoughts on the approach to the new mine plan. We are in the process of developing a clear plan and scope internally. Outside consultants will be utilized with a well-defined scope, budget, and timeline. The work we are doing internally will ensure that we get the most from the consultants that we do use. We understand that time is of the essence.
Thank you again,
Chris"
They do reply so any questions, just send them an email
I agree Orthern but with that in mind, what is the solution?
You say it yourself we're going to a small business. Between two small businesses we've found a globally significant asset. An asset which is too big for us to finance and probably too complex for us to build without significant outside contract work.
Now factor in that CGP and many SOLG PIs have been baying for a sale for 4 or 5 years now. The outcome is a soft strategic review.
It's probably worth as well that other resource companies in London (Eurasia and Landore) have undertaken strategic reviews and none of them went to a set timeframe. I mean how do you set a timeframe for one? You can set a firm deadline for expressions of interest but in the event you receive none you have to announce that developing is the best strategy and that craters a share price by 30-50%, so you only end up cutting off your nose to spite your face.
I'm still confident the strategic review is genuine and I'd hoped it would be done by around now but clearly some latam politics have thrown a spanner in the works.
I think it's just a case of being patient for a little longer.
An open ended strategic review doesn't restore credibility... it makes the board/mangement seem incapable..
I've said before, we are just a small explorer... we are not a multinational conglomerate with fingers in multiple industries, spread all over the world... It is ludicrous that a strategic review, of a small business, to decide what direction to take the business forward in, should take a year, or even longer.. It highlights a continued lack of any progress to the markets.
That's your opinion, Sean. Absolutely legitimate, but one you can see today is not shared by all. I have as much tangible evidence that we might be able to finance a simpler mine as others here do that we're due an imminent takeover - very little.
SC seems to have reverted to the same playbook as DC and NM: you'll only attract a bid if you have a plausible Plan A to mine the minerals, with all the licences and procedural steps that entails. It's a shame we had this sp-knackering wobble in the middle, where people who should know better pretended a sale was imminent, and the market showed just how much it disagreed. Hopefully the SR will restore some credibility, and some value, and then next year we can work on progressing things whilst secretly hoping for a bidding war.
Got it
if they censor part of matt han**** on here what do they do with s****horpe?
dinnermoney, some us are still living in 2020.
i'm at home getting 80% of my wages, watching tiger king on netflix, cheering on captain tom, baking banana bread, clapping the nurses while they do dance routines and stop me seeing my dying relatives, keeping fit with joe wicks, protecting the nhs, staying indoors, leaving my shopping on my doorstep for 72 hours, grassing on my neighbours, hissing at people to wear a mask, believing matt han**** and his sidekicks, and telling everyone that a bid for solg is "imminent".
I genuinely didn't see a single post that convinced me that a mine is not only not on the cards but not financially feasible. So it is "clear" unless someone out there can come up a tiny bit of evidence that a mine is on the cards and a viable option.
I asked a genuine question, but didn't get a direct answer because no one has an answer, including Scott Caldwell.
So why on earth are we sleepwalking towards this option - unless people are just so sick and tired of waiting for a bid that they are prepared to believe anything.
I honestly thought I was missing something, that everyone had access to information I hadn't seen, but I'm more worried now than before that if we don't get a bid we are going to do something very, very stupid and costly.
If nothing else today has served to showcase how thoroughly entrenched every poster here is. No minds are going to be changed. Lots want to impose their views on others, or be validated by seeing similar thinking. Sean asked for feedback, got some opinions and then said 'it is clear', which quite evidently it isn't!
I think we'd almost be better with two boards operating as uncontested echo chambers, and for news, people can just set up a search alert on the word 'solg' (which is all some posters here do, copying and pasting articles that all tech-savy members have already read)?
It would save fort and red feeling the need to tell us everything is rosy when the SP is half what it was a year ago, and it would save Quady having to explain why he thinks production is more likely than a TO at least twice a week.
Q, there's a huge difference between saying "Yeah, we could be interested. Come back to us when you're further down the track and have something tangible for us to look at" and actually handing over the readies. I've sat in enough meetings where this sort of thing has been said and learnt through bitter experience not to place any faith in the comment.
No evidence ever emerged to confirm his statement and I'm of the opinion it was misleading - to put it politely.
Honestly, I really do wish this was fundable, for the simple reason it would add value, but as it stands I just can't see it.
"Ideally we need a guarantor, maybe the Ecuador government to finance this on loans which are staged."
