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Bid this month Red
PS...
SOLG MCap 751m
ATYM £538m (but P/E of c3.0 times EBITDA)...
GGP £509m
They would probably argue that they needed too finally tie up the corporate governance but I don't believe anyone would, have pilloried them if they'd waited until December...
And they've agreed salaries on appointment for Darryl and Ayten...so...
This looks like a naked opportunity to provide generous 'parachutes' for those two and probably other Executives in the event of a takeover bid.
It is fair to contend that a potential remuneration of almost £5m a year if all Short Term targets are met, is excessive for Darryl and neither he nor Aytewn have options.
Although it is right to point out that the EGN was originally scheduled for May, the June 30 date looks uncoincidentally like a determination to get these proposals agreed in time to announce options packages the following day or soon thereafter...
However...I've just checked GGP and they have 103m options outstanding of which 98m are exercisable between 1.5 and 3p. Indeed Directors made aggregate gains of £4.83m during the last financial year...
However, total salaries for 2020 were a mere £928k split between two Exec Directors.
Meanwhile the outstanding options at ATYM at their last year end were 3,841,750 exercisable at an averge price of £2.154, cf a current SPO of 385p and...
The total remuneration for Board and Executives seems to have been 2.335m Euros in 2021 and Alberto Lavandeira, who brought the company to production, took the SP from 80p to 450p and produced EBITDA of 199m Euros on T/O of 406m Euros from 15.8m tonnes of ore mined, appears to be on 546,000 Euros a year...
So in conclusion...
The prospective options and potential earnings for Darryl especially are excessive, but...together with the exercise price of 56p and the rush to establish all this by june 30, suggests that the whole exercise is in contemplation of a possible takeover bid(s).
Indeed, why would Darryl or especially Ayten join the company at a time when the market was rife with solid takeover stories unless they were richly compensated in that event.
Sorry LunchMoney you are correct, I answered on the 4 articles. I just want a proper roadmap.
The good news is we are getting there. To be honest, I don't think enough PIs will vote, it will be the major block holders.
Morning RK ...... In your opinion, in the "normal" course of events, would any of these items require an EGM. Surely in "normal circumstances" they'd have simply waited until December for the next scheduled AGM??
This meeting has been called on the last day of the current financial year for a reason...bearing in mind it's the first time for 12 years we have felt the need to call an EGM ...... In my opinion this is their last chance to issue options at anywhere near these levels and they know it .
Totally agree with you re Q too
RK1 - that may well be the case but we are keen to maintain that everyone has the right to an opinion providing they are not being abusive or offensive.
I do share some common ground with Quady on certain topics but I do believe here that aligning remuneration with shareholder returns is fair.
Quady - for example, if Lasso woke up one morning and decided that no more shovels were to hit his lands then SOLG would struggle to meet it's operational targets. The share price would drop like a stone and we'd return to being a penny stock, so what you're proposing and what has been proposed does go hand in hand.
I still maintain that it isn't for the management to manage the share price (they should manage the company) but the proposed incentives mean they now have to take an active interest in investors returns if they want to receive top dollar.
You're wasting your time Bozi.
Quady is stubbornly uncomprehending and NEVER admits he's wrong or apologises.....
Quady, without wanting to sound like certain others, there's a reason they might not want to tie their remuneration to operational milestones...
You would think that share price is linked to progress and metal prices, so there's still some correlation.
I agree with you that not enough is really said about medium term plans. Now the PFS is out it's time to hear about how SOLG plans to develop Tandy and Alpala through to nameplate production, regardless of whether we think its going to happen or not.
Morning LunchMoney, I have read your well reasoned argument.
However for me, I want to hear about the advanced build of Alpala.
I find resolution 4 to be short terminism.
The share price on this share goes up and comes down. For me it's the wrong metric. Let's have a system that rewards progress.
So for example, options that are exercisable on the journey of building Alpala, and makes the director's focus on its core business.
I agree totally with addicknt's original post. It strikes me that with this kind of nonsense going on, and millions being found missing, the SP would normally have fallen to 19p - because if this is all there really is in front of us right now, it's a pretty poor show with nothing, absolutely nothing, to offer or entice a PI to buy in or hang on for the next several years.
