The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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The much maligned Strategic Review will, in my opinion, be concluded within the next 25 trading days.
Its purpose was to evaluate and pursue value enhancing opportunities for the company.
1. A spin out of assets other than the Cascabel project.
It's my belief that all assets with the exception of Cascabel and Blanca Nieves will be deemed as non core, and will either be sold off or have earn in agreements relinquishing overall ownership. There are various things that make an announcement on this exciting. Firstly, it's my understanding that that Porvenir would not be available to potential suitors on it's own. All non core assets would only be available as a block. As the Ecuadorian government is set to withdraw concessions that are unused it makes perfect sense for SOLG to either offload them or arrange JV's to finance them. Furthermore, with the mining cadastre being closed since 2018, the only way for companies wishing to enter and mine in Ecuador is to arrange a deal with companies like SOLG who have already been granted the concessions.
2. The direct or indirect acquisition of an interest in the Cascabel project.
Following the revised PFS I believe there has been substantial interest from multiple entities in taking an interest in Cascabel. It remains to be seen whether these are further offtake agreements, earn in agreements or an outright sale of the asset. Personally I don't think they'll be offtakes and if it becomes a gold play I think Barrick are most likely but if it comes down to copper, with a high level Chinese delegation recently meeting with the Ecuadorian government, all things lead to China.
SOLG need $60m to fully derisk Cascabel,less than $40m if they sell the Cornerstone shares at a premium. The exciting thing here is copper gold and silver is only going up, every milestone in derisking Cascabel adds more value, and I firmly believe SOLGs financial future will be very much secured within the next 25 trading days. In securing that finance I'm pretty sure that will include a major announcement regarding Cascabel.
Traders can take their 10% but for me this is a 400, 500, 1000% opportunity over the coming months.
Agreed HfH...sund analysis...
However, it has been clear for 18 months that the intention has been to sell Solgold as a company.
Now it may well be that serious prospective bidders don't want the 89 other projects and some or all may be dealt with separately.
IMO the 'Strategic Review' has always been a smokescreen...especially the CGP investors want out, lock stock and barrel.
In the meantime, it was clear that there were ten EOIs for offtake and like DBH I think we will see the cash position secured for at least 2 years early this week, with a conditional Offtake agreement maybe for as little as the first year of production...a deal which could be cancelled in the event of a takeover.
Then watch the SP take off and I believe if it hit the 20s pretty quickly they might sell the CGP stake to the highest bidder PDQ, thereby possibly nullifying the need for the offtake...
We shall see...
20p+ by Friday Novice?
Red you may well be right. One thing is for sure, we hear what's been decided in May.
Divestment of assets, offtakes, earn ins, partial or full sale of Cascabel or the full sale of SOLG??
I for one can't wait to see what's made the SOLG execs so happy and bullish. Whatever it is, it's going to be very good news for us holders. Strap yourself in!
One thing which puzzles me is this: How were the insiders allowed to buy shares knowing that a deal is being discussed with the Chinese?
A new interview from Willem:
https://youtu.be/29a8mjIzwV8?si=V4x7NQVJgXLyc-Qy
The blackout period mentioned by Scott didn't last long. Since they bought shares tangible proposals have been received meaning they are now in an extended close period. That's my understanding.
Thanks Eloro
All highly relevant ….. especially Solg from 20mins
I know you don’t rate Scott but I think you’ll see the benefits of what he’s been doing in the next couple of weeks
Eloro thanks for posting.
As Willem says "SOLG should be trading at $1bn"
Vastly undervalued but it will rerate!
Cheers DBW, I don't rate Scott because he hasn't proven himself to my satisfaction since his appointment. I do however rate Bob Sangha very highly. Any positive outcomes here will be down to his efforts!
Thanks HfH, very hopeful re tangible proposals! Let's hope we will be having a lovely summer👍
He said $3bln... not $1bln!
Fort, in the 2nd interview, Willem said that Solg should be trading at $1B, re market cap.
So about 27p a share? Not sure where drake got his 66p from earlier on a $3bn valuation with about 3bn shares in issue
Unless he changes his dollars at cash converters
Last interview he said we were valued at $300m and we weee worth 10x that
Eloro, just as well your satisfaction is irrelevant, isn't it.
Eloro thinks he's actually relevant with his sh*te talk , say no more.
Addicknt et all.
Lets make a collective effort to keep thing amicable as we near the finishing line.
I have taken a massive hit on a delisted investment in recent times & in no mood for the diatribe (and yes I am guilty as many).
Don't look in Damers , it won't affect the outcome of your investment.
Not that rubbish polymeric was it?!
Solid Middelkoop interview "when you have these incredible large-scale discoveries, it's not about the quality of the management, it's not even about the country and the location, it's just about who will eventually own it. the size of the [Solgold] discovery will guarantee that it will be bought out. The tier 1/tier 2 projects will always be bought out.."
That and knowing the Chinese are working on it, along with it's 3bn valuation is a real affirmation of Solg's future.
Covgaz, unlike you I don't post here in an effort to be relevant. I have way more important things going on in my life which are far more important. Further, I am not seeking your affirmation. At least I think whereas I have an image of you in your mom's attic playing with the 5 sisters. I got to ask, which hand do you use?😆
If I heard him correctly, he unwittingly highlighted an anomaly in Glencore's strategy. He stated they have said they are unwilling to invest in copper at current prices, but that they know it will increase in value. If this is actually the case surely they'd be investing now? Why wait for values to move up? Seems slightly odd thinking, particularly as it relates to new and as yet undeveloped discoveries. I'd have thought now is exactly the right time to buy.
Well , that reply just about sums you up Eloro , pathetic cry baby.
Expecting a big Rerate starting in a few minutes... big article on radio 4 again this morning regards the BHP/AAL offer.
55p someday soon!!!
Agree addicknt,
Markets are supposed to be forward thinking but it seems the big players appear very slow to see what's coming even though the data is out there to support it. Perhaps there's a world wide conspiracy... to keep copper boom from happening so it helps with margins and inflation issues near term??? Remember, you have US election this year along with UK. US have been fiddling away since covid to prevent Gold from rising and keep the dollar supported but after 4 years of manipulation even the planks at the Fed reserve can't hide the US issues and subsequently the world is fast realising that PoG is more secure and more valuable to hold than the US dollar. The penny drops... when they want it dropped or when they can't stop it dropping.
Markets are a joke these days... they'll price some AI based business at $50bln based on forward predictions of 5 to 6 years out yet wont price copper or copper players 2 years out. Crazy... it's like the invisible is more valuable than the solid genuine article.... earths resources.
Always been the case . Look at the dot com boom around 2000. Mass hysteria and madness of crowds comes to mind. Our time will come, just wish it was a bit sooner !