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Is Macron a total joker? How can he be President of a country ffs. Russia is crushing Ukraine , but lets not crush Russia because he has no balls for that. Typical French , roll over.
David Iben put it well when he said, 'Volatility is not a risk we care about. What we care about is avoiding the permanent loss of capital.' So it might be obvious that you need to consider debt, when you think about how risky any given stock is, because too much debt can sink a company. Importantly, SolGold Plc (LON:SOLG) does carry debt. But the more important question is: how much risk is that debt creating?
When Is Debt A Problem?
Generally speaking, debt only becomes a real problem when a company can't easily pay it off, either by raising capital or with its own cash flow. In the worst case scenario, a company can go bankrupt if it cannot pay its creditors. However, a more usual (but still expensive) situation is where a company must dilute shareholders at a cheap share price simply to get debt under control. Having said that, the most common situation is where a company manages its debt reasonably well - and to its own advantage. When we examine debt levels, we first consider both cash and debt levels, together.
See our latest analysis for SolGold
What Is SolGold's Debt?
The image below, which you can click on for greater detail, shows that at December 2022 SolGold had debt of US$139.4m, up from US$113.0m in one year. However, it also had US$77.2m in cash, and so its net debt is US$62.2m.
debt-equity-history-analysis
LSE:SOLG Debt to Equity History February 18th 2023
How Strong Is SolGold's Balance Sheet?
We can see from the most recent balance sheet that SolGold had liabilities of US$12.0m falling due within a year, and liabilities of US$144.3m due beyond that. On the other hand, it had cash of US$77.2m and US$9.72m worth of receivables due within a year. So its liabilities total US$69.4m more than the combination of its cash and short-term receivables.
Since publicly traded SolGold shares are worth a total of US$386.6m, it seems unlikely that this level of liabilities would be a major threat. Having said that, it's clear that we should continue to monitor its balance sheet, lest it change for the worse. The balance sheet is clearly the area to focus on when you are analysing debt. But it is future earnings, more than anything, that will determine SolGold's ability to maintain a healthy balance sheet going forward. So if you're focused on the future you can check out this free report showing analyst profit forecasts.
Since SolGold has no significant operating revenue, shareholders probably hope it will develop a valuable new mine before too long.
Caveat Emptor
Over the last twelve months SolGold produced an earnings before interest and tax (EBIT) loss. Indeed, it lost US$23m at the EBIT level. When we look at that and recall the liabilities on its balance sheet, relative to cash, it seems unwise to us for the company to have any debt. Quite frankly we think the balance sheet is far from match-fit, although it could be improved with time. For example, we would not want to see a repeat of last year's loss of US$1
I can't get it to open Quady when I tap on the link? Would you copy and paste it here please buddy if you can open it.
Thanks in advance.
Who talks the most carp on this bb? I would say Rednight , closely followed by Fortissimo.Do those guys think anyone is remotely interested in the inane rubbish they spout?( Except Bubble ,excused)
Polls mean nothing , hard cash talks the talk. Why don't you guys shtyu th f7 UP . Sh%ttalkl EVERY BL%%DY DAY WHILKST SOLG burns. And all our hard earned cash. Ignore me all you like , I tell it as it is.
Just to make it easy for you , not patronising. I have 32k invested here at 26p , was hoping for 55p. Now just want my money back from this sh%tshow
Yeah great ninnit. So tell what was your preferred sp then , and what is your get out price mow?
I beg to differ covgaz, it's never been less of a gamble at any point since the covid lows.
A few more essays posted here today. U guys crack on , its just a gamble from here
TA
10p double bottom covid low for info
Posted on it tw-atter some months ago….
Fortissimo very good point why would they sell until mid 20s imho would be daft
Bozi.
1) I'm please he made it public and it seems quite a few people on here agree.
2) Low volumes and small private investors getting spooked. Irrelevant.
3) Fair point and there is a risk.
4) As I've said previously, I would have preferred complete clarity on this point.
I'm not sure why your comments should add up to greater pessimism.
Bozi,
"where are the speculators"...yes indeed. A valid point. The absence of buying from Norges, blackrock or the chinese is a concern especially at 12p/13p levels.
Putting that aside and looking at it purely from a traders point of view, the latter don't like zero news periods. So when the company says... erm... we now think we'll conclude the merger around end of Feb (27th) or possibly a few days later (early march) that's the green light for many to sell. Why hold stock for 10 days+ when you know nothing is going to give the sp a lift?
There is of course a strong chance that the RSI followers (they buy when RSI is low) will be wading in next week. In the last 5 years, SOLG has only been sub 21 on the RSI 10 times I believe. It's a rare event and is always accompanied by a decent bounce. Plenty of TA followers will be hoping for a dip into the lower 12's or even 11's but being too greedy can also see them lose out. Then there's the ARB boys of course. Some hefty shorts in play (they've already forward sold their 15 x SOLG shares when the price was 18p. Now they can either just wait until those 15 shares per cgp share arrive and close out or they might chose to close out a few in open market (some of that might have been going on in the 14's.
All in all. When you combine some over leveraged holders, factor in some squeezes, some ARB players, some impatient traders, and a potential 10 day sign posted zero news period.... it's a proper sheeeeet storm is it not??
I don't think the low sp has anything to do with fears over the business or assets or management but more to do with the notorious news void. Everyone knows that Scott and co are holding their cards close to their chest until AFTER they have their SOLG shares in the back pocket. Then and only then will they initiate the assumed ramp fest kicking off no doubt with a hole or two on Rio.
It seems to me that Scott and co don't want their CGP shareholders to be selling post share issue. Let's face it... why would they sell at 14p or 15p or even 12p?? That's a loss on the 16p shares straight off the bat.
Far better to issue those shares to CGP holders and then issue a bullish rns on plans going forward giving them all a solid reason to hold well into the mid 20's and beyond.
Addicknt
1. The way Scott Caldwell has lambasted previous management, whilst many view has a specific purpose, leaves me uncomfortable. For example, did it really have to be done via RNS?
I mean surely the irony of criticising poor management whilst announcing a delay of his own wasn't lost on you?
2. The continued selling of the stock worries me. Plenty keen enough to take a bath even down here at 12p, confirming how far we've fallen whilst suggesting there might be further to go. At an advanced stage of a SR where are the speculators?
3. The potential impacts of severe workforce rationalisation. I'm not saying it doesn't need to happen but cutting a lot of positions together can cause us a problem in terms of knocking local sentiment. A dent to our social capital.
4. The fact Vujcic believes we are adequately studied at Cascabel. He's an investment banker, not a mining specialist.
Less
As I said the only NPV the board of Solg were concerned about was to maximise the NPV of their salaries divided by work done or effort expended
add, I think the RNS confirmed what many of us had thought for some time, that this company has been appallingly run for some time now. Caldwell admitting this is a welcome and long overdue sign of humility, and it's good that our senior management team are now shareholders 'proper'. I think we're all suffering from a hefty dose of fatigue, having spent years second guessing what strategy is of the company we've decided to trust with our investments, and failing to deliver on what they have set out to shareholders (i.e. the countless missed deadlines, delaying or not publishing of studies etc.).
I agree with you that we need to give new management some time and the benefit of the doubt - it's just hard when the share price is languishing at lows and a few months into the gig they're already markedly late on completing the merger. A lot rests on the outcome of the strategic review and then their ability to actually execute whichever path we end up taking.
More confident add.
Sp is rubbish and is no reflection of the value of the company, just a reflection of management performance over the last few months. Thank the lord Scott Caldwell is starting to put things right and I personally found Fridays RNS refreshingly honest. Whilst the last couple of months have been frustrating, I personally believe the direction of travel is locked in and its now just a question of patience and belief in the new management to do what they say they are going to do, and reward all shareholders for their backing of Solgold.
We all believe in the asset, the outlook for the asset and the fact that the money men in charge want to move on as much as we do, so have a great weekend all and try and forget about your average buy price of this share as it will be a distant memory sooner or later. ATB, C.
Bozi, why?
Fawn can go for starters. If Scott has any sense he'll save $400k a year. A ludicrous salary for someone that quite frankly has done nothing for the last 6months+.
If Scott wants to save more money then get rid of Twigger. He's been a complete waste of time and has his fingers in too many pies to be able to deliver shareholders their money worth. How many meetings has he attended in the last 12 months??
Then there's Citi group, nomads and pointless TSX listings that cost a fortune. Get some new ones in, slash their contracts and get them to earn them.
When a companies stock drops from 40p levels to 12p levels seen on Friday yet the basic asset and cash balance of the company is unchanged (from days of 40p) then the finger can only be pointed at management and advisors.
Granted there is some depreciation in sp due to dilution (fund raise) but the extra 15% ENSA should make the CGP merger relatively neutral.
40p to 12p based on what?? A combination of BHP and NCM causing problems, then Darryl causing more problems, then Putin and post covid inflation causing PFS2 problems and then the ugly poorly funding 'test the market' situation.
When the markets crashed in Oct 22 due to market panic on inflation, SOLG tested 13p levels. Many stocks tested lows but majority have all now either jumped by 40% to 50% or are bouncing back steadily as backdrop improves.
The merger and TSX issues along with some ARB boys have undoubtedly made the share price top heavy with sellers/shorters. The nothing really explains the drop from 16p levels to 12p. Nothing at all apart from the usual market casino mechanics which prey on the over leveraged and turn some traders and investors into 'forced' sellers through margin calls. I've thought for sometime now that there might be an 'event' which see the market or bigger firms squeeze the pi's out of their shares right just before the long awaited asset sale or takeover event.
SOLG is known for drifting on now news and management have literally telegraphed the news free zone through to end of Feb. My hunch is that buyer will emerge next week as trading days to end of Feb are limited with 6 or 7 left at best.
more.
We ticked all the boxes, we are cutting costs, we have a depressed SP and an even more depressed PIs base. Ideal conditions for an offer, whether it is for Alpala or the whole company.
Still annoyed that I am 40% down on my investment but I think I am closer to get my money back than I was last week
I’m glad it was all confronted and outed in that RNS. But, like the ABBA song, they’ve played all their cards now, no more words to say, .. but hopefully one more ace to play. It’s very much **** or get off the pot time now, as the pub landlord once wisely observed.
More now sorted
Less.