The gravity defying 32/33p level we are currently suggests strongly to me that there's a definite bid possibility swelling beneath us that is not built on the froth and frenzy of speculation. We don't seem to have any fly by night merchants on the board right now hyping this up, and I don't believe recent big buyers have exited. So if the machinations of the BoD haven't justified this 32p level, what is justifying it? To my mind, the downward pressure of management failings is being equalised by the upward pressure of the likelihood of an imminent bid - otherwise we would (deservedly) be back at 19p because what's on the menu right now is slim pickings for us PIs.
Well spoken BNC, we need a sensible way forward and the PI's hold the sway.
Pretty much my thoughts (and some others I know on here too) there addinkt!
Resounding no on all fronts from me!
Rs
Bn.c
But while some view these rulings as setbacks, others, including some lawyers, see the courts as clarifying the rules for mining companies in the face of deficient or absent legislation. Following a mandate from the Constitutional Court, the government is readying legislation to regulate the consultations that must be carried out for investment projects near Indigenous lands.
Meanwhile, industry advocates hope that the economic benefits of mining will help to shift public opinion. With just two mines in production, minerals are already Ecuador’s fourth largest export behind oil, shrimp, and bananas. A study commissioned by the Ecuadorian Mining Chamber found that developing the 12 most advanced mining projects would attract US$16 billion of investment and add 1.2 million jobs by the end of the decade.
The impact is even greater on the ground. Development of the Fruta del Norte and Mirador mines has transformed the southeastern province of Zamora Chinchipe from a sleepy backwater into one of Ecuador’s most dynamic economies, with hundreds of new jobs and businesses created over the last five years. Average incomes in the Yantzaza district, home to Fruta del Norte, are now the third highest in country, behind Quito and Guayaquil.
People elsewhere in the country would like to share these benefits, Ycaza says.
“This romantic environmentalism, which has won votes in recent elections, has lost momentum,” he says.
In the meantime, President Lasso has ordered state mining company ENAMI EP to seek investors to develop its extensive portfolio of mining claims.
“We have a huge number of opportunities from a geological point of view that we can offer,” says ENAMI executive director Julian Agurto. The company is also working to resolve a dispute with Chile’s Codelco, currently in arbitration proceedings, which has snagged the giant Llurimagua copper project.
A greater challenge will be tackling illegal mining, a scourge in many parts of South America, which often leaves a trail of violent crime and environmental degradation.
Lasso has promised to eradicate the problem, which taints public opinion about legal mining, but Flores admits his agency lacks the necessary manpower. A raid last February by police and inspectors on a gold rush in the Ecuadorean rainforest seized almost 150 backhoes.
Environmentalist and Indigenous movements that oppose mining in large parts of the country remain a potent force. Yaku Pérez, an anti-mining activist, won almost as many votes as Lasso in last year’s election and the Pachakutik Indigenous party he represented is the second largest bloc in the National Assembly.
In a referendum last year, residents of Cuenca, Ecuador’s third largest city, voted overwhelmingly to ban mining near local watersheds, including part of Dundee’s Loma Larga project (although a court has said the result is not retroactive). Activists are now collecting signatures in Quito to hold a similar vote on the 2,860-sq.-km Choco Andino, a UNESCO biosphere reserve.
Environmentalists have also become adept at using the courts to block projects. In December 2021, the Constitutional Court revoked the permit granted to Cornerstone Capital Resources’ (TSXV: CGP; US-OTC: CTNXF) Rio Magdalena project in northwest Ecuador, arguing that proper consultations had not been carried out.
Access to authorities has also improved (the Ecuadorian Mining Chamber has met with President Lasso four times since he took office), and the appointment in April of mine engineer Xavier Vera as Minister of Energy and Mines, a post usually held by oilmen, also bodes well for the sector.
Lasso’s efforts have not gone unnoticed. In the Fraser Institute’s annual survey of mining companies released in April, Ecuador’s score jumped to 72.79 points, making it the most attractive country in South America.
That’s partly due to increased political uncertainty in Chile, Colombia, and Peru, but also real progress made in Ecuador over the last year.
