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Nick mather
The man who struck gold only to gamble it all on red and see black come up.
Agree DM but I think they need to test drill the mine shaft and prove theory for first part Capex works before they can then bolt on cave 2 and 3. It's there for the next man (as they say) but no way a buyer will be paying for that. Always been about IRR due to self funding concept but if the latter is no longer required then they may as well have gone for a model better suited to a major or national which would have involved probably double the Capex and NAV closer to £10bln. Scale is where Alpala comes into its own as world class metal mix but SOLG had to deliver a PFS that matched the prospect of self funding.
Worth noting that the Chinese have started off 'small' with prospects in the south based on fit return of capital and then looking to scale up as time ticks along. Fortunately. SOLG have Tandy as bolt on and that present s a similar path scenario. You never know... the first deal that gets a bid war going could be the capital injection (JV) that see's Tandy move to production well before Alpala/block cave. Throw in Porvenir producing as well (early doors) in the south and a decent chunk of Capex could be covered off with the smaller faster return easy to mine projects. I guess we'll find out soon but defo expecting SOLG to split ENSA off or sell it followed by a retention of folio and renewed exploration verve to commence pretty soon. The old girl could be flavour of 2023 if we get ENSA deal executed alongside a couple of very nice long high grade holes on Rio or another prospect.
davethehorse,
If you assume any monetisation event will involve ENSA 100% then share price is irrelevant, placing levels irrelevant... all irrelevant. What is relevant is how much of that NAV (£4.3m ish) as per PFS is going to be paid by Chinese or another part. So the question should be a simple one here for investors.... what discount to NAV is likely and acceptable and gives the next man something for the carried risk going forwards??
Some say 40% NAV? Some say 50% NAV. What's left to derisk on the asset?? Block cave questions will not be comprehensibly answered for 2 years+ and carries risk.
40% NAV equates to £1.7bln. Throw on £200m or £300m for rest of folio Porvenir and some cash balance included (£40m?) and you have close to £2bln split by 3bln shares (thereabouts + some options) and bingo.... equates to 66p a share.
56p for ENSA. 10p for rest of folio.
Remember the previous recent highs of 42p were gained without a bid or monetisation event (apart from royalties).
So if we return to 30p levels (on par with the old 42p) then it's more than possible to see this double again on a winning bid situation. When we were 42p most thought it would move 50% higher on a bid from there.
My conclusion would be that anything in the 30's would be viewed by many as plausible but low ball. Anything in the 40's more acceptable but anything in the 50's and 60's would required an auction or bid process with multiple parties interested. The latter is all down to Maxit and the markets appetite for a long term Capex heavy project in a fledging mining nation like Ecuador.
I think 40% to NAV might be the best we can hope for and the biggest shame of it all is that the PFS is basically covering just 20% of the potential mine due to SOLG's desire to limit Capex in favour of bolstering the IRR.
IMHO, the best case scenario for shareholders is to sell ENSA, pocket cash. Hand it back to shareholders. And then drill baby drill on the rest of the folio through equity raises and placings and hope we find another Alpala or two.
SM - don't row back. Your comments (all of them) last night were bang on the money. Get another case of your favourite red ordered in I say!
Add - respect all your views but not sure I can agree with them on this occasion. The way you end your post is a good barometer for what you and indeed a lot of us are feeling at the moment... hope.
I for one don't ever remember the strategy of the company being to make a discovery at Cascabel and sell it on as quickly as possible. That was the CGP strategy but it wasn't SolGold's. As soon as it became apparent what we were on to the conversation shifted to development, CGP contributing their share of the costs incurred, etc.
If you think back, there was no desire just to market the asset. It became about finding the next and the next in the cluster in Aguinaga, Moran, Tandayama, etc.
This was all off the back of the company moving out of Solomon Islands given operational challenges at the company's projects there.
The story was all about making a find in Ecuador and riding it as long as was necessary. It shouldn't therefore have come as a surprise when Ecuador got big ideas about widescale overseas investment, opening their cadastre up further and SolGold were one of the company's to take part, leveraging their early environmental, social and governance efforts.
Where this went wrong IMO, was with the PEA and flawed first draft PFS. Mather was too aggressive and went unchecked until the 11th hour when Keith Marshall applied the brakes. By that point, we'd seen a rocky 24 months and LTHs started losing faith in the company's ability to get this progressed.
Had Mather restructured the organisation after the second Alpala resource estimate and brought in a team with the required knowledge and experience of studies then I'm quite sure we'd be into the early stages of construction now, so for me it's not about not believing the production rhetoric but more a case of watching a lack of delegation to suitable hires slow the company's progress considerably.
The way I see it, is that a revaluation should be forthcoming, but it likely won't be seismic. From a 15p level I'd say +/-50% is the likely result in the next 3 months, with another +50% in the offing