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* thin air
Guys we've been here before. This is the same playbook as last time around. SOLG approach BHP and NCM and other larger investors and say ... give us $100m for ENSA and $40m for regional exploration at 30p or 32p+ etc. NCM and BHP then come back and say nah.... lets do it at 25p please. SOLG then say, nah... we'll do the $40m at 25p but the $100m we'll do via Franco. Deal done and then BHP and NCM chuck toys out of pram. Remember all that? So what's different this time around? It's clearly the same script. But this time, NCM and BHP 'want' SOLG to go down the royalty route so they can then kick off properly and force huge amounts of change and then eventually seek a low ball offer etc etc. I'm telling you.... this is BHP and NCM leading SOLG into a corner .... either take our low price equity raise offer and live on for 12 months or go the Boliden or Franco route and live on for 3 months and you'll all be jobless.
Personally I can't believe the share price isn't 40p based on recent news and rumours as this looks like it's going one way only and that's a sale or a 'strategic' review. It's what we have all been waiting for. Shame we won't see another 2 or 3 tier 1 projects but hey ho... there are other miners out there to invest in. SOLG has gone as far as it can. PFS is out of date already and not suitable to a super major anyway... might fit with SOLG's self fund abilities but super major will scale it it up faster with greater payback in same amount for time. Rumor was a bid approach in June, so if ball gets rolling in July, then that's pretty accurate by all accounts. Sit tight, SOLG has amazing assets and the super majors want them.
Bozi I agree with your posts. Quady there was an attempted specific fund raise and it did fail. As someone already pointed out, we can infer this by the fact that we are hearing about the attempt and we have not been told that it concluded and new shares issued.
There is no "ongoing discussion" about an equity raise at specific prices with some but not other shareholders. It would be in breach of MAR. The regime around these transactions and market soundings is extremely onerous. There will be general, non-specific discussions going on as to the best methods of funding, as the company has said.
In order to gauge interest about a potential equity issue at a given price range, which is likely to be inside information, the company's advisors have to follow a very strict process to conduct market soundings. Only certain authorised persons can disclose the information and receive it. The advisors disclosing have to keep strict records, have to make calls on recorded lines, and when speaking to potential investors have to read out a fairly lengthy and prescribed script informing the other party that they are about to receive the market sounding, confirming their obligations, and asking them if they consent to receive it. Also some investors will not consent and do not want to be told because once they are wall-crossed, it will prevent them from dealing in the securities until such time as the transaction has closed or been cancelled. Depending on the regulatory regime under which you are supervised, your entire group may then be deemed to be wall-crossed.
The discloser also has an obligation to inform parties to whom it has disclosed information once that information is no longer inside information, for example if the proposed transaction is not going ahead. They must also keep extensive records of who they wall-crossed, consents to receive inside information etc that are available to the FCA.
All of which is to say, you don't just conduct ongoing dialogue about specific transactions that would have a material effect on the market price of the shares. Berry Street say "latest attempt to fundraise" which to me implies a specific attempt to raise funds, it does not just refer to Solgold's ongoing generic discussions with investors about potential solutions. The fact that Berry Street know about it, and various other sources also got wind of it, implies that the company's advisors attempted to conduct a specific equity raise, it was not completed, and the transaction is no longer going ahead.
Also I would add, various of us here are in contact with other posters away from this forum, and some posters have other sources away from this or other Solg specific discussions. It is possible to gather information beyond what has been printed in the RNS and for me at least to have confidence that when certain things are stated by posters here they are indeed likely to be accurate and not just made up out of thin are to support some ramping/derampin
I don't know the circumstances of Ingo and Lisa's departure but I do know they wanted to stay and complete what they came for.
I do know for a fact that there was an attempted and failed equity raise this week.
Hi Bozi
Excellent post, sadly.
IMO it would compound the problem if SOLG did a partial raise now when, reading between the lines of yesterday's RNS they would probably need at least $100m to get to the end of DFS plus any drilling in the meantime to continue ue to prove up a succession of 'cabs off the rank.
What they need to do now is 'kitchen sink' everything; swallow hard and raise enough cash for the wider market, professional and private, to believe this is the last raise before the major funding exercise.
Yes the price achieved would be lower and the dilution could be c15% but...
It could put a floor under the share price such that, general market conditions aside, would lead investors to believe that, at last, the only way is up.
Of course some might say I am talking my position but, yesterday when I sold our shares it was because I did not want to be sat there watching a significant financial deterioration in our portfolio, which would have been £13,000 by last night's close. Also, sadly I think we will see a lower price when there is a cash raise.
