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"But the market needs to know how it can be funded?"
NO.
Only if 'the market' thinks there will not be a takeover bid, but...
In October 2020 SOLG was 'the hottest takeover story in town' and...
Several publications have now talked about a bid in May or June...
Do you think CGP, DGR, Newcrest or Blackrock are holding on for production...?
Lunch...mate...
"it is the financing that is key..."
Only Quady thinks this is going to production...
The financing is irrelevant...the only things that are relevant are:
have you got enough shares and...
Can you hold on until the bidding war starts...
You don't even need to hold on to be paid out by a successful bidder...just sell in the market for cash and buy yourself the car/house/boat/luxury holidays...etc. that you've always wanted...
And for the nervous among you, this is not another Sirius Mineral.
The only thing you should worry about is a 'Black Swan' event that affects all share prices.
In which case only invest what you can afford.
Anything different makes you a trader or, worse still, a gambler...
GLA
THE MARKET DOESN'T NEED TO KNOW HOW ITS FUNDED...
THE MAJORS JUST NEED TO SHELL OUT PETTY CASH TO BUY US...
Even at £1 a share its only $2.8 billion...
Thats less than 20% of BHP's cash in the bank...
Let m repeat...5 years ago...well before production...ATYM 80p...now 386p and yielding over 7% from ONE TINY MINE producing one tenth of what Alpala will be producing...
ATYM MCap £528 million...
Its not rocket science...
And on those numbers I confidently predict at least one bid before the end of May...
Lunch...
Why di you have to put on a negative spin...
The numbers I~ have put together are legitimate.
Of course discounted NAV is important for pure analysis.
The numbers I have used include actual cash being spun off at $2 BILLION a year after ramp up.
Thats serious money...
Its 250% of SOLGs current MCap.
I can assure you...sustainable cashflow is king for fund managers investing in shares...
I can't remember what the discount rate applied to the PFS is but I know that ALL the numbers are conservative.
The 10 year US Treasury rate is currently 2.85% and serious analysts say we are already in stagflation....
When you buy a car do you do a DCF before determining whether you can afford it.
My analysis is of legitimate value, because it demonstrates beyond doubt that SOLG is MASSIVELY undervalued and thats all that matters to the investors I am writing for....
Best wishes
So let me pull this all together...
The important point will be the P/NAV once all research analysts have updated their models and price forecasts.
I'm confident that SOLG will ramp up its analyst coverage now that the PFS is definitive and we may get revised estimates ranging from 55p to £1.35p or more...who knows...
Having looked again at the EBITDA in the PFS detailed figures, in the first 5+ years (after ramp-up) EBITDA can be expected to come in at $2bn, as a minimum.
Now remember that Atalaya Mining, with one small mine and a mine life of 13 years is on a P/E of 4.65; BHP 17 and ANTO 16.
So I think it is entirely reasonable to use a multiple of 5 times for SOLG.
That would mean an EV (Enterprise Value) of $10bn, equivalent to a Share Price of 347 pence.
Yes thats right, you read that correctly...
347 PENCE...and thats based on Cascabel alone...
Now do you see why this share price is bonkers... This gives an astonishing indication of potential upside over time (5 years plus).
Again for comparison, ATYM was 80p just over 5 years ago, about a year before production.
In February it hit 446p...based on one...small...mine...
So you can see why...
Quady wants Alpala to go to production
The current valuation of Solgold is insanely low
The revised PFS is so attractive...based on an ASSUMED copper price of only $3.60...some analysts are forecasting $15,000 a tonne or almost double that price well within the time frame above
Any major with depleting copper assets and/or gold assets would be playing a dangerous game by waiting too much longer before making a bid...
And if you want an idea how exciting this could get, read how Robert Friedland made himself a billionaire out of Voiseys Bay once the insane bid battle occurred...
GLA and happy as always to explain anything and have the figures challenged, but...
I have already had the above confirmed by my contact...
Red good homework there my friend
And will eventually drive the market valuation if a bid doesn't come before.
I quite understand that many on here will wonder what EBITDA, P/E, P/NAV etc and why they matter.
