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Reminder Solg presentation today at 1 pm
I hope you guys have posed plenty of questions. This is the opportunity to learn. The presentation will be a non event unless an RNS is released prior to it.
Rare for a significant RNS to be released during trading hours.
I guess he'll be setting out the rationale for the transaction and I'm not expecting much else. Of course he won't be able to say anything interesting.
Lunch
It’s a presentation re merger
https://wp-solgold-2021.s3.eu-west-2.amazonaws.com/media/2022/10/SolGold-Cornerstone-Transaction-Investor-Presentation_2022-10-12.pdf
POTENTIAL SOURCES OF FUNDS
? Cornerstone holds 6.84% of SolGold shares
• 157.1 million shares with potential to raise in excess of US$30 million
• Potential for Cornerstone to place these shares to strategic investors
• Proceeds would be loaned to SolGold ahead of transaction closing on terms to be agreed
? SolGold is well progressed on a number of alternative funding options
• Strong interest in SolGold assets remains despite challenging short-term market dynamics
• Copper’s medium/long-term fundamentals intact
• Cascabel is well positioned to supply into an emerging structural deficit amid a weak broader project pipeline
From slide 8 of the deck. Looks like Option 1 is what LunchMoney has been saying since news of the merger was announced. Let's get that done ASAP, release the two catalysts and then get the lot sold off in the new year, please.
Ha Sharket
Was about to flag up page 8 too
Lunch … you’re welcome
$30,000,000 / 157,100,000 = $0.19 USD
Which equates to £0.17
Appreciate they say 'in excess of' but is it implied that we'd be looking at a placing those shares with a value of around 17p?
Look in the dropdown...theres an October presentation. Apart from what SM has posted...
Simplified structure enhances opportunity to bring in a long-term strategic investor
• Streamlined ownership at Cascabel and SolGold more attractive
• A larger stake in Cascabel is more attractive to a strategic partner
Addition of Cornerstone’s Ecuadorian and Chilean exploration portfolio
• 12.5% of Bramaderos JV with Sunstone Metals carried to production
• Interests in Cana Brava, Bella Maria and ENAMI Strategic Exploration Alliance in Ecuador, and Miocene in Chile
Significant re-rating potential
• Combined company currently trades at a discount on key value metrics
• Transaction a first step towards unlocking valu
Focused on value maximization
• A simplified structure sets the stage for a strategic review of the combined company
• Our top priority is maximizing value for all shareholders
"Potential short-term
funding through placing
of SolGold shares held
by Cornerstone"
to Mitsui I would guess? in which case perhaps to BHP's influence
Page 5 says we are at least 50% undervalued vs peers...before any bid...
Page 6 says minimum value of Cascabel is 78p/share
Page 7
COMBINED GROUP IN A SIGNIFICANTLY STRONGER POSITION TO ENSURE SHAREHOLDERS
ARE REWARDED FOR THE TIER 1 CASCABEL PROJECT
? SolGold to pursue a strategic review process focused on exploration of value creating alternatives
? Simplified ownership structure sets up the company to evaluate a range of value-enhancing options
? The strategic review process may include, but is not limited to, evaluating and pursuing the following:
• Evaluating financing alternatives for the combined group
• A spin-out of assets, other than the Cascabel Project, to all shareholders
• The direct or indirect acquisition of an interest in ENSA and/or the Cascabel Project howsoever effected
• Any other transaction or series of related transactions as may be agreed to between the partie
DBW, this is the only new bit I can see. I was wondering how they'd deal with the shares owned by CGP and this is an ingenious way to raise some cash.
Page 8
AN EMERGING COPPER GOLD MAJOR /8
POTENTIAL SOURCES OF FUNDS
? Cornerstone holds 6.84% of SolGold shares
• 157.1 million shares with potential to raise in excess of US$30 million
• Potential for Cornerstone to place these shares to strategic investors
• Proceeds would be loaned to SolGold ahead of transaction closing on terms to be agreed
? SolGold is well progressed on a number of alternative funding options
• Strong interest in SolGold assets remains despite challenging short-term market dynamics
• Copper’s medium/long-term fundamentals intact
• Cascabel is well positioned to supply into an emerging structural deficit amid a weak broader project pipeline
Add ....yep and who they chose to place them with
No short term cash problems then...
"
• 157.1 million shares with potential to raise in excess of US$30 million
• Potential for Cornerstone to place these shares to strategic investors
• Proceeds would be loaned to SolGold ahead of transaction closing on terms to be agreed
I have to say slide 5 is borderline insulting for long term holders of this share. Talking about 'meaningful rerating potential' from what is essentially a 5 year low.
This is big news. Nice strategic investor coming in forcing BHP to act. Amazing! Like the structure. Cash problem solved until mid 2023.
not enough cash to be able to drill anything
Orthern no need to drill. Sell the company!
JM …. That’s exactly what it is …. A message to the likes of BHP that we can sort funding and more importantly place these shares wherever we chose
ME REALLY LIKE !!!
So let's say Cornerstone place their shares with an entity they know has an interest in buying out SOLG. What would the resulting combined shareholding be of the New Entity + Mather + Blackrock + Norges (the last two I am speculating would be onside). That combined group would be in a stronger position to turn around to the likes of NCM and say - listen, either you are here to take control of the lot or you aren't, and if it's the latter, name your price. That could form the basis for an agreed bid, with NCM's ~10% added to the takeover group's combined holding, and push BHP into irrelevance.
It would be brilliant if after all this BHP lost out after trying for years to destabilise this company and shaft all us PIs out of a meaningful return.
SM, indeed it would. They were told to "put up or shut up" last year and did neither, so they deserve a good kicking.