Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
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DG1 good find and post -
https://www.reuters.com/markets/ecuador-reaches-trade-deal-with-china-aims-increase-exports-lasso-says-2023-01-03/
Posted before but worth reviewing -
https://www.afr.com/companies/mining/how-bhp-newcrest-may-lose-their-copper-prize-to-a-scrappy-crew-of-minnows-20221114-p5bxxy
Ecuador / China signed off on their free trade agreement today
Ecuador reaches trade deal with China, aims to increase exports, Lasso says
It’s a Reuters article - I couldn’t post it here but a quick search on Google and I’m sure you chaps will be able to find it
BPHIL, nice post but if POG and POS go skywards and copper price disappoints then, then we simply become a precious metal play as we have all 3 metals! Come on, somebody put in a bid! LOL!
Hadn’t read that …. Thanks
Apologies if this article has already been posted
https://www.intellinews.com/the-copper-shortage-is-getting-real-265590/
Good posts SM. Even if Solg doesn't follow the Bozi Solution, I guess the point is it could. So if anyone tables a bid that just values Solg based on Cascabel, NM and the rest of the board will say this does not represent the full value for the company because we miss out on all potential future upside from the rest of the portfolio. So if anyone wants to buy Solg outright, it needs to be at a price that adequately compensates current shareholders for selling that potential upside. If it doesn't, then we can look to sell Cascabel itself but we want to keep our exposure to the rest, rinse and repeat.
Quiet day...1.2 million volume but...I could still sell 300k close to the Bid...
SM, in as much as I like the idea of rinse and repeat, I broadly agree with you.
The only thing that seems pretty likely is that one way or another we are not set to own Cascabel. For me, the unwillingness to appoint a permanent CEO and CFO and the disappearance into the long grass of the DFS, are the surest signs we have of the intentions. The former may imply a complete disposal of SOLG whilst the latter may suggest rinse and repeat.
Either way, these two developments tell us what's on the cards. I'm also of the opinion that the new team will not be interested in anything which does not produce some form of cash realization - too many promises have been made, and a jv doesn't do that.
Well thoiught through and argued comments SM
Hi red, happy new year, all fair points.
I was not aware that there are already 15-20 majors established in Ecuador. I guess I would be keen to know to what extent are they 'established' in-country. It is one thing to take a stake in an exploration project that might strike gold, it is quite another to spend several billion on a block cave tier 1 mine that might not come online before the turn of the decade.
Your point on the DGR paragraph I highlighted being a "come on look what we've got" is a fair one, and combined with Mather's historical comments on bids/premiums may well be the right reading of the runes.
My preferred outcome is the one you think will take place - a competitive auction for control of the company. In absence of that, I'm a big advocate of The Bozi Solution™ so we can try and uncover a second Cascabel and continue to witter away to each other on this BB!
Hi Red
Whilst I see Orthern’s “hiving off ” idea as the only alternative outcome I should add I still think it highly unlikely.
A straightforward takeover here feels nailed on to me ….. and there will be no shortage of interested parties
There will be a takeover battle for Solgold...its only a matter of time...
Unless of course one bidder makes a knockout bid...which would have to be well north of £1 in my opinion for the combined SOLG/CGP Board to recommend it...
Ah well, multiple views make a debate. Well done all...
Hi SM
Thank you for your worthy and well reasoned post.
I hope you won't mind my disagreeing.
DGR also said thede:
"There is a risk that this may lead to a creeping takeover rather than a bid by which all shareholders would benefit." (opposition by both BHP Group Limited and Newcrest Mining Limited to several resolutions in the past)
"The deal with Osisko takes financing overhang away and values the Cascabel project at levels well above SolGold’s market capitalisation.”
And at the time of the FNV deal...
"Asked why he preferred the loan to an equity raising, Mr Mather said he wanted to avoid a situation where BHP and Newcrest's financial firepower enabled them to dilute small shareholders and gradually creep towards control of SolGold.
''One of the valuable themes for small shareholders is a takeover premium and if you lose that, then you have not served your shareholders in the best manner,''
So I am in no doubt that Mather is seeking a takeover battle to maximise shareholder value and his comments about the Osisko deal suggest he values the Cascabel alone at up to $8.3 billion or £7 billion.
Next...SOLG and GCP have appointed Maxit, who are M&A specialists. They were appointed by Wyloo just before the 70c bid and until the successful 110c takeover.
Sangha's comments that BHP and Newcrest can go f*** themselves, although utterly unprofessional was clearly designed to wind them up and they sit alongside Twigger's challenge to "put up or shut up" and Mather's message above.
There is absolutely no reason why a comp[any of the scale of Jiangxi would take a piffling $30m stake unless they either expected to launch a takeover bid and/or to profit massively from a takeover battle if they lost.
