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CD, yes the debt did require repayment, but I cannot believe that the repayment was so urgent that DGR had to be frozen just as it was taking off on the Porvenir results. Frankly, it looks and smells like daylight robbery.
I can see CGP's point regarding 'insider' advantages especially when it comes to DGR. They do own a large 10%+ slice of SOLG and as such, that's a cheeky way to gain a cheaper entry point and in theory should be sensitive to the same rules as buying SOLG shares in open market ahead of transformational Assay results. Does NM buying into DGR equity raise mean that SOLG are not in a closed period right now?
If NM bought 2m block of shares in SOLG tomorrow, then the market would react accordingly... up. But if he buys indirectly via DGR then the market doesn't bat a eyelid? Perhaps the placing with DGR was a way of securing votes (via DGR) ahead of CGP's AGM or potential offers? As I understand it, the debt/bond did require repayment so that was the excuse for the raise.
Italian, I like your line of thinking there and £1.5/share at BFS stage, just for Alpala sounds both reasonable and very healthy indeed. It's the 600p for the gold credits that's skewing the production valuation sky high - hard to believe the copper would be worth only 1/6 of the gold in a potential takeover, having reached production.
I couldn't help but notice the capital letters, and isn't it great that other posters will point out any mistakes made - that way we navigate closer to the truth, instead of blindly lapping up what others say because it sounds good :)
BHP & Newcrest JV vehicle launches a bid for SOLG/CGP by Christmas.
It's all about Alpala.
Breathtaking if true!
Yes, and why is DGR so cheap, and potentially vulnerable? Hmmm, is it because NM froze it just as it was about to take off so that he could get himself and his mates a load of cheap shares?
Put the shoe on the other foot. If you were BHP what would you be planning to do? What's the best move? Wait for PFS and Porvenir to be derisked and then pitch an offer? Wait until after Ecuadorian elections in Feb 2021 and allow SOLG to drill Rio, Blanca, Hueca, Porvenir and possibly a couple others? Wait until SOLG shows LOI's on funding wit $1bln from Franco or other streams? I've been so many potential outcomes/models and everytime, I arrive at the same conclusion. The more time BHP give SOLG, the more expensive it gets. But equal to this, the more derisked it becomes and the more confident they become. Sometimes Super majors don't mind paying alot more for better defined and derisked assets as opposed to going for low ball buyouts with plenty of risk piled in. And then there's Barrick, Rio, Chinese, Codelco and others to worry about. Assuming BHP win out in the end, I can't see the above just stepping aside and not getting involved at all. NCM certainly have a role to play but they are outgunned by the likes of Barrick and BHP.
My conclusion is that if BHP make move, then the safest way to avoid going head to head with Barrick and co is to do a JV deal with NM that allows NM time to have a stab at the other 13 Alpala style targets. If BHP launch a hostile bid (out of the blue) then it risks another counter offer and them possibly losing out entirely. So perhaps the next corporate RNS to be releases will be by NM stating that SOLG has been approached by a number of interested parties regarding investment in the folio of assets which may or may not involve a full sale of the business. And then leave it at that for a few weeks until Citi have had sometime to review / manage the interest.
That's my guess work/thoughts.
Schlem, how do you square that argument with FN wanting to put in as much as $1b (at last count) towards the CAPEX? That's what the forward thinking royalty/streaming companies do - pick out the best assets that are in the late development stage and get in on the action. Streamers/smelters don't do deals with BHP/NCM because they can't get a look in. SOLG has the only investable Tier 1 Cu-Au asset out there at the moment - no wonder the financiers are queuing up round the block
Zoros, for someone (CD) who puts his opinions across with such authority, and has such a high opinion of his own line of thought, it needs pointing out when basic errors are presented as fact, less those who lap up his every word should be confused!
A lot of hot air coming from cgp and no real action or real direction.
If I were a holder of cgp I'd be really fecked off
Dbw of course covid can cause a whole number of delays:-)
Possibly until December with cv19 numbers rising and imagine where our regional and cgp will be by then.
A very risky call by Irwin and clan imo
Good afternoon bubble, yes and they were unsuccessful.
And I like the fact Franco came on board for this very reason, was it because Bhp was invested whose knows but quite possibly.
Exactly Schlemiel and another reason would should get another major/big investor on board so Bhp and Ncm don't think they hold all the cards whether jv equity or streaming.
Who wouldn't want a piece of this?
Long story short, based on the following Alpala-only calculations the SOLG stated strategy is assumed to result in:
- a theoretical take-over price target 4.24 times the current price, at 159.4
- a theoretical production stage price target 20.21 times the current price, at 760.1
which, if anywhere near NM's point of view, probably goes to explain why he is so keen to not sell cheap and achieve a "production-like" valuation.
How I get to those numbers...
Copper M&A at feasibility stage has transacted at an average $193/T in the last 10 years, and $311 for production stage companies.
Gold M&A at feasibility stage has transacted at an average $100/T for companies with low production cost estimated (<$800/Oz), while companies with low production cost like Barrick are valued at around $675/Oz.
Silver I am not too sure about, but currently the Gold/Silver value ratio is around 69.
So before production we are theoretically worth 61.5p for the copper, 89p for the gold, and 8.9p for the silver = 159.4p
If you recalculate with production valuations, it's 99.1p + 600.8p + 60.2p = 760.1
IF I HAVE MADE ANY MISTAKES, ONE OF YOU GOOD PEOPLE WILL SURENLY POINT THAT OUT.
