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They also have a portfolio of other assets e.g. Scalliwag, Black Hills.
Also, NCM earn in is only at 40% so far.
Colonel, GGP will have 30%, or 25% if NC take up their option to buy 5% at fair market price. Not sure where or how you get 15%?
Glencore won’t be making any acquisitions until it’s settled it’s outstanding bribery and corruption issues. The fines could still be very damaging.
Glencore don't like greenfield sites and building big mines.
Prefer to buy ready producing mines or even better trade by off take agreements.I would rule out Glencore here.
A name not often mentioned in our context; Glencore. Does anyone see them as being interested? They certainly have a healthy risk appetite.
copper, I wasn't arguing and, as it happens I share your sentiments about the personal attacks which infest this board from time to time.
I also believe a jv is a distinct possibility, although I'm not at all convinced that would be in our best interests. In fact, I'd be very disappointed if we went down that route. NM appears to share this view.
My point was some people only see this share through the prism of our our perspective and this is a fundamental mistake.
Yes but sadly the unfortunate CGP holders who tendered their shares would have to contemplate selling at 30% below the best recent equivalent terms...
They could of course use the proceeds to buy SOLG shares ...
Copperpot, ref CGP shareholders getting hung out to dry...they have been are continue to be free to sell on the open market any time it's open! The only people that will get hung out to dry, if it comes to that, will be those that deserve to (the big holders who can't sell into the market without tanking the price).
Addicknt, I have spent many years meeting with the various boards of mining majors as part of my former role in the city and I totally agree that BHP are a very likely acquirer, and not just because it’s a stakeholder. Rio & AAL have far better copper assets to satisfy future demand. All mining majors are macro focused and follow the same trends as each other. At every possible opportunity BHP speaks of its desire to be positioned for the energy transition and yet it remains exposed to carbon businesses (oil& gas/ coal) and does not have a copper project at the same size and scale as Oyu Tolgoi (RIO) or Quellaveco (AAL). The recent announcement that the planned Olympic Dam expansion has been shelved is perhaps the key to its intentions. All mining majors remain focused on capex discipline and are unwilling to sacrifice efficiencies and margins by moving further along the cost curve. Asides the grade quality & cost curve issues at Olympic Dam, BHP has been beset by labour issues, declining grades and water supply problems at its Chilean Escondida (57.5% owned) and costs are likely to rise towards US$1.25 per lb. BHP greener future is not secured with copper only representing 19% of 2020 FY EBITA and the company still reliant on Iron Ore (64% EBITA) Last year it spent US $394m on Oil exploration and only US$54m on copper exploration. So with Mike Henry only 10 months into his tenure and a burning ambition to position BHP correctly for the energy transition it appears that Solgold is perhaps the solution to the challenge. Rather than waiting for Carbon business disposal proceeds it would appear that the capex decision at Olympic Dam may provide sufficient balance sheet relief to preserve the capital discipline and permit the expansion of their copper business. Interesting times with plenty of potential outcomes to consider.
If Newcrest are wanting to be up with the big guns(bhp,rio) this is their opportunity, fortune favours the brave.
My tuppence worth on a Sunday morning.
I dont think that NC are that interested in Solgold long term anymore. They pulled their director, increased their involvement in FdN and have their hands full with many other developments in the assets that they own or are seen as a welcome partner. They do however realise that they have a valuable stake in a company where some corporate activity is likely. So they will hold until there is/are bids and sell out to the highest bidder, or they could become the king maker. So I see them as the least likely buyer of CGP or doing anything that will increase their involvement in Cascabel or Solgolds business. Which leaves the ground clear for BHP. Would NC sell out to BHP? Probably but equally probably not at these prices given what the drill bit is turning up. I think they are more like an investor than a miner and potential owner.
At a price its for sale.
v true DBW
Hi DBW, I agree mate, it's not nice to see any company letf to rot/hung out to dry, especially the CGP shareholders that tried to tender their shares. NCM probably would like a bigger slice of the pie, it's what they are prepared to pay. Theyre not too happy with NM and Solgold as it stands! Would they want to get involved in a bidding war for something they're not happy in? NCM like to bully, they can't do that here!!
Yep all good thanks
Much as I’d like to see them left to rot , I just can’t see someone like NCM turning down the chance of a bigger slice of the action knowing it’ll be worth multiples down the line , this’ll more than likely be their only chance of an increased stake
Hi DBW, that's a very good question mate. I think the same scenario applies there too. Whoever opens the bid for CGP starts a bidding war of which they may lose. Crikey it's complicated high stakes chess. My personal thoughts are......CGP will be left to rot with no bids. How much would somebody bid? Would that money be best kept in the war chest for further down the line? Once (if indeed it does happen) a move for CGP occurs, Pandora's box opens and God knows what will happen from there. I think NM is talking to BHP behind closed doors to sort out the way forward for both companies. NM has bandied the name BHP, BHP too many times of late for there not to be something in it. Just my thoughts DBW.
