Firering Strategic Minerals: From explorer to producer. Watch the video here.
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Https://www.visualcapitalist.com/visualizing-the-life-cycle-of-a-mineral-discovery/
While this period sucks it does seem to sum up where SOLG is today and offers some hope for 2024. Any thoughts?
Yes - this isn't an orphan period in the way the asset development cycle means.
The asset development cycle relies on a middle chunk where exploration subsides and studies take priority.
SOLG released the PFS 16 months ago. They're not working on making that study bankable.
We're in a period of prolonged drift because Cascabel isn't really viable unless they come up with a smart way to get at the high grade core earlier and someone with deep pockets agrees to take it on.
As much as none of us like this it is a distressed asset of significance.
Bozi, what frustrates me is that we've also flagged to the market and any potential buyer when we will run out of cash. In absence of a bid from a competitor, a sitting on hands approach for buyers until we near that time seems to make sense, as the company is doing very little other than negotiating (important) agreement with the government.
The updated Cascabel PFS in Q1 is going to have to be a real rabbit from hat moment from Scott if we want to have any chance of further fundraising next year at a price that isn't single digits.
I would add that I am banking on some sort of deal before we reach that stage, or else I wouldn't be invested.
Shark. What seems strange to me is. you sold out in april.
You then say you bought back in last week.
Today your bemoaning all and sundry about solg again.
Yet the fact is, nothings altered from last Friday when you claim to have bought in again.
So my question is. Why buy back in, in the first place.
Your posts get weirder by the day.
Maybe time to sell up again
Good morning SharketMare.
I believe you are correct on signalling that we will continue to burn cash to anyone who wants to buy Solgold.
But I don't believe we are going to be sold.
All the indications are we are going to production with a partner.
I also believe we will be the majority stakeholder and we will target the high grade gold at Cascabel. Possibly Tandy.
Just for clarity shark.
Your post from 4th sept.
" I bought back in to SOLG last week ~15% lower than when I sold. At the time you claimed I'd be buying back in around this time at a much higher price."
So to repeat my question. Why buy back in last week. To complain about solg management this week.
Sort of takes some fathoming out.
Q, if we do go down the JV route I struggle to see how we would retain majority ownership. I don't think we have the credibility to raise the requisite funds in that scenario to fund our share of development.
Moreover, why would any major with "deep pockets" want to be a junior partner in such an arrangement?
Quady. Explain why bhp, the Chinese or whoever, would invest billions in solg, who are running out of money and desperate for a buyer. To become the junior partner.
I should stick to chess, because your clearly clueless on joint ventures
Agree SM - amateurish.
The problem with SolGold is it has convinced us investors that it can only work on one thing at a time.
I'm not sure what current headcount is but even with 100 employees the company should be capable of multitasking.
Bob and Dan are leading the SR and I'd assume their being contracted, so it still leaves 100 employees to manage comms with govt, work on a Cascabel optimisation, do some regional exploration, update the website, etc.
But we seem incapable.
SharketMare I don't have the answer to your question.
But I can speculate.
For example we know we are looking at a first cut which at a later stage convert to a full block cave operation.
So lending can be staged.
We may do another royalty or offtake agreement to fund our share.
Then a JV partner buys in once they know the lay of the land to fund their share.
We are told that we have many parties looking at the data room, so if that is the way forward then we have competitive tension.
Lastly more shares can be issued in a limited way.
For me the important part of the strategic review is how much lower is the first open cut ramp going to cost and the associated infrastructure costs to get us to production and start providing revenue.
I believe it's going to be a lot less than 2.9 billion dollars.
Quady, I refer you to my earlier post ref your views.
CLUELESS
Good morning Quady.. Im not sure there is any evidence to support Tandy as a truly viable, open pit option... Tandy so far is just maybes, potentially and hopefully... and I'm pretty sure non of Tandy is not High grade..
I believe the fact the SR is dragging out, indeed, has now been classed as open ended, with no signs of any deal being done, tells us Cascabel is maybe not what Solgold originally hoped it was, or what they bragged about.
Just my opinion, but I think there must be real, underlying issues as to why no major has made any move since the days of the PFS... They could be just government, they could simply be current inflationary environment issues, but they could also be far more fundamental.. Many majors have been and cast their eyes over the data room, according to our management, we have had site visits, and claims of parties in Due Diligence over the recent years, yet non have decided they should make a move... even at these low prices...
Q, I think you are confusing the strategic review with the revisions to the approach at Cascabel, which are two separate workstreams.
The strategic review is open ended and has apparently been delayed/slowed in progress due to the political situation in Ecuador.
The new approach to Cascabel will be released in Q1 2024, and will not have been impacted by the politics as far as I can tell.
Guys, I find it hard to accept that Franco Navada and Osisko would have extended money to Solg while believing that Cascabel is not a valuable asset.
Warren Irwin repeated many times what an excellent asset we have, and he also has a huge chunk of his investors money invested in Solg.
True, I am not impressed with Scott's progress so far, particularly after his comments about previous management. Lots of folks with skin in the game, so until I see them jumping, I will continue to believe that we have a valuable tier 1 asset.
Eloro. read your post.
Warren Irwin repeated many times what an excellent asset we have, and he also has a huge chunk of his investors money invested in Solg.
do you maybe think him saying what an excellent asset we have, has anything to do with the second part of your sentence.
HE ALSO HAS A HUGE CHUNK OF HIS INVESTERS MONEY INVESTED IN SOLG.
Now I wonder what else he would say. mmmmmmmm
I think that you missed the gist of my point.
The point is that Warren would not have invested his investors money in Solg if he did not believe that Cascabel was a valuable asset. Plus, if he felt it was not valuable at a later date, he would have sold out already.
Warren normally visit a site, nose around before investing. That's my point.
Interesting points of view, thank you all. I am holding and suspect I might have to wait until early 2024 to be vindicated. I am also braced to stop loss if any more bad news pops up!
SharketMare - IMHO the fact that SOLG has 'flagged to the market and any potential buyer when we will run out of cash' is a double edged sword. The side that's positive for SOLG is that any potential buyer will know the clock is ticking before a possible fund raise via another RSA. The big boy's won't want to lose more of the asset to Franco Nevada or other smelters. Plus the clock is also ticking on the exploitation agreement. I know there's 25 years and possibly an extension of another 25 years, but Cascabel might be viable for much longer. It's all future profits for the big boys disappearing all the time that the clock is ticking. Remember the big mining companies think in decades.
Putting the issue of Cascabel to one side, I wonder why there hasn't been any progress of any of the other options which were to be examined by the SR?
Everyday that passes is indeed a lost revenue day for ENSA as Ecuador gov signed (as you say) the exploitation agreement. That said, I genuinely think if a super major took Alpala on they would just rip up the SOLG PFS and start again, represent to Ecuador gov, reneg new terms blah blah blah. It helps thus far in so much that it draws a baseline under the asset as current agreement honoured etc.
Someone like Rio or BHP or FMG would want to see double the output that SOLG have factored into the PFS. They have the cash pile to make that happen. SOLG don't. But either way... all interested parties will want a phased approach as that gives them the mileage to manage risk and costs, derisk and supplement any infrastructure spend around the region with other bolt on sites like Tandy and others.
As for raising more funds... unfortunately I believe that suits Maxit and Irwin and others as they will have no shame in issuing those 100m CGP shares to themselves or their buddies at 17p again or lower. But let's face it... 100m shares is small fry anyway based on 3bln in issue and £17m would likely see out another 6 months imho. We'd have posters citing 'placing coming' abut now or over the next few months had we burned through £20m in cash on exploration. Hence the reason for 'parking' exploration until ENSA deal done.
Bit dicey to be putting your faith in Warren Irwin, Eloro.
He gets them wrong just like the next man.
You need to look a bit further. It's widely recognised in junior mining circles that good management can deliver good share price performance on a bad asset and bad management can ruin a good asset.
We are getting closer to the latter group every passing week. Some would argue we're already there and it would be difficult to disagree.
Boxi - IMHO the BoD are playing high stakes poker. However, they know what's in their hand and what it's worth. If I remember rightly, SOLG has around $100bn of metal in the ground. Therefore, a 1 - 5% takeover price (typical of non-producing juniors) would be $1- 5bn. At an exchange rate of $1 = £0.80, that equates to £800k - £4bn.
An offer at the current time of 60p per share (roughly 4x the current price) would equate to roughly £1.8bn, which is near the middle of the valuation. IMHO this would get accepted by shareholders and may not attract counter offers. However, next year if the share price dropped by 50% to around 10p, then a similar offer of four times the share price is 40p, which equates to £1.2bn. While this could be accepted by shareholders, as sentiment would be rock bottom by then, IMHO it would start a bidding war, as the major's would see plenty of value. Hence, IMHO if SOLG is to be bought out at a bargain price, the BoD are expecting a bid sooner rather than later.
Sorry, it should be Bozi.