So the gap between the current price and the theoretical price is result of the still missing BFS, the CGP hold-up, the now ending BHP stand-off period, and the SOLG resistance to takeovers before achieving anything close enough to a production valuation.
The BFS will therefore be a game changer IMHO, because it triggers potential official interest from the majorsand CGP needs to repay the debt at which point they have to give in to SOLG.
All in all, which we hate to wait, the future seems bright enough to me.
Happy Sunday everyone.
Red ill go for number 2,Quady ,BHP have made a bid for solg before
Nick has more pressing concerns than this CGP thing, he is building solid fortress walls around Mathers mines. As he impressed on us all, as an explorer it’s too explore the hell out of all they have as quick as they can. Any bid be it hostile or friendly will take time, he is using what time he has got too make this a major headache to all.
The value here is going up daily, gold and copper going up, Solgold won’t just need more drills they will need there own webinar channel for daily releases lol.
Surrounding Solgold in new deposits with outstanding cu - au readings are his walls of price protection, I thought he always held a good hand, but I think he now owns the damned casino, I have great faith in the man and his Ecuadorean partners.
CGP are not idiots but in this case as far as I can see, they have really missed the boat unless they make up with Mather in some way.
Imo of course, looking forward to the future, won’t say next week as things take time. GLA
How polite you are Schlemiel, you often say that you need the money to change your life. Money pays the bills, it doesn't change life's, unless you have direction. You ignore all evidence and facts, and then get annoyed, when the evidence and facts play out. When NM says what he is going to do, and then does it.
We needed BHP and Newcrest at the beginning, and now they are along for the ride, and quite rightly, as they played their part. To think we cannot raise the capital to build any mine is delusional.
But we will see that in the near future, with Alpala. Many said the FN deal would never happen, as NM was bluffing, as it would never be signed before BHP bid. No one will bid for Solgold, as no one has up till now.
"The Porvenir success makes SolGold one slippery and more expensive target, should BHP and Newcrest eventually move on the company, with BHP free to do so next following the expiration of a standstill agreement.
Today’s interest though is another Mather company, ASX-listed DGR Global. It owns 9.85% of SolGold, with the 204.23m shares worth about $A138m. That’s interesting given DGR – which has a bunch of other interests on the go - is trading at 9.1c for a $70m market cap."
Having BHP and Newcrest on our register convinced Franco to sign up to the royalty deal. The presence of those two majors on our register and the political backing of the Eckwardoorien government should not be underestimated
I suspect Franco appreciates that when BHP-Newcrest do take control of Alpala the process to production will be much swifter, cheaper and efficient
If you were a banker how risky would you perceive loaning debt capital to a cashed-up, easier access to debt capital BHP-Newcrest combo developing Alpala relative to a cash strapped explorer like SOLG that's never built a mine in its entire feckin' company life? You'd go with the former, obviously
Debt capital to SOLG is a gamble. Debt capital to BHP-Newcrest, BArrick, Rio etc etc is not so much a gamble but an investment
It's a mortgage provider loaning a 100% mortgage to a single person with a single income to buy a 250k property versus loaning money for the same property to a dual income couple with a cash balance of 500k and other assets to fall back on as security
And this is Ecaudor so bankers are gonna want a premium for loaning capital to companies operating a higher risk jurisdiction
Take away BHP and Newcrest and SOLG would struggle to raise this level of capital and those who think differently are talking out of their rectimus rearendimus
Now that makes a lot of sense scoott...
Clearly CGP weren't able to prevent the FNV deal. Nick/Ingo have referred to completing the Alpala funding entirely with streaming/debt.
If they did that, CGP would appear to be stuffed on two counts and maybe that's why they've been so hostile.
1 SOLG Full fund their part of Alpala to production
2 CGP have to find their prospective funding without being able to pledge their 15%. It matters not that they don't have to pay a sou until late 2021. The question is how they fund it after 2021.
No wonder they are desperate for a 'takeout' offer for their shares/stake. They get cash now to develop the rest of their unimpressive portfolio; they avoid the contingent funding liability that would have to be stated in their Accounts.
So I'm now coming round to the view of funding Alpala to development; 'banking' that and refocusing on the other 'Tier 1s'
The only things would vary the projection for Alpala would be"
1 A JV with say BHOP on terms agreeable to SOLG (don't think CGP would like that...jam tomorrow...) or
2 A blowout bid for the whole of SOLG, with my continuing favourite being Barrick
AIMHO as usual...
That’s the day BHP are free to vote against any board resolutions, and or submit their own. Things hopefully will be a little clearer after 19 Oct. Personally think NM has played a blinder, all he needs now is a couple of the other prospects to come in, hopefully Tier 1 and we have a multi billion company. Personally think best deal for Solg shareholders is to hive off with an upfront royalty deal, use the funds to prove up the other prospects in succession. Once gold is flowing 2025 hopefully we will have 3 to 6 other Tier 1’s proved up and we can seriously look to development of these through to production. I think NM has the ambition and capability of turning Solg into Another Rio Tinto, with a Barrick thrown in for the Gold. Anyway whatever the outcome the shares will not be nearly as affordable again. Gla
Err that's what I said?
I think in his recent interview Nick said it would be $52 million that CGP would owe for their costs of exploration
Miagi, don't be so hard on CD, c'mon. Technically he is correct is he not?
Solg debt fund CGP through to the FS upon which they will owe $52m.
Yes this is paid back through royalties post production but it is still "owed"...
And of course the 'piece de resistance' is that CGP then have to decide if they wish to contribute their 15% of develpment costs (est $3Bn and counting) towards building the little beauty. OUCH!