I am taking the risk of course that yesterday's shambles may at last stimulate a bid, hence why we've held onto 300k.
Can I restate...I would love everybody's ship to come in after years of waiting, even while our holding is the lowest itys been for a couple of years.
The signals being sent out by the inept RNS, the key people leaving (with more to come, maybe even at Board level), the damaging effect of BSC's letter (whether or not they are well regarded) all start to ask questions about the new CEO.
SOLG is now Brisbane centric and what worries me is that neither of the two top executives have direct practical experience with dealing with London Capital Markets and the failed raise points to that.
Hi BNc I always read your posts.
Can we distinguish between opinion and fact please?
Ingo and Lisa did not want to leave.
Berry Street's letter in October 2021 had an impact and if they are shady, why did the Chairman publicly reply to their letter?
As for the capital raise, no company of any standing would flag up an equity raise before doing it...it makes you a hostage to fortune. Note the 9% fall in Solgold's SP yesterday on a day when copper and gold recovered well...BHP up 2%; ANTO up 4%
There was a failed capital raise attempt. Fact.
Yesterday's RNS implied as much:
"In addition to the cash position of approximately US$26m as at 30 June 2022, SolGold continues to consider, and has had discussions with its major shareholders regarding possible financing structures and options to obtain funding to further progress the Cascabel development, including a potential equity raise. "
I respect your opinions but these are the facts.
LM, if BHP do end up owning the company, they will repay the monies immediately - as will virtually any other buyer. But I take you point.
Bozi 09.33am - spot on as always.
Also, only been with the co for 1yr so hardly a key player peeps
You could read it that way Quady but when you consider they are also considering alternatives with strategic investors, that tells me that whatever their funding plan A was, they haven't been able to execute it.
On regional JVs, whilst we'd expect them to be in discussions, how long should this realistically take? SolGold first mentioned speaking to potential partners over 12 months ago now and let's be honest, one prospecting licence is contiguous with another major (and growing) discovery in the country. How hard should it be to do a deal with Solaris and why have we not prioritised getting permits for this licence so that we can demonstrate mineralisation in our ground, should that be a pre-requisite to any agreement?
Not to mention Porvenir - we're surely looking at a 3mt copper and 3m ounce gold project here from surface. How are we struggling to get a partner?
Something doesn't smell right here now I'm afraid.
Lunch, I'm probably guilty of overegging the pudding here, but someone who was Metallurgy Manager for the PFS leaving (not by choice it seems) before the addendum was released does not sit right with me. Key player is a stretch admittedly.
Thank you for your reply Bozi.
On point two, I take it to mean that discussions are ongoing.
I just think that they are concentrating on Cascabel and looking for partners for our other concessions, that's why we have not been in a rush to fund raise ( just my musings ).
Quady - my own opinion is that SolGold are working with the interests of BHP at heart.
Someone on here suggested yesterday that Mather was still exerting influence but I don't believe BSC are referring to him for the simple reason that Nick's interests are more closely aligned to other shareholders (in that he wants full value or as close to as possible) . Moreso than BHPs are anyway.
We need to ask ourselves why SolGold didn't do a raise for further studies and regional exploration upon release of the Alpala PFS? That would have made much more sense than raising into weak summer markets and it didn't require hindsight. Those who weren't transfixed by TMJs "June bid" story asked the question publicly and the market even voted with it's feet in the days after the PFS.
To attempt to answer your point about the attempted fundraise, and please consider the following selection of quotes from yesterday's RNS:
"SolGold is investigating a number of strategic initiatives to provide the Company with funding options for the development of Cascabel and progression of regional projects."
"... SolGold continues to consider, and has had discussions with its major shareholders regarding possible financing structures and options to obtain funding to further progress the Cascabel development, including a potential equity raise."
" SolGold also continues to assess potential alternative funding structures which may involve strategic investors."
Quote two basically confirms that an equity raise has been attempted and the use of the word 'alternative' suggests that other options are being explored.
It's just a question of joining the dots.
Bozi please by all means have a guess.
I still see no evidence we have failed on any fund raise, so on this occasion we will agree to disagree.
I dare say this will all be cleared up by Solgold in the near future.
All the best.
Quady - You have made the assertion that BSC are angered at not being offered a fundraise.
I am saying here and now that is completely incorrect.
