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The reason for delaying porvenir PFS is because the inflation backdrop makes it look barely economical. With costs rising around 10% to 20% across the board and metal prices remaining depressed, the numbers just don't stack up. Throw in the added issue of a 5 fold increase (or more like 3 fold) on debt or finance and it's really not something to be championing to market.
When or if copper gets a surge on (probably 2024/25) and inflation drops to predicted levels of around half what t is today... then by all means bang out a nice PFS. Until then... keep your head down... and avoid pi55ing into the wind.
How can I not have grasped it Fort. The SP is 14p.
My point however is whether you'd like to own shares in an explorer with 3 or even 4 respectable projects (including the mammoth Cascabel) or would you rather just own the two when a major comes calling?
The more ounces and pounds in the ground that SOLG can point to when they get round the table the better, particularly when you see CEOs express takeover prices in pence per oz/lb.
You've said yourself countless times that the market is simply a vehicle for valuing paper today. If you still believe that then I can't think why you wouldn't be in favour of SOLG putting more metals in its inventory, particularly when we're actually spending the money on wages, travelling to conferences and er, that's it.
DM
See link below
https://www.spglobal.com/marketintelligence/en/news-insights/research/copper-discoveries-declining-trend-continues
See Porvenir on there anywhere? And you think that's not worth £350m+?
Don't recall Scott saying anything negative about Porvenir but it's clear as mustard that doing another MRE on Porvenir or Cascabel is pretty self defeating if aligning with today's inflation numbers and metals prices.
Porvenir is a very large discovery... if Scott plays it down at all then it's probably because he wants to chuck it in with ENSA to sweeten a deal with the Chinese lol! We know the Chinese like Porvenir. We know the market cares not a jot about it. Hence my point to Bozi... what's the point of finding a world class resource (top ten finds) if the market simply ignores it?? I don't think he's grasped that but yet! Yes... exploration is vital for growth but not at a time when the market doesn't want to listen... it's just a cash drain in that situation.
Pleb
Fort, giving you the benefit of doubt. can you post your evidence that nobody has any interest in copper exploration companies. the problem I have with you mate. is that you post daily updates on where we are at. but never ever, ever, post a scrap of evidence to support your ramblings. to be honest mate, im not surprised you dont ever, ever back up your posts with evidence. because to be honest, there isn't any.
Fort your recent post, once again shows you haven't a clue. you posted.
"Ortherncopper, I'm not sure 'exploration' does any good near term. I used to think it was the main catalyst but not in these recent markets. Lots of companies out there delivering some nice drill hole results and the market just ignores it. No one is interested at present... the pi hype days have gone".
it really is becoming embarrassing, showing up your lack of research. do you post the first thing that comes into your head.
log onto "proactiveinvesters" it shoots your claims down in flames. it shows there is a great deal of interest in copper exploration companies.
the more you post mate, unfortunately the more out of your depth you appear
Fort - you don't think that finding another deposit, say one half the size of Alpala but with characteristics similar to Porvenir, helps the company and the share price, even temporarily?
Crikey. I don't know how to answer that without being condescending towards you.
Yes markets are risk off and yes this is a trend that ought to continue for a little while yet, but if you don't think that growing it's resource investor helps an explorer then I'm not sure what there is to say.
We all know that politically we're almost back to square one for the time being. Such is life when we have right wing governments lining their own pockets. Nobody can say they didn't see that coming.
You talk about developing Cascabel and developing ENSA. The reality is that we don't have the means to do that. PFS project economics mean that multiple royalty deals are a risk to the business and debt funding is out of the question. If that isn't the reason to continue working our other licences, granted in a systematic way, then I don't know what is.
A full offer for Cascabel or the company will undoubtedly be held back until the teeth of the next global downturn. You could argue that is looming. However, the way SOLG has behaved in the last 18 months means we won't be receiving fair or full value when such a proposal arrives.
Nobody cares DTH
Ortherncopper, I'm not sure 'exploration' does any good near term. I used to think it was the main catalyst but not in these recent markets. Lots of companies out there delivering some nice drill hole results and the market just ignores it. No one is interested at present... the pi hype days have gone. SOLG spent a lot of cash on Porvenir. And rightfully so... it actually ranks very highly on the table of top discoveries across the globe. It's probably worth SOLG's current market cap. That's the irony here. If the market doesn't reward exploration results... then what's the point in burning the cash and in process weaken your financial position on your main asset sale ambitions which is by far the most important.
Recent financial raises and royalty streams have given you plenty of insights into how and why SOLG has a dilemma with regard to core business of exploration and the jewel in the crown ... ENSA. All funding of late has been toward derisking and developing ENSA. Funders don't like it when they give a company cash toward ENSA and then find it's been blown on exploration that has delivered some nice holes but is light years away from delivering conclusive MRE's not to mention more cash burdens along the way.
In summary, SOLG has an. enormous Asset on its hands and as a company is way too small to develop it. But equally... the process in seeing this asset to fruition means doing exploration across folio will have to wait. And in this market, I think it's the right decision. As for everything else in your post about 'desperate' and weak positions etc... just the usual garbage from you... made up in your head ... and based on zero evidence. Just because SOLG are quiet on internals, does not mean they are desperate or weak. That's your perception. There's an election event coming this Sunday and all involved will want to see some stability (politically) back in Ecuador after some testing 18months under lasso. Correa wants back in and looks like he's going to achieve it.
Personally... FWIIW.. I'd like to see SOLG split the business into two. ENSA and Exploration. Float the exploration business as a new entity and allow investors to have shares in that business or sell out and stick with ENSA. Vice versa etc.
Problem is... there's no doubt about it... SOLG is far more attractive as 'one bite' sale with that exploration folio bolted into any deal. That's the issue... undisputed mining acreage is hard to find in ecuador and SOLG has bulk of it. That helps derisk any concerns over ENSA as presents some ops for the buyer to seek growth outside of ENSA if or when is required.
Brisgas. That was a copy of bbg posting telling us he lived in australia. Keep up
Waiting for 10p here then I may be interested again
China is just the wider economic issue.. it will affect other markets and companies far more directly than Solgold, but we are not immune.
Our issue is quite simple.
We have, for some time now, been doing no exploration drilling… (since January Last year) We are mothballed… we currently have no plans to restart any exploration.
We have shut everything down and are now slowly burning through our remaining cash reserves rearranging the office furniture, watering the plants and generally trying to just look busy….. kicking the tyres, you might say.
The market has long since lost interest in Solgolds failed promise to deliver anything. It no longer listens to our managements hyperbole or grand projections…
We are now desperate to find a monetising event or we will need to do another raise before you know it. The whole mining world knows we want to monetise the asset… every party linked to our management have openly stated so…. Yet we still have no hint of any success there…
Surely you have to ask why??… Are there actually fundamental problems with the extraction of this asset that come up at due diligence stages? Is it, as some pointed out waaay back in the days of the Crux report release, actually not economically viable without far higher metal prices?
I don’t have the answer as to why the majors have never shown any real, substantive, eagerness in wanting to own Cascabel and gorge on its supposed riches, after our management hyping it up it to the world as the most incredible resource…. And BHP or Newcrest putting in 50-100 million and early stages, does not count as real interest in owning an asset… they do that regularly with many early stage projects..
We are now in the weakest position when it comes to any discussions.. we are the house seller in desperate need of a sale… and the potential buyers know it… Any offers, IF they ever arrive, will reflect that…. Until then we just slowly burn through what’s left of our cash.
Agree Quady.
If the majors want us, they will need to pay up.
Question is, why is Ecuador so comfortable with us, even allowing Cascabel to proceed at all costs... What have we shared with them re future funding capacity and how small /cheap is the revised capex program. I believe this will be revealed post election.
SC did say last conference that a royalty deal with an offtaker remains an option to the business.
Our project could also very easily achieve massive debt support from the government and or global development banks.
This is a tier 1 that boasts a huge critical inventory.
Q, he wasn't. The terms of reference couldn't be clearer. In fact only one of the four specific options mentions finance, and even then it only talks about financing alternatives 'that enhance project value', which is about as ambiguous as you could get.
Sure, he's subsequently said more about finance - although we've had no concrete news - but if, as you believe, this is the only option being pursued, surely he should say so...but he hasn't. To me it's blatantly obvious they're still looking at a variety of options, but they sure as hell are taking their time over it.
Good morning addicknt, I do believe that when Scott was referring to nothing is ruled out, he was talking about the financing.
No indication we are up for sale.
In fact the complete opposite.
We are now going to cut into Cascabel and start extraction next year. We just need a few more details and a start date.
For me, the main part of the problem is that they've failed to provide evidence of any progress on the SR.
There were some very specific possible options outlined, as well as the more general statement that they'd look at anything. Surely after one year they are able to give us a clearer view of what they've been up to? Have they ruled anything out? Are they pursuing one particular option? For example, they were examining the possibility of spinning out everything other than Cascabel. What's happened to that idea? It doesn't take a year to work out whether it's feasible/desirable or not.
Of course I understand they cannot say whether they're in discussions about a sale, but to simply say there's been much 'tyre kicking' was not in the slightest bit helpful. (I wonder if SC understands the meaning of this phrase to the English? i.e time wasting)
Too many companies use the excuse that they cannot break confidentiality and insider rules, when in fact they are using this as an excuse and my fear is that this may be the case here.
I should add that it's quite possible the political situation isn't helping, although I think some people on here are over-stating the gang related stuff. If this is having an impact, shouldn't the company say something about it?
I'm not downbeat about this, but I do feel the board shot itself in the foot by announcing an SR only to then downplay it and waffle on about it being "open-ended". A bad mistake in my view.
They are just treading water having cut back on most outgoings while any interested potential bidders come to their decisions. Maybe a preferred candidate winning on Sunday might be a catalyst…….then again maybe not.
I wonder if posters can inlighten me is solg trading at a very level due to sector being out of favour on the back of China slump or has solg got bigger problems
A holiday in Brisbane only and not NSW so I suspect you are NOT in Queensland.
Your posts are there for all to see bbg.
You need a good memory when telling porkies on a public board.
Chow
All is well copper - I hope you guys are having a great summer!
Love it when the keyboard warrior gets rattled... How many green filtered posts will we see today...
Morning Copperpot
Should have said empty green boxes. Like empty bottles the make the most noise but have no substance inside 😊
Silence is golden....golden!
Interesting thing is bbg. both copper pot and aquinaga, have been found wanting in the credibility stakes recently.
both supporting you. funny that.
so to repeat my question mate, where are you residing now
Morning Aquinaga......haha.