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DartFrog, in general, as I understand, exploration companies can be valued at any point during the lifecycle of exploration to production in a quick and dirty way by using a dollar value per unit of resource, which in my spreadsheet I keep as follows:
Exploration: 0.05 USD / Pound Cu
Feasibility: 0.08 USD
Development: 0.25 USD
Production 0.31 USD
Of course you can massage those values if you find better benchmarks.
Right now, I value SOLG in exploration stage between 50p and 55p, so a good buy at 20p.
Then to your question, in my opinion it depends on the probability you allocate to reaching any of those milestones and the relevance of time in your investment strategy. 40p very likely within a year may be worth more than 400p much less likely in 10 years, but that depends on your appetite.
Good luck for your investment.
Good afternoon sipptrader, agreed, also figure will change, as more value is attributed to other tenements. It is a rough calculation, as I am not an accountant. So although I can read company accounts, I look at various fundamentals, and not how the figures were reached. Obviously this is not done in isolation. All the best.
Good afternoon DartFrog, I think fair points, and like everyone else I cannot give you a value. What I can do However is give you some enjoyable homework, which I did after the PEA ( Partly, as I will explain below ), so out of date already.
Firstly, I would say a good chance of acquiring the money, with little dilution, in order to build and put into production. We don't get that for nothing if we stream, but if we get Bank loans and streaming mix, then I like that idea better. A quick look at the Silver, Gold and most important of all Copper, mined in the first ten years. ( All in concentrate of course ). Will give you your first figure. Work out a rough estimate of the running costs. ( I am expecting to get that with the PFS, please correct me somebody, if I am wrong ). This will give us the gross profit. Take away taxes and monies, pushed into development, and of course the annual repaying of any debt, and this will roughly give you the net profit. Then work out the size of the dividend.
As I said I did this after the PEA, but don't have an answer. as the running of the mine figure, eludes me. What I can say, is that the Gold price was lower, and still looked good. I will Do this calculation, as soon as we have the missing data, and dare say many more will, and they will post as well. Be nice if we all agree, but we won't as all calculated differently. However if we find, we are all in the same ball park, and that allows a dividend. Then this will rerate, and depending on our starting point, this could be rapidly, after all who wouldn't want to own a 20 pence share, that paid a 40 pence dividend. Last bit is tongue in check, as missing the operating costs, But I am beginning to enjoy the ride. I would want to say something about a buyout. To me a buyout in real terms, is someone like BHP, buying us and then delisting, and we become part of BHP. To do this they require 90% of the shares. I appreciate that they can make this happen, if they get 51% control, as they can keep dividends low, and force down the price. Think about the Verizon operation and Vodafone. But let's see them get 50% first, that will cost them, and we will still make money, however it will be a fraction of what we get, by going to production. All in my opinion of course. Good luck.
The Solgold holdings of my wife and myself average just under 26p a share. My first holding was purchased at almost 38p in November 2018 and my second at a similar price 3 months later. What helped give me confidence at the time was BHP's holding in the company. At the time you could say I was an 'Exiteer' as I had presumed BHP would make a bid. Now that I have a much bigger holding, I am very much a 'Remainer' because if a successful bid came in at 40p, I would make a profit of only £14,000. If it were £1, I or we (including my wife's holding), would make nearly £70,000. And here is the dilemma: do we accept that, which would be very tempting, or should we wait 10 years or so for £10 per share when there are 4 Alpala's being mined which would realise us £790,000? Am I being too greedy?
Of course that is all hypothetical as whether or when a bid is accepted is not down to me, a very small shareholder, but the owners of the various blocks of shares. This I will watch with interest. To me Newcrest is the spoilt baby throwing its toys out of the pram whereas BHP has, as far as I have seen, not reacted in any way. If they, or possibly Newcrest, were going to make a bid, would it not be in their interest to wait until we were nearer to production when all the donkey work has been done? No doubt all the prospective bidders are weighing up the cost at any particular time and the likelihood of building up a winning stake.
If we go to production, then I presume there will be a rights issue to make up part of the cash shortfall, but at that time with the goal in sight that should not be a problem.
Of course anyone should be able to get out at anytime, or top slice, or whatever, if they need to.
These are just my musings.