There are separate paragraphs in the Berry Street letter of yesterday. One paragraph (the 2nd) says they are disappointed with the attempted raise and management's lack of understanding of capital markets. The next paragraph (the 3rd) says that they are disappointed with how SolGold are only representing a small group of shareholders.
You need to explain your assertion. You appear to have amalgamated their separate points and twisted it into a fairly trivial matter.
My own interpretation is that SolGold have unsuccessfully attempted to raise and that BSC, separately, remain unhappy with the motives of SolGold management. It's unclear in my view who they are referring to. I'd be willing to have a guess but many won't like the answer.
Q, and this from a man who described the outcome of the 2020 (or was it 2019?) AGM, as a "triumph" for Mr Mather, who, if you've forgotten, was forced to resign shortly thereafter.
I'm sure you have many strengths - you keep telling us, so it must be true, but I'm afraid understanding corporate life and capital markets is most certainly not amongst them.
Great post Bozi, spot on I reckon.
Bozi as you know I respect and read your posts with interest.
Berry states they are unhappy about only a few shareholders have been approached.
This is the raise, nothing has failed.
I have printed the letter so addicknt can read it.
There are so many ways to raise funds for the DFS for Cascabel.
Nothing as far as I can see has failed.
If you have further evidence, please post and I will read and possibly reconsider my statement.
Excellent post, Bozi.
I agree, it looks as if we attempted to by-pass existing shareholders which, given the board's previous statements that it would consult with them, looks pretty damn weird and totally misguided. Yesterday's statement suggests we've had to go back with our tails between our legs. As BSC said, our lads appear to have a very limited understanding of capital markets.
On that topic, at the time of the Franco deal I pointed out the cost to the company and I have subsequently mentioned the impact of the accrued interest. It now seems the costs was even higher than we thought . It's no wonder BHP/NCM were up in arms.
The last time BSC put out a public lashing of our board, it was quickly followed by Twiggers remarks pointed at BHP along the lines of put up or shut up…. I am no fan of twigger, and would have had him out at the the last AGM, but I’m very interested to see any public response that may come this time..
The board must surely know they are done for in December
Blimey Bozi ….. now I’m depressed lol
And I agree broadly
On the other hand a third party interest would change everything ….. I’m fairly sure that certain people have been working on it for a while now
OK let's stop addicknt rewriting history, and let's nail DBW's statement to the post.
Both have stated that a fund raising attempt has failed.
Let's remind them of their ridiculous statements in the future, not only through lack of evidence, but also because the RNS states we are raising money for the DFS for Cascabal And Berry's letter states they are unhappy about the current fund raising.
At no point does either document say anything has failed.
Quady - I'm sorry but it's time to read between the lines rather than treating a cobbled together SOLG RNS and the subsequent BSC response as absolute fact.
At the end of the day, you can't solve the problem of you're incapable of working out what it is.
SolGold are running out of cash. We have, at a guess, 3-5 months runway at current burn rates which is based on little more than a care and maintenance schedule.
It is one of the worst kept secrets in the City that a fundraise was attempted.
SolGold confirming that it is now consulting with major shareholders suggests that it is seeking alternative options and that a capital raise has, as is rumoured, failed.
My reading is that we're in fairly major strife here. The ATM is empty and we're unable to just print new shares unless someone else is capable of carrying out a raise on our behalf. That means we're going to have to look at selling off an asset or interest in an asset but our position means any potential buyer has a stronger hand at the negotiating table.
BHP don't need to strike yet. We're about 6 weeks from the real sweet spot and I suspect they know it.
I take no pleasure from this as a shareholder but the coming weeks are likely to be quite perilous. I signposted us a few weeks ago towards the worsening market conditions we're seeing albeit in respect to the financing of Alpala construction but the same absolutely applies to fundraisers for working capital and exploration. You can take the view from BSC that the market has had enough with the treatment of some shareholders over others.
So where do we go from here? I suspect we'll either see a smaller raise on disappointing terms, an asset sale on poor terms or a recommended offer for the company, again on poor terms.
The company's management hasn't shown that it can deliver value for a good couple of years now (since the Porvenir discovery). Hard to see that changing now. We're approaching Hail Mary territory.
Quady …. Basic physics…. You can’t condescend up
DBW you would make a terrible technical analyst.
You cannot read a basic statement.
They don't like the way the fund raise is going about.
Nothing has failed.
They don't like the fact that they are not part of the fund raise.
You have truncated the statements in the letter to try to change the meaning.
However you have failed .
Now try to redeem yourself a little and read the letter.