You are well and truly through the looking glass here Quady.
What would come first - paying back the loans, greasing the palms of everyone involved, fending off the constant threat of nationalisation under a new government... or us getting some dividends 15 years from now?
If we are really in a position to go cap in hand to the Ecuador government then we never deserved a shot at this in the first place.
Thanks to everyone who posted - it is clear that not only is a mine not really on the table, if it were it would be 100% disastrous and completely unfeasible and would wreck us financially, costing our independence and diluting current shareholders out of existence.
Annoying that Scott Caldwell even mentioned it - distraction, straw man, or smokescreen or whatever he meant it as.
Addicknt I accept he had expressions of interest, but that's still one billion.
We don't require all of that as this would be funded in many ways.
But that can be achieved without a JV.
I suspect a JV and keeping control.
So let's see what the strategic review comes up with.
The company certainly never received $1bn, unless I missed it.
Those investors back then certainly won't be investors now, I think that is fair to say.
Q, he didn't have $1bn. How could he? There was absolutely nothing upon which to base a lending decision.
I've said it before, he may have had expressions of interest, but no more than that.
So let me get this right Bozi, you are saying if we can get a start up production for one billion to start generating revenue to complete construction, we cannot do this today, even though Ingo had one billion of funding ready to go years ago.
What percentage did we have to give up for $50m? Granted people can now see how unlikely a block cave is anytime soon, but the numbers are there. I don't think the SR will advocate going it alone on a multi-billion block cave, by the way. I assume it will be simpler, cheaper means to lower hanging fruit and faster revenue.
Maybe that will catalyse a bid, but if it doesn't I think we'll find the cash to start small. All of this is 2024 and beyond though, once we've got the exploitation licence. As I might have mentioned once or twice before...
Couldn't agree more, Bozi.
Financing now is a no no. Three years ago however when we were talking about the PEA, the first draft PFS, etc I still think it would have been viable with some good execution.
I also did a post on this some months ago and a few of us discussed the increasing cost of capital, and well, that has happened and some.
So pigs will fly before we secure Cascabel funding.
It needs to be absorbed by a huge organisation with free cash flow to manage the build without debt financing, unless of course it can be secured by them on attractive terms.
There's no chance of SOLG achieving that without any revenues or near term path to revenue generation.
SOLG have used a couple of royalties to extend the runway but it now has to be full sale or Cascabel sale and spin out.
Ideally we need a guarantor, maybe the Ecuador government to finance this on loans which are staged.
So, how much will the slimmed down new mine cost? $1bn? $1.5bn?
How much new equity? $250m? $500m? Think of all that lovely dilution!
Royalty deals are a non-starter, so how much will the debt cost us? 10%? 12%? More? Do the maths on the compounding effect of the rolled-up interest.
Convertible bonds? aka death-spiral financing.
An opening balance sheet that would look truly awful.
I'd love to think financing was a realistic option, but I'm struggling to see how on earth it'd work.
I thought it was fairly clear that "advancing" Cascabel meant bringing the project to a state of readiness so that plan-A we could sell it, or plan-B JV it, or plan-C do it ourselves at great cost and dilution.
The negotiation with the government and the updated technical plan for extraction are two of the most critical aspects that hopefully the strategic review will clarify.
In the current state of affairs, no buyer is understandably in a hurry to show a bid, and this will remain the case for as long as we insist on trying to obtain full value for the shareholders; I believe NM lost that bet at least 4-5 years and we have little leverage to force a higher price, especially as we cannot afford to get into 2024 without an agreement.
The only smart and fast option to monetize is to negotiate with those in the data room for a reasonably low price. The price will only get lower as we run lower on money.
2023 is the make or break year I think.
No doubt financing will be tricky, but we've had several other moments in our history where that's been true. JV, royalty deal, offtake... All of them could be awful or, if the terms are right, decent.
Remember that, as a company, we only need to may £30m per year from our assets to pay 1p on each 16p share. If it's worth the billions the 'sale imminent' crowd believe it is, then we only need to keep a tiny fraction of the profits
With all the discussion of it as if it's a reality (thank you Scott Caldwell) I thought I might be missing something. I'm tired of waiting for a bid too but we just can't replace one hope with a far more unlikely one.
DBW I am genuinely willing to look at a viable mining route case. I'm just shocked that there's absolutely nothing there.
That’s the point Sean (as I’m sure you’re already aware ) no one in their right mind seriously believes construction is a possibility…. Suicide