People keep talking about 'lowball bids' but Noront is a perfectly acceptable example of what can happen, even with just two bidders. Market analysts in North America are already agreed that junior M&A consolidation is underway.
"At a time when major banks are forecasting significant global copper shortfalls from 2030 onwards and current stockpiles represent only weeks of current demand, the SolGold’s resource and exploration inventory presents an enormous
opportunity for the definition of not just one mine but an entire copper province." can be read as "C'mon guys, look at the prospective value we have here..."
"no one has bid for the company..."
Yes but nobody has bid for the vast majority of Junior Miners for the last several years, but with gold and silver now breaking out, the extraordinary predictions for future copper prices and the desperate need for EV critical minerals, it is only a matter of time. I am confident that a raft of majors will have made a preliminary review of Solgold.
Finally:
"the pool of majors with the means...and motivation...to spend billions on a Tier 1 mine in a less-stable jurisdiction"
So why are there already 15/20 majors with an entity established in Ecuador?
I have to say I agree with SharketMare in terms of it being the only viable alternative.
A JV would like see the SP lift but it would be sold so aggressively by PIs and some IIs it would literally be a stampede for the exit, so the company would struggle to trade at a level that it would find more beneficial for raising finance to fund the partnership down the line. It doesn't really work.
So it all depends on Bob and Dan. Deliver a knockout proposal for the lot or start moving cabs off the rank, starting with Cascabel.
HNY all.
That's got a lovely ring Orthern :-D
Ingo did create and register a Swiss investment vehicle if my memory is correct… maybe for that reason?
The Bozi solution.
Sharket
That is the only feasible alternative to a full takeover in my opinion….. JV I think is a non starter …..Nick never wanted one and neither would CGP, it was one of the few things they had in common prior to the merger proposal
Or we hive off the regionals into a new company, and then sell SOLG - which would be Cascabel and nothing more. I think this outcome allows Mather to save face if Cascabel is sold for 30-50p and allows him & other shareholders to benefit from the rest of the portfolio. In absence of an auction scenario and multiple interested parties, I think this is the most logical outcome given the information we have available.
I’m guessing the only other option is a JV of around 90%, with our funding commitments deferred to production and income generation.. that should see a decent, but not spectacular spike… but can’t see CGP wanting a JV..
Happy new year Pinot x
Morning and happy new year to you all.
I'm struggling to see a full sale of SOLG as the most likely outcome here for the below reasons. I think there will be some sort of corporate action that allows us to cash in in the first half of this year, but for my money it won't come in the form of a takeover.
1. The DGR release on the Osisko financing & accompanying comments
In this release on November 11th we gained possibly the greatest level of insight in to what Nick & the interest he controls here wants to see happen at SOLG. Granted he is not the person running the company, but you would imagine, given the % of the business him, DGR and Tenstar own that he would have to be onboard with a full takeover for it to go ahead. The below paragraph from that release strongly implies his preference is for a "rinse & repeat" strategy that many of us have wanted for some time.
"The recent appointments and the agreement with Osisko represent just the first steps in the restoration of value for SolGold shareholders. SolGold’s exploration portfolio, and indeed the upside still evident for additional discovery, will drive the restoration. At a time when major banks are forecasting significant global copper shortfalls from 2030 onwards and current stockpiles represent only weeks of current demand, the SolGold’s resource and exploration inventory presents an enormous
opportunity for the definition of not just one mine but an entire copper province."
https://wcsecure.weblink.com.au/pdf/DGR/02597094.pdf
2. The absence of a buyer willing to pay 'fair value' (in Mather's eyes)
It would be ideal if we ended up in a situation whereby multiple entities were bidding for control of SOLG. This has been the case for some time. Yet no one has bid for the company, and given where the share price is currently languishing, I'm not sure the market expects a bid any time soon. Yes, the oft-cited Noront example is a counter to this point, and I can hear Fortissimo telling us that the market is useless at valuing companies accurately. But we are talking about Ecuador, not Canada and the pool of majors with the means (cash, given high interest rate environment) and motivation (alignment with strategy) to spend billions on a Tier 1 mine in a less-stable jurisdiction is therefore smaller, in my opinion.
It has been suggested that Jiangxi were brought on as a stalking horse, and may well make a lowball bid for the company in order to tease out BHP or whoever into countering. In absence of a counter-offer though, I can't see Nick Mather accepting anything between 30-50p for the entire company given his previous comments and behaviour. Which means we might see the share price spike to whatever the bid was but tumble back down if the offer isn't accepted by shareholders.
It is without doubt that the current BoD and Maxit are intending to monetize Cascabel, I just feel that given the above, they will be looking at options other than a full sale of the company.
Lol... Happy New Year Scrat.... Wouldn't that be nice.
Pinot
:0)
HNY Pinot.
Can we make it “this time next month, Rodney”. I’m starting to feel old !!