I apologise to anyone who may think that I am babying them, but the analysis earlier and what I am about to post show not only how ridiculously undervalued SOLG is, but also what will drive analyst/broker revisions and are the bread and butter for any major considering a bid.
So...to start with..
EBITDA is a measure of pre tax profit and it stands for Earnings Before Interest, Tax, Depreciation and Amortisation.
Investors and analysts alike tend to focus on three key measures:
P/E (Price to Earnings) this is calculated as to the Share Price divided by actual or forecast EBITDA
P/CF (Price to sustainable cashflow). The market capitalisation divided by the annual sustainable cashflow. This is important because its not lack of capital that busts companies, its lack of cash.
Finally, P/EV (or P/NAV) This is the MCap divided by the 'Enterprise Value' or Net Asset Value. This can be determined from the Balance Sheet. So SOLG's NAV at the last MD&A was $320.337m, so the P/NAV ratio was approximately 2.
The projected average annual cashflows from Cascabel are $743 million.
The current MCap of SOLG is $821 million.
So the P/CF ratio is only 1.1
That means that in an average year for Cascabel alone...it would only take 13 months to regenerate the entire market value of the company IN CASH.
So it doesn't take much to imagine how soon the company could [ay dividends. Certainly well before Year 5 of the project and possibly as early as Year 2 or 3...
From, say BHP's point of view, Cascabel would be enhancing their earnings by $1.2 billion a year and generating free cashflow for them of $743 million.
All sounds pretty amazing so far...
But it also demonstrates that worrying about only 3 million shares traded in one day is pretty academic.
If you are here as an investor, the numbers at the CURRENT copper price out of the PFS are pretty amazing.
One other example before I move on...
The CASH COST of the Capex is $2.7 billion...in an AVERAGE year Cascabel will be throwing off $743 million CASH which means the Capex could be repaid in just 37 MONTHS...
But it gets better...
Awww!
RK, in the absence of a bid we should all 'want a cash raise'. We'll be bust without one.
Angels on the head of a pin matey... ;-)
Sounds like you actually want a cash raise...
Lets leave it at that and part on good terms as always...
In fact at the current copper price the P/E comes down to 0.57...
Antalya currently 4.65...
BHP 17...yes 17...ANTO 16...
This makes it a no brainer for a major, IMO
Even a SOLG takeout price of 711 wouldn't dilute BHP's P/E ratio...
Can you see what a bid is inevitable...?
Well done again DBW...
As I mentioned before, that puts SOLG on a Prospective P/E ratio of 0.68...
And thats just for Cascabel alone...nothing in for Porvenir or whatever...
And thats based on an assumed copper price of $3.60/lb
Sooner or later value will out...
David7015, your 09.30 post is spot on. I've taken your advice and binned the moron. You can only take so much manure!
By the way, Darryl met Newcrest on his first day in post and BHP in his first week...
I di lunch...
But Alpala and Regionals including Porvenir are separately designated, so the 'ring fence on Alpala isn't a problem and...
The forecast expenditure on Regionals is greater than the amount raised from Valuestone so that isn't a problem either....
It still leaves $14 working capital million for admin and licences...
I think they'll hold the issue up until either, the SP is up and moving up or, if they have a significant interest in North America and Europe where the focus is right now...
But of course a bid makes all this academic...
As the Colonel has implied, the extra $50m from Franco (yes I know it elapsed but they'd willingly give it) or a juicy similar offering from Boliden might just be enough to snap BHP's patience...might not need much...
Thats fine addickt....news before then...
RIO overdue...could be the first or se and RNS...
Sean, it takes less time to filter the idiot than respond. It also stops repetitive & vitriolic responses which clog up this board.
30p + close today, then UPWARDS & ONWARDS from next Tuesday !!! It's coming ; o ))
------
30p + close? Wishful thinking!
Western Australia? No wonder you're so lonely. A cruel mix of remote geography and your awful personality.
RK, I did see your analysis and agree with you...a fund raise is likely by the end of June, which in my book is soon.
Bid incoming then :) :) :)
Hi addickt. Please give your reasoned logic as to why a placing is due soon.
And can you define soon?
You probably saw my financial analysis, prompted by my contact who was not implying an early equity issue.
Cheers