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Redknight - I'm not following your thought process here.
What difference does it make to anyone if the Imbabura province assets are retained by SolGold and everything else spun out?
Cascabel is the main driver of value.
SolGold (Cascabel) can then be sold for c.95% of the value the full company would be worth. More acquirers with just an interest in Cascabel would potentially come to the table which betters the chances of getting a bidding war.
A full sale doesn't suit everybody. A spin off can work for everybody.
Agreed rcgl2.
The problem rcgl2 is that is everything.
So tells us nothing.
The company has already telegraphed this possible outcome twice in it's description of the strategic review:
"As previously disclosed, the Strategic Review includes, among other things, evaluating and pursuing value enhancing opportunities for the Company such as:
· evaluating financing alternatives for the Company that endorse project value;
· a spin-out of assets, other than the Cascabel project, to all shareholders;
· the direct or indirect sale of an interest in the Cascabel project at prices that endorse project value howsoever effected; or
· any other transaction or series of related transactions."
Bullet number 2, spin out everything except Cascabel to all of us, the newco operating as an explorer and early stage developer, basically Solgold Part 2. Keep Cascabel within the Solgold wrapper and someone buys out Solgold, avoiding any poor tax consequences of selling ENSA itself out of Solg?
This seems like a better outcome than the current status of Solg being valued almost solely on Cascabel with no value attributed to anything else, and if someone bids for the entirety of Solg now they get all the regionals chucked in for peanuts/nothing and we never benefit from any future value contained within them.
'Full value' will b e determined by the final bidder...
I can't see why CGP would want to throw their lot in with SOLG and then accept a JV that still leaves production 7 years away and only a microscopic participation.
I would sruggle to believe you would get even half of full value with a JV and that would leave us struggling to get any v alue for the other projects without having to invest all the money we got for Cascabel...
Just look at GGP and Havieron...a cautionary tale...
The announcement of a 90% J/V might spike the price to, say 40p from which I would expect it to drift back again...
Nothing less than a takeover battle will do for me...
FTJNY top of the range you quoted is 500%...
That’s the price range I’m expecting for the whole lot Bozi..
Disappointing
I won't dispute any of that Orthern.
But a sale of Cascabel, even for 40-50p, gives everyone options. Whether it's full cash or part cash part scrip.
The risk from our side as investors is we get strong-armed out of Cascabel on the premise that it's economically a bit marginal for anyone looking to borrow to fund construction only for the acquirer of SolGold whole to go and find a blockbuster tier one in one of our other areas.
That would be a sickener for me.
Add - I appreciate why you say that - some will be disgruntled at not being able to sell NewCo straight away but they'd have to just lump it whilst SOLG got prepared. Plus, if a demerger was done 1:10 then any NewCo holding would only be minor anyway, assuming that the company carried an opening value of £20-50m.
The main benefit is that everyone would still get their sale of Cascabel. It also paves the way for the likes of Mitsui who might have just an interest in that asset to compete with the BHPs and the Jiangxi's.
NM wouldn't be in the chair for me. I'd appoint independently. If there's any managers of promise in SOLG then I'd consider them along with the rest of the labour market.
Good posts Mike, just had a read.
Irwin is undoubtedly close to the action being a significant holder of CGP and I'm sure he fancies himself as a dealmaker as well.
I definitely thought it was worth raising again on the premise that I can't see a downside for anybody.
Bozi, I agree it would not release full value, but have come to the conclusion, we are not going to see full value… not in any true sense.
I wrote on the 15th that
“Our board need to get the PFS out this quarter.. the full PFS is already 2 years behind schedule….. it was originally delayed due to it needing to be reworked to be more efficient. When it was released, it was released with just OK IRR figures and a caveat saying it would be updated promising improved finances. (I don’t have to figures to hand, but was in the region of several hundred million of improvements).
To delay it now, would signal to be markets the improvements promised have not been found..
It could be this has forced the strategic review.. and understandably, Irwin, and CGP and now Mather, just want an out at a respectable price now the fantasy of becoming the next major has died.”
I believe this is where we are now.. I believe the IRR was never amazing, and the PFS update was a failure when it comes to improving it… it was due to be released any time now, and we had been told on more than 1 occasion it was on schedule… so if the figures were great, it would have been released…
I believe both sides have now accepted the only way for an acceptable pay out is to merger and try to sell.. or do a 90% JV to production with someone more capable than our lot..
Just my opinion of course…. But it’s why I do not expect anything close to what we were led to believe could be full value
Bozi, perfectly feasible, but I suspect the delayed IPO would be a problem.
Simply stating that the company "intends" to go public in due course is unlikely to be very appealing. Of course, a team could be lined-up now and would be ready to roll once the deal had been announced - and who knows, that may be the plan...with NM in the chair?
