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There have been no meaningful updates on Investment Protection Agreement since renegotiation application in December 2022.
No estimates for timescales in annual report or MD&A. Always negotiations ongoing.
DG1Investor posted on 17th October, that Scott had said:
"IPA / EC and amended protection act - all have a great shot of being signed under Lasso"
Well, less than 2 weeks left...
I struggle to reconcile an Exploitation Agreement being signed, but the fundamental IPA, which may be key to the financials/outside investment and ultimate success of the project, drifting along indefinitely.
Perhaps mothballing the company, and a $150m+ gap vs. previous IPA commitment, has something to do with it.
Always amusing that Scott puts a positive spin on things in his chats with PIs. Strange he is not willing to give similar indications in quarterly comms?
NMM, I'm fairly sure at the start of the year he said that he expected both of these milestones to be completed by end of year. The exploitation agreement coming early was a welcome surprise, the time it's taking to get this revised IPA over the line, a slight concern.
Today's MD&A was the first time I've seen the Cascabel spend-to-date vs committed spelled out so clearly for shareholders. Previously I've been trying to piece together figures from the quarterly reports. Perhaps this is a subtle hint to suggest this is what the sticking point is?
Not sure $150m is a sticking point to someone likely shelling out $2bln+ whether in acquisition or full cost inc development.
But it's not a drop in the ocean either so any buyer or interested party would naturally like it settled.
Lets assume (just for example sake) that acquistion price on ENSA is $1.5bln or 40p a share. So $150m would equate to 4p a share. So if it gets amended or wiped, then I would expect Ecuador Gov to have something in return... no idea what but lets park that for time being. So 4p a share liability for buyer or discount required if not altered. Not a deal breaker at all but meaningful.
I'm not saying it's a sticking point for a buyer, it's a sticking point for Solg getting this over the line with the government.
And $150m is not exactly back of the sofa money when we're talking $2bn, it's a chunk.
Fortissimo, as SharketMare suggests you have the wrong end of the stick...
It's not about a potential buyer. It's about the Government. That they see a 'Developer' obliging to the committed spend.
Ecuador wants development, not mothballing. They don't want to be $150m 'short-changed'.
In particular, SolGold are presumably looking for a 5% reduction in income tax and other incentives. Similar to Solaris' IPA last Summer. That REALLY moves the dial on financials / PFS.
SM...do you really think the Govt won't take account of the 3 years in Ecuador lost to COVID...?
Or the prospective anger of BHP, Newmont and Jiangxi if their investment was lost?
Let alone the egg on face from the constant Goverment trumpeting of Cascabel...
There 2 schools a thought regarding Ecuador gov. Firstly... SOLG may well get all loose ends signed off by Lasso before he leaves on Nov 25th. But ironically... one has to question the impetus for Lasso and old gov to get this done. Why not just leave it to the new man? I'm sure Noboa would be delighted to be announcing a big deal in mining sector just weeks or days into his tenure. That said... he might want to tread softly on mining until he gets his feet under the table.
So who knows, but change in political powers clearly has or can hinder talks.
All the while Ecuador continues to cozy up with China
“Other countries in South America are intent on reaping the benefits of closer economic ties with China. Last January, Brazilian President Luiz Inácio Lula da Silva voiced his support for a prospective trade agreement between China and Mercosur, the trade bloc that also includes Uruguay, Argentina, and Paraguay. While talks for such an agreement have not started yet (and for a variety of reasons, including a lack of progress in implementing the bloc’s deal with the European Union, Paraguay’s non‐existent diplomatic relations with China and continued recognition of Taiwan, and the region’s ongoing de‐industrialization, may not materialize in the foreseeable future) the motivation for Brazil and other South American countries to enter into agreements with Beijing is clear: the region’s total trade with China has grown faster than trade with the United States in recent years. Moreover, China has already negotiated agreements with Chile, Peru, and most recently Ecuador”
https://www.cato.org/blog/china-fills-trade-void-us-international-economic-leadership-retreats