In May, the Environment Ministry granted an environmental licence to Atico’s La Plata underground gold project, which could begin construction next year. Similar announcements are expected on Loma Larga and Domo in the coming weeks.
The government has also signed pioneering investment protection agreements with Lumina Gold and SolGold, offering legal certainty while the companies advance their projects in return for guaranteed investments totalling almost US$500 million.
Development of these two large projects would put Ecuador firmly on the map as one of South America’s leading mineral producers. According to a prefeasibility study published in April, a US$2.7-billion underground project at SolGold’s Cascabel could produce almost 200,000 tonnes of copper, 680,000 ounces of gold, and 1.3 million oz. silver annually during its first five years in production.
And while its registry of mining property remains closed since 2018 following pressure from Indigenous communities, Lasso’s government has now begun to process applications made before the suspension. It could reopen to new applications by the end of the year, Guillermo Flores, executive director of mining and energy regulator ARCERNNR, told The Northern Miner.
With dozens of mining companies already in Ecuador and others waiting to get a foothold, that could trigger a rush for claims and this time the agency will have the systems and staff in place to ensure transparency and greater legal certainty, some industry observers say.
Since taking office a year ago, President Guillermo Lasso has placed his chips firmly on mining to bring the investment and jobs needed to revitalize Ecuador’s economy.
Under an action plan launched in August 2021, the government set out a wide-ranging to-do list to get the sector moving, from speeding up permitting and reopening the claims system to convincing a sometimes-skeptical public of the benefits mining can bring.
The government’s aim is to push five priority projects — Atico Mining’s (TSXV: ATY; US-OTC: ATCMF) La Plata; Dundee Precious Metals’ (TSX: DPM; US-OTC: DPMLF) Loma Larga; Adventus Mining’s (TSXV: ADZN; US-OTC: ADVZF) Domo; Lumina Gold´s (TSXV: LUM; US-OTC: LMGDF) Cangrejo and SolGold’s (TSX: SOLG; LSE: SOLG) Cascabel) — into construction by the time it stands down in 2025.
It’s a tall task, but Ecuador is not starting from scratch. The country’s two first industrial-scale mines (Ecuacorriente’s US$1.4-billion Mirador copper mine and Lundin Gold’s (TSX: LUN) US$700-million Fruta del Norte operation) entered production in 2019 and a slew of majors and minors have been scouring the country for a decade.
Progress slowed amid a rise in anti-mining protests, bureaucratic and legal tangles and then a devastating pandemic., but things have started to change.
Environmental licences, which once took close to two years to approve, now take less than a year, according to Andres Ycaza, a mining lawyer and partner at Quito-based Flor, Bustamante, Pizarro & Hurtado Abogados.
Solid day today UT at 33.55 up 3.4%
decent starting point for a takeover auction
Q, absolutely.
It's very easy to envisage a situation whereby the share price becomes inflated simply by virtue of bid speculation. The board will have done absolutely nothing to achieve this, but their remuneration will increase.
I also don't like the fact that we have two new directors and the first thing the board seems to be concerned about is how can we give them far more money than we we agreed to pay them only a matter of months ago? They accepted the terms they were offered and I have seen nothing to suggest they are suddenly worth a lot more.
I know I'm a bit old fashioned about this sort of thing, but I really don't like it.
Z - can you name me one person who would be happy being prised out of their role (by shareholders no less) as the CEO of one of the most exciting junior mining stories of the last decade?
I don't think you can.
You're entitled to call Mather an egotist if you feel like that. I'm not going to refute that.
There's no emotion here as far as I'm concerned. I'm simply correcting a couple of wrongs. I have no issues with Cazzubbo either and am excited to see what direction the company can go in. I suspect you're right in terms of his broader goals and I can only hope that the outcome will have been worth waiting for (and arguing about ha).
Addicknt and Quady - posts of the day!
Z
Agreed Addicknt I will also be voting against the motions.
I support the BOD, but to me this looks like a win win situation for the BOD no matter what the share price does.
I don't understand Redknight's earlier post as he puts in the relevant information and seems to ignore what he has said and support higher wages if they fail on the share price and a higher bonus with higher wages if they succeed on the share price.
That is not a proper incentive package for a company that doesn't earn any revenue at the current time.