I've always said I wouldn't mind this approach provided Cascabel was sold and the proceeds distributed to shareholders.
Fully aligned with that thought process Bozi,
See previous posts
10 Oct 2022 17:44 : Tax Hypothetical
24 Nov 2022 09:47 : RE: Irwin tweet
Thing I don't get however is how much actual sway and insider knowledge does Irwin actually have? His tweets imply he knows something but surely if he knew something it would have to be disclosed via RNS. Whilst I note and read his tweets with interest, I treat with some caution for the above reason and I suppose only really give them any attention at all because of his perceived 'expert' status and experience. We all know however how perception of knowledge is not always closely aligned to actual knowledge.
That would be disappointing Orthern.
Flogging the lot in one go is the lazy approach and cannot possibly be the best way to attain full value for all shareholders.
With a full sale, plenty of shareholders who aren't desperate for an out, lose out.
With a spin out everyone gets to make their own decision and NewCo can still progress in Ecuador.
The IPO isn't important. It just needs a company creating, the assets rolled into it and a corporate action to do a demerger and maybe even a rights issue.
It's a no brainer.
I’m assuming that I was a typo, and you meant ‘on going miss management’
Without a CFO any spin out seems unlikely… same could probably be assumed for a JV… and Mather has said on multiple occasions, that any sale of just Cascabel has large tax implications..
Announce the date of the merger vote, followed swiftly, ideally same RNS, that a data room is open for a sale of the whole of Solg.. but Solg in all the years I have held their shares, don’t do anything swiftly
Add - I don't disagree at all on that.
But what is stopping the following:
SolGold announces completion of strategic review and announces two initiatives.
1.) SolGold decides to proceed with a spin out of the regional licences into a new vehicle. It names a full management team and board including new people.
2.) SolGold updates the market on offers for Cascabel and surrounding licences.
Shares of the spin out company would probably be unlisted to begin with, with an IPO tbc. SolGold would likely allocate a small amount of cash to NewCo for G&A and maybe a small budget to carry on working at Porvenir and attack the next licence with the necessary permits.
SOLG shareholders could be awarded shares in NewCo at a rate of say 1:10 SolGold.
NewCo then does an IPO after say 6 months with the necessary knowledge and expertise in situ.
In the meantime everyone gets their payout from a SolGold sale and can then go do as they please with those funds.
Once NewCo IPOs everyone can then stick, twist or bail.
This is something Atlantic Lithium have done in the last 12 months with great success. They now have a quality and growing lithium asset packaged up and gold (and lithium) assets in the spin out.
It sticks to the 'next cab off the rank' mantra and it gives shareholders multiple bites at the cherry.
I can't see any downside to this. Can you?
Bozi, that's not the point - I'm not talking about the process, but the ongoing management of the company. The market needs to see permanent board members, their track record and ability to manage the company. It's a non-starter without a CEO/CFO.
In the uk the rules are such that at 30% a company has to make a bid. In Aus and Canada the rules are more stringent and at 20% and perspective bidder has to declare their intentions…. Wonder what price NCM would be a seller at ?
Equally if the Chinese were to take the CGP stake too it would be then be interesting to see if they have been adding on the side or via Valuestone …. 20% wouldn’t be a million miles away
Forte, I think one aspect is upside down here.
I doubt that we need to complete the SR to then put the sale sign out.
I am pretty confident that a Dataroom has been open for a while and the company is rather hoping that the result of the SR is accompanied by some offer or financing structure that counters the theoretical sale prices that DZ discussed in the last presentation (the 78p slide).
Bu that is me...
I'm expecting a few TR1's to pop up when we get the new issue on Dec 9th. Dilution of approx 6.3% means BHP and NCM both drop below 13% level. A few others might be close to the thresholds. Blackrock might need to tidy up their 'instruments' lol or also face a TR1. Might explain why we've had over 40m to 50m share traded in last wee and a half.
Some might like the lack of transparency that comes with skirting around within the 1% thresholds, so will want to maintain that stance.
Thank you Q.
To be honest it's still better to talk about other shares than to start the mutual attacks and insults, at least we are sharing the same goals.....
There's no way Fawzi would answer a loaded question like that - not with any substance anyway. It also wouldn't be a fair position to put him in.
Just my view of course.
As we saying Bob Sangha can manage a billion dollar tender process but not an IPO of an exploration NewCo?
Come on fellas.
Good morning Bozi I am aware it's not for Solgold to manage the share price.
I was looking for a roundabout way to ask Solgold when they think they will have some share changing news.
In other words we have had lots of various innuendo but no substance.
Just wanted to know if they have a rough timescale.
Fort, you make a very good point about the CFO. In the absence of permanent executive officers, there's no way we could complete an IPO. And there hasn't been any suggestion that we're looking for them.