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"In order to fund the exploration and drilling activities of the Group thereafter (no mention of mine development), the Company is undertaking a strategic review to evaluate a wide range of financing and strategic options to secure funding, including, but not limited to, selling a direct or indirect stake in the Cascabel project, selling other assets of the Company, or any other transaction, which may, or may not, dilute existing shareholders.
The Board expects to recommend its future funding strategy in H1 2023 in connection with the Company's ongoing strategic review'.
Unfortunately we have all come to expect Solgold deadlines to slip
Interpretation:
1. funding to be used to recommence our regional exploration programme. (our existing funds are to cover existing overheads only)
2. A funding package for the development of Cascabel appears not be under consideration. This contradicts the next point.
3. We will sell a stake in either the plc or ENSA. This must be for Cascabel development. Confusing, ain't it?
4. Point 3 means there will be significant dilution.
5. Given our other assets are pretty worthless at this stage, is the reference to 'other assets' Porv?
Good morning addicknt.
It's not contradictory at all.
No more fund raising through dilution to advance Cascabel.
So maybe an offtake or share of ENSA to start construction.
This means no DFS required at this stage.
I should have added that when they refer to 'any other options' they clearly mean the complete sale of the group or Cascabel alone.
If avoiding dilution is a priority to the company, this is the only way forward that works for us small shareholders.
Q, as I've just pointed out, selling a stake in ENSA necessarily implies dilution of our shareholding.
Q, one other thing: An off-take deal would not provide the up-front capital required for the mine development. At this stage it would merely be a letter of intent to purchase the ore once the mine is producing. I think you're referring to a royalty deal, which is hugely expensive and from memory, has already been ruled out.
Your preferred route of a jv would dilute us to a considerable degree and, to my mind, must be avoided.
Does a JV dilute us by increasing the number of shares, add, or are you referring to the fact we'll be in line for less income from mining cascabel? Because 20% of billions is worth more than 100% of FA, last time I checked...
I m struggling to see how it wouldn't dilute us
We ether issue mor shares or we all donate a percentage of what we have ?
Is there another option ?
Sell the shares we got from cornerstone
Ship, I get the feeling they're looking to raise a fairly significant amount - the CGP shares wouldn't raise enough.
E.T you're right, it would dilute us.
Alternatives?
A bond issue. Effectively it would be junk status and hugely expensive - 12/13%? Or perhaps even more.
In the good ol' days we could issue non-voting pref shares, either redeemable, non-redeemable or convertible. But these don't really exist anymore.
Straightforward debt? No chance.
Another royalty deal? That's been ruled out, although I wouldn't be that surprised to see us change our minds.
And then there's the equity market. Just think, we raise 100m and give away over 20% of the business.
None of the above are appealing. We need to sell the bloody thing!
You may be interested to know. I also hold ipx. held for 5 months. went up 70% today. unlike the mr man, not enough to retire. but I just thought I would share my excellent news with rk and fort.only made the discovery a few months
ago. good management, good strategy, good decisions. = massive, massive profit. have fun waiting for solg to emulate it. toodle pip
Why on earth does anyone think SOLG needs to raise more money...
They aint going to build Alpala and the DFS is on indefinite hold...
They've been agressively cutting costs and...
SOLG is up for sale, hence "several parties with access to the data room..."
From15 May RNS:
"The Company ended the quarter with strong liquidity, a cash balance of $48.1M, plus $25.4M shares held, which can be sold at the election of a wholly owned subsidiary...."
and:
"With the ongoing restructuring efforts described below, management expects current cash balances to last beyond June 2024. "
So much hot air wasted on here in idle speculation that might damage the SP...
RK, read my first post in this thread - it contains the answer to your question.
Two things, Red
1) chatter on a tiny message board doesn't change the SP. Bad management does.
2) you are quoting DG1 about the data room parties. Not confirmed by the company, so I'd use some seasoning here.
Once again, I know you are desperate for a sale, but it is more likely a major would partner with us than buy us. Offer to put up most of the cash for building the mine in exchange for most of the minerals extracted. Then cost solg out of the equation over next few years with increased spending demands we can't meet, so they get a cheap route to 100% of the concession.
Not what anyone here wants, but more likely than a cashed up buyer offering £1.5+bn for the lot out of the goodness of their hearts, which is what some seem to believe might happen (lol).
My two cents:
- Parties in the data room like what they see - who wouldn't. It's a massive deposit with a great mix of metals
- However, the current plan requires a not inconsiderable outlay upfront
- On top of this, the political situation in Ecuador is shaky
- And SOLG is renegotiating the IPA with the current gov't which will include a write down on the exploration capital to be spent at Cascabel before end '23 (there is no way we are going to hit the agreed figure, when I last tried to calculate the outstanding amount was approx. USD$145m)
- SOLG is also negotiating the exploitation agreement so that construction can start
- SOLG needs to find a site for tailings (thank you for this insight Shippy)
I imagine that the feedback from the interested parties was something along these lines (some of which has been all but confirmed by Shippy and DG1's conversations with Scott):
1) produce a plan that reduces the upfront capital before payback
2) find a site for the tailings
3) get the two agreements with the Ecuadorian gov't over the line
At which point - political situation permitting - SOLG becomes very, very buyable. The above will take a few more months.
OR Scott is attempting to do what his predecessors Mather and Cazzubbo failed to and flush out a bid from one of the majors able to take this on as-is. galapagos' post yesterday mentioned that producing a plan with lower capex and earlier payback opens up Alpala to smaller players - is that something that majors are willing to risk?
"producing a plan with lower capex and earlier payback opens up Alpala to smaller players"
I thought thats what Darryl did...
Why do SOLG have to do anything to get a bid...?
The ultimate buyer won't be put off by having to dot i's and cross t's...
https://www.kitco.com/news/2023-06-13/Copper-demand-will-outpace-supply-from-2026-due-to-global-energy-transition-report.html
Its only a matter of time...tick tock...
"Jiangxi Copper Co Ltd , Zijin Mining , Tongling Nonferrous Metals Group Co Ltd (000630.SZ) and others urged relevant authorities in a meeting on Tuesday to launch a new round of ore prospecting as soon as possible..."
https://www.reuters.com/markets/commodities/chinese-copper-companies-say-more-mining-is-needed-boost-supply-2022-11-09/
https://www.spglobal.com/marketintelligence/en/news-insights/research/china-mining-by-the-numbers-2022
"further out Ecuador and Argentina could become the next copper frontiers, according to Pickens...."
https://www.mining.com/charts-chinese-investment-in-overseas-copper-projects-just-beginning/
https://www.reuters.com/markets/commodities/while-dr-copper-waits-china-china-buys-more-copper-2023-01-27/
Funny how it's always a few months away, isn't it. Remember when the TO was going to happen as soon as the stand still ended?
Don't worry about seeming daft though: just wait a few months and claim the TO is only a few months and a couple of hurdles away
Meanwhile, in the real world...!
But that predates the 15 May RNS addickt...
Has red bought his 30m shares back, or why has he suddenly started ramping so hard this morning? We've had a nice break from all the forced inuendo and 'dot dot dot'.
Clown will now claim someone else's trades as his own (or his wife's), will pepper this board with nonsense he claims means a sale is inevitable (same guy who has been doing this for several years) and then, when someone points out he's a clueless ramper, he will try and invoke sympathy by making up a new disease to suffer from.
Tale as old as time.
RK, the Prospectus is a more important document.
Anyway, as you know, I too want to see this sold, but it's important to think about what has been said by the company, no matter even if you think it's baloney.
RK the initial main plan was 50 years mine plan or so. The current one is 25. Imagine you do a 15 year mine plan now that requires less capex and the cash flow allows you to build the mine out with cash flow generated internally. Sharket your point on why nobody is bidding yet although they are in the DR is a good one but for how many weeks have they been in their is the question. Also even though you might be in the DR you might need to do your own analysis still, no. Maybe you have to or will do a twin hole etc. The political dynamics in the country obviously matter short term and a buyer might look to get assurances.
Just keep it simple and focus on the guys that have taken over SOLG.
Maxit, Irwin et al have no interest in adding value to the share price which lines the pockets of traders or flaky pi's. The only interest they have is their own interests. And when you effectively own 30%+ of the company (CGP guys/Maxit/Irwin etc etc) you have on way to sell that amount into the market without a corporate event. For instance, when the sp was 40p last year, Maxit couldn't sell into that. There simply wasn't the demand for 400m shares in a block sale. Add to this there is some doubt over what Newmont will do with their 300m shares gained from Newcrest. Will they flog them to BHP (if interested) or will they retain them? The investment / trading world is a very different one to pi's if you are a very large holder. Boosting the sp does the big holders no real favours. Creating a monetisation event which sees assets sold or the entire business is the only way for Maxit et al to exit and capitalise. They don't want to have their money in SOLG for any longer than necessary and certainly won't be tucking it away into a 25 year mine plan lol! These guys want OUT. End of.
I have two concerns as a pi with Maxit involved. First is the CGP shares circa 100m. What's to stop Maxit issuing those shares to their buddies (tut tut) at 17p or lower (heaven forbid) just a month or so ahead of a known bid outcome? Yes it is insider trading but there are rules that can be skirted. My point is, Maxit can make a 34p offer worth while to the likes of themselves and other insiders if they gain 100m stock at 17p. I guess I'm saying... insiders have 100m shares to line their pockets with when they are confident an offer is being tabled. That incentivises them to keep share price low until all are ready.
Second concern is that Maxit et all orchestrate a JV deal which sees SOLG partnered with someone like Mitsui or Chinese and JV partner commits to capital injections in exchange for ENSA interest but also we see Maxit exit stage left selling their 300m shares+ for 30p or something like that. In other words... the CGP boys still get their exit event but rest of shareholders do not, although I think the sp would be around 30p then anyway so open to trading pi's etc.
All in all, the insiders have the upper hand and we know they like lining their pockets. So that's my 2 concerns where maxis et al are concerned. There is absolutely no way on this planet that they are going to dilute themselves any further. Not going to happen. That goes against their complete end game. There will not be any equity issues unless part of an exploration company spin out etc. That's plausible as would fund it and lets face it market doesn't care a jot about exploration right now.
Do I trust Maxit et al? No! Absolutely not. Do I think they are aligned to shareholders interests... YES but they also have 100m shares (CGP) to help them with any low balls...mmm! Remember, Maxit took a wedge at 16.5p in last
I should add, let's not forget that BHP may well have desires on Alpala and cannot be dismissed. Maxit will know that any plan or offer deal that they put forward will either see BHP counter offer or take back seat and await other offers from players like Anglo or Rio if these firms are indeed intent on bolstering their Ecuador presence.
The starter gun is fired once Maxit reveal the tabled offer or deal. Then all interested parties (in the shadows) can come out and counter offer. So the first Maxit deal tabled doesn't have to be that great. In fact, my guess is that it will be Luke warm and in the 30's or early 40's. With subsequent bids potentially taking it into the high 50's and 60's if the bidders are really keen.
Maxit just need to get a deal tabled. It should rock and roll thereafter.
In the meantime we keep moving up. Is someone nibbling away?