Hope your good mate.
Copperpot
If, as is likely , there is a JV with BHP , do you agree that NCM’s best move is to grab CGP and gain as big a stake as possible?
Good morning addicknt, I think most on here are sick to death with the arguments mate....period. I and others (that have been here for 9 years plus) have been accused of being a gang of bullies, in a cabal...the list goes on. I think Quady posts a bit too much myself, but hey that's his business! He has been hounded by a certain poster (from this planet) and a few others to distraction. They bully and goad, but Quady is more than capable of handling them. There's only one person that started all this trash talk of gangs etc. He's one very insecure person, if two or three people disagree with him your accused of being in a gang! There is no gang, or if there is I don't want any part of it! If everybody on this board apart from myself said that Solgold would not be involved in any way of taking this to production, I wouldn't accuse them of being in a gang! That's their opinion and I appreciate it. Quady will always give very polite answers and reasoning to his opinions when asked to do so......but still he gets hounded by a certain poster. That fella is the bully and no one else! He started all the unrest and no one else. He needs to take a hard look at himself before hounding and ridiculing other posters. He's the one trying to divide the good people on this board.
Anyhow addicknt, my personal view on Alpala is this.....there will be a J/V with BHP. Solg and BHP will collectively design and build the mine. BHP will operate the mine. Solgold will continue to do all the exploration work going forward. I do believe NM when he says he wants to go to production.
I've said many times, even the folk that want a nice large early sale should also say "this will go to production" In my mind this will always demand a better take out price! Every right minded major are frothing at the mouth at what we have. Let them do the fighting and not us here! I don't agree with your views at times and vice versa, but we we respect each other's views for what they are.
Have a nice Sunday addicknt, no doubt we'll all be back here tomorrow.
GLA.
It seems to me that when arguing for the independent route to production, some people are failing to ask themselves the most fundamental question, which is ; why on earth would BHP (or NCM for that matter) allow the most important discovery (i.e Equador, not just Alpala) in recent history slip from their grasp?
Of course, the answer is they won't.
Although I happen to believe there will be a takeover of the whole shooting match, I fully understand there are many other possibilities, all with varying degrees of likelihood.
What we have unearthed is quite simply far too important to be ignored by any of the majors, and they will not do so. Unless NM breaks his pledge of no jvs and no partial sales, there is zero chance of us progressing as an independent entity.
Sit back and think of conversations around the boardroom table at BHP. Does anyone seriously believe they will be sitting there saying 'we've got 13% of this astonishing giant and we should be happy with that'. Not a cat in hells chance.
What I am saying about the purchase of CGP would be letting them sell before they are due to pay towards capex, if you are a company with extremely poor finances you would consider this saving very carefully.
Agree all has to be funded but all would be already calculated in.
Still of a very strong belief in a BHP JV with Solgold myself, Nicks not going without a fight, we shall see
.
Sorry: I should have said that it takes either BHP or Newcrest over 20% (and if they are acting together, a lot closer to the magic 50% control).
Whilst, of course, strictly speaking directors do have control of the company assets, if "someone else" was to look at Alpala, NM would be obliged to go through a formal sales process to find the highest bid and Newcrest and BHP would have to be given their chance against "someone else". If Alpala was to be sold (despite the tax consequences) then NM would also want the highest SP to fund ongoing exploration for the replacement.
That's a v interesting a plausible view juxta'
Makes a lot of sense.....
Rs
BN c
But anyone wanting 100% of Alpala will have to carry the future funding (even if CGP dwindle to nothing by whatever means).
The cost is the amount paid (in your calcs. 250m) and that takes any purchaser over the key 20% on TSX rules.
It would be the next step in a hostile takeover: it is a solid move towards the required 50% control and that is what we are likely to see, a battle for control rather than outright purchase. What the big boys want is to dictate funding and development options to their own best interests.
As you say, the CGP rise could just have been on rumor, but I am still struggling to see why either BHP or Newcrest (or jointly) do not go for control (in essence, the CGP EGM strategy, which rather let the cat out of the bag).
That’s true, but as an investor you like to do some forward thinking about your investments, long term held shares and are they worth it, possible outcomes.
Speculation on what evidence you have complimented by your own understanding of how things may pan out is all part of it, anyway as you say let the board have their say if they feel so inclined
Atb
Because there is no guarantee they will end up owning the mine. Southern copper could come along and do a a deal with solg for alpala, for example.
You are entitled to your opinion of course and I will stop posting to allow others their view, but it's not much of an argument that something might be happening because we don't know it isnt. As an investor we normally need a bit more to go on than that.
I hear what you say but, you keep referring to no one has made an offer or in talks with CGP, this is your opinion which your entitled too, but it doesn’t make it right.
BHP will know all what you have put and much more, why do you mention future debts of CGP if they are bought out by BHP if they end up owning the mine?