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Morning Scrat you are quite right NPV's are used for measuring projects and NAV's for measuring companies.
However Alpala is a project and I think we forget how big a project.
We also have the build cost which i believe on the reduced mine size on the last PFS of 2.9 billion dollars with a payback of 3.8 years.
Again figures from memory, please correct me if I am wrong.
So to value Alpala in this way I believe is fully justified.
The infrastructure alone (water/electricity/paved roads/deep ports/altitude etc etc) must be worth (potentially) around 3-4 billion.
Taking into consideration all the above.....the majors will be salivating on the thought of J/V'ing with Solgold!
See you all next week.
Having not read these various business cases, I find myself wondering about the NPVs of a project in the context of long term risk. I’m sure they do some sensitivity analysis around the assumptions so there isn’t logically one NPV so much as an envelope of possibilities. And if you wanted to sell a proven up ore body and had a good grip on the life cycle costs, and the revenue earning potential, then you can estimate an NPV for the project. But I wouldn’t pay all that up front to buy it because of all the risks over decades. And I’d want to keep the profit too else why am I bothering. So whilst the project has an NPV which informs what it’s worth in many respects, I’m not sure you can just divide it by the number of Solgold shares in issue and go order your yacht / Tesla. Would it were so. Anyone know more about these things?
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.
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!
£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
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.
Pad , morning the assets the Chinese will be after far outweigh the price they might offer a bargain to them imho
Evening all. Just flicked through this weeks posts. Best one, sorry cant remember posters name, was about going to local supermarket and seeing bottle of booze called Cazcabal. Was it on special offer at ridiculously low price?? rather like our SP at the moment!
GLA
DK
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!
Hey Bozi, thanks for reading my post, replying a bit late after watching United fianlly goe toe to toe with City and come out on top. Great day.
Whilst I take your point on the opening price of any bid and its potential to be 2.5 x the current sp, 44p would still leave most on here unimpressed. What does however remain true for all of us I'm sure, is our collective opinion that 17.68p drastically undervalues our asset and the true value is multiples of the current sp. I respect your viewpoint, but given everything I have researched and been briefed on solg over the last few years, like Rk, I'd rather have a fully committed position right now. Time will tell, however I'm happy with my current risk profile.
Now, time to watch the game all again on MOTD, best pour the wife another glass of wine!
Enjoy.
Interesting article on Chinese on the mining acquisitions trail including South America.
https://www.reuters.com/article/mining-gold-china-ma-idUSL5N2L02O1
I particularly like this quote:
“Chinese companies move quickly and have easier access to cash.
“It’s like being in an auction with someone who doesn’t really care if they pay double what it’s worth – they keep bidding,” the executive said”
And:
“State financing is one of China’s advantages in carrying out overseas acquisitions, Chifeng Gold said, adding that it believes the Bibiani mine was bought at a “fully competitive price”.
‘THEY KEEP BIDDING’”
Quady ,might get some news on Tandy soon then ,before end of month
Correct bubble the quote is too get another before Alpala.
My bet is Tandy as it's part of Cascabel and we have 50 million earmarked for Cascabel.
However the Banking feasibility study is for Alpala.
Not cascabel ,quote one other the other ..
Hi Bozi
You always ask reasonable questions in a reasonable way. The answer is that I don’t honestly know. No one does but I just don’t believe they’re along for the ride…. We have a huge asset that we are clearly incapable of taking to its maximum potential.
Someone will and we’ll all do ok .
We don’t agree on everything but you’ve always remained civil and hopefully the end game will benefit us all.
Evening Bozi according to SP Angel we have gone straight to the BFS study. Link below.
https://www.proactiveinvestors.com/companies/news/1002961/today-s-market-view-azure-minerals-blencowe-resources-cornish-metals-and-more-1002961.html
So when should we expect Jiangxi's opening proposal then DBW?
How does end of February sound?
I think we have to consider the potential that Jiangxi and BHP will be happy with their strategic stakes. Let's not forget that we've got a fairly unsophisticated PFS on Alpala that has some potential for adjustment and optimisation, but we've postponed the work.
What sort of message does that send?
Why aren't we completing a PFS that paints our flagship project in an even better light whilst we have a strategic review ongoing?
These are the questions that need answering.
It is ramping Redknight.
There's nothing to say a ramp can't play out. But calling an event that hasn't happened yet and mixing it with subtle encouragements to buy stock is ramping.
That's how it is. May as well embrace it.
Hyfligman - your 23:05 post last night exhibits all the warning signs I'm talking about on this bulletin board.
I'm very sorry to dampen the mood of you and the 13 others that recommended your post but there's no way on God's green earth that the Chinese are going to offer us a 250% premium.
It just isn't a possibility.
If they are interested in the company then the most we can expect is 30-40% on the last closing price the day before. It will then be on other parties to have their say.
We'll therefore need at least two interested bidders and they'll both/all need to make multiple bids. It's a lot to expect.
Please don't burn yourselves with unrealistic expectations.
.. inviting the Chinese in is no different (at one level) to inviting Newcrest in. Diverse book and all that. And remember BHP only got in by buying the shares certain characters held who had switched to Cornerstone. However, I really don’t see the JV narrative favoured over the full on takeover takeover battle I sense brewing with these deep pocketed characters. And when it comes to a gamble, that final bid before the hammer comes down, then the Chinese likely have more room for bidding on Solgold speculatively with its pipeline of unfulfilled, indeterminate potential than BHP ever have. Bring it on I say. Until then, I’m adding as I can.
Oh dear Redknight they own 6% because Solgold invited them in.
I believe this has to do with the Strategic review.
A JV making more sense every day to bring Alpala to production.
Agreed Smickster.
Morning Red
Exactly right ….. the beauty is there’s no way Jiangxi will settle for 6% and there’s no way BHP will stand by and let them take it from under their noses. Would love to see a 3rd serious player enter the fray but maybe I’m being greedy.
We need to get this merger settled but that’s not far away ….. just a waiting game my friend
Let's hope so Quady, ridiculous loss of innocent lives on both sides.