Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Your post earlier claiming that a first bid by the Chinese would only be at a 30 to 40% premium on the SP completely forgets that such a bid would leave both BHP and NCM underwater based on the current SP! So unless your likening them to Turkeys voting for Xmas there isn’t a snowball in he££s chance of it being accepted! For this reason any opening bid without at least a 4 in front of it hasn’t got a Scooby and if it’s to get board approval it would need to be much higher!
You're half right FTJNY.
BHP paid 46 pence a share at one point.
The whole point to the diverse book argument is nobody is going to sell their holding for less than market value.
They will probably want a premium.
Even an opening bid of one pound a share doesn't give them that.
So ask yourself how does someone get control and a large portion of the profit from Alpala.
Answer is don't bid, but put up a substantial sum of money and JV with us.
As I have said before, this is now the most likely outcome looking at the evidence.
£1:32 I think the offer will be concluded ,just my opinion though ,I've said it for years so I'll stick with it let's see
Morning Bubble, so it's back to £1.32???
Just before Christmas you were saying that you had revised your price to 50 odd pence.....you're all over the place.....lol. What has made you go back to £1.32? You've also been saying that a sale is imminent for 3 years now, are you still confident about the sale being imminent? Genuine questions.......just wondering why it was £1.32, then 50p and now back to £1.32? Some serious price predictions in a very short period of time buddy!
I am doing this from memory so if I am wrong would be grateful if someone could post correct figures.
The NPV for Alpala alone is 4.3 billion dollars.
At today's conversion rates this equates to 3.5 billion pounds.
That's more than one pound a share just for Alpala.
Copperpot before AGM and after that's first thing ,second spot prices increasing massively,third interest in buying solgold has increased with Asia interest ,so indeed my prediction can be all over the place and vastly different but facts speak for themselves not fiction ,it's always imminent same with many other explorers which such huge resources proven up ,enough?, Please tell me if am wrong ,off walking now lovely up in the lakes today and around the bay ,fish and chips on the prom the order of the day ...and maybe a pint or two lol!!:):(
FTJNY - The fact that BHP and NCM would be underwater on the averages of their own shareholdings is completely and utterly irrelevant. I really don't know why you and others are playing on this, almost using it as a comfort blanket.
After the merger completes, if SolGold issues the shares previously held by CGP to someone that isn't NCM or BHP, both parties drop to under 10%. They lose their influence in shareholder votes.
This is why Mather has, begrudgingly in my view, succumbed to CGP, Maxit and Warren. Because the same was happening to him and he needed allies for the fight ahead.
Now, should an offer come through from someone that isn't BHP or NCM they can both vote against it, but they'll be struggling to muster 20% between them. Add in a few disgruntled PIs who staunchly believe this would be worth more and they're probably closer to 25%. However, they'd be up against Mather and associates, CGP and potentially Jiangxi. They'd be on the wrong side of the fight.
By the way, I'm not necessarily talking about 40% from tomorrow. 40% from 25p takes us to 35p. A fast and smart 100% for Irwin and many PIs would cut and run at that price too given recent performance.
It's about time we started taking notice of the dynamics around us. BHP and NCM coming away from SolGold at a loss is not a factor here. They're multi billion pound companies and they'll make poor investments. It was on them to buy the open market and bring their average down.
Q, may I ask you again, why do you think a jv is such a good idea for us? I'm afraid I don't recall having seen a coherent and compelling argument from anyone with regards to this possible outcome. Nor do I see how it in any way achieves the stated ambition of Sangha &co.
Bozi
“This is why Mather has, begrudgingly in my view, succumbed to CGP, Maxit and Warren. Because the same was happening to him and he needed allies for the fight ahead”
The same was also happening to CGP so I think it was more a meeting of minds and a few egos had to be shelved in order for common sense to prevail.
The clear plan now is to monetise the asset and move on .
Addinct…. There is no benefit & NM has made clear many times over the years that a JV was not an option from his point of view. Bob Sangha and co clearly aren’t here to oversee a JV either …. It’s not “what they do”
If you seriously think that after all these years of effort Nick and his associated companies would approve a buy out at 35p then you must be even more deluded than I thought! Never in a million years would Nicks 19 or so percent support such a bid so as I said before anything not starting with at least a 4 is a complete non starter!
Yep DBW, point taken. However, I'd maybe argue Mather had more to lose by not acting. Both personally and through DGR.
Nothing was stopping CGP seeking an alternative deal with an outside party. Mather could never do that.
FTJNY
Well done for reverting to the insults.
As of 15 December Mather was interested in 11.9% of the stock via his personal holding and DGR. Once the CGP shares are issued that will drop to around 9%.
No one person has control of any matters that go to a vote of all shareholders. That is why we've seen a significant hatchet buried - in the hope that those who took all the early risk can fend off a creeping takeover.
I'm not saying this won't make at least 40p FTJNY. I hope it goes for a lot more. I'm simply trying to make the point that it isn't as straightforward as you and others think.
The first job Bob needs to do is illicit an opening proposal the company wants to put to shareholders. Why? Because failure to do so wl mean the company is continuing development at Cascabel and that will result in a similar share price reaction to the one seen at Landore resources last week.
Addicknt I have answered you many times on this, this is the last time.
It's not necessarily that I think a JV is a good or bad idea.
I look at the evidence and the facts and believe this is the most likely outcome for all the reasons I have given.
Q, that's not an answer to my question; it's merely your opinion based upon some pretty dodgy thinking. Incidentally, I've also suggested that given you've ruled out the production route and you don't like the idea of a sale, you are, de facto, in favour of a jv - there being no alternative.
The question I've repeatedly asked is about the financial implications of a jv and why anyone would think they are beneficial. Until someone provides a cogent argument in favour of a jv i.e how it will benefit shareholders and also why Sangha and Mather would change their minds, I'll continue to be highly sceptical.
Addicknt I think I have worked out why you misrepresent me so often and make out I say things I haven't said.
I could not have been any clearer in my reply.
You are now on about the financing of a JV.
That was not your question, so I suggest you ask the question that you want an answer to.
So let's tackle your second question on financing a JV.
Many ways to finance a JV, so depending on how it's achieved we have different outcomes.
I am on the more positive end and believe this can be done with minimal dilution which is also the company position.
Hence taking this to production in so many ways really doesn't bother me.
If we get a bid then I want as close to a full value offer as possible.
I am happy either way.
But as I have so often stated the chance of a bid looks distant for all the reasons I have stated over the past 7-8 years.
Without a bid, SOLG will just drift for years until there is one.
With a JV, SOLG will just drift for years until there is a bid. ( for peanuts by the JV partner/s)
With a bid and a fair wind we can all log out of this monotonous merry-go-round of a BB in 12 months or so.
Hi Quady. If you think a JV is the most likely outcome, then that has to mean that the financials of a JV result in a more favourable position for current shareholders than selling Cascabel today. Otherwise the current major shareholders who are controlling the company (Nick and connected entities, CGP) would not go for it.
DinnerMoney just provided a reasonable attempt at valuing Cascabel today around 60p. If you assume current management also think a sale for that amount is achievable, what do the financials for a JV look like?
What would the flows be once production was achieved? Considering Solg's share of the returns would likey be much less than 50% and its share of financing would need paying off, what would the return to shareholders ultimately be? A miniscule dividend starting a decade from now?
I just don't see how you can claim a JV is the most likely outcome without providing some estimate of the resulting financials that would justify it. Which I guess is addicknt's point.
Hi rcgl2
I agree with DinnerMoney and have in the past posted estimates at PEA and PFS and we are not too different. But that's for a bid.
PEA= 30% of NPV
PFS=40% of NPV
However the dynamics of a JV are different and depending what form it takes I do believe we get minimal or zero dilution and shortly after we are no longer valued on NPV.
Once we start producing we are valued on NAV and also revenue and as we all know that's a different ballgame and massively to our advantage.
Q, gawd blimey! I wasn't talking about the financing, I was talking about the financial implications of a jv for shareholders. To make ot simple, show me your arithmetic which demonstrates a jv is a good option.
Addicknt how many times have I answered that.
Please read my replies.
It all depends on how the JV is achieved and what format it takes.
I am sorry but I cannot be any clearer.
Quady what j/v?,it's all being sold isn't it?
Bubble where have you read it's being sold apart from on this forum for the last knows ten plus years.
The company has announced a strategic review.
That is what is happening.
The fact is Q, a jv doesn't deliver what Sangha and Mather have said they want and I'd argue this means we won't enter into one. I'll leave it there.
You can't be any clearer Quady because you don't know, none of us do.
Quady you only have to read what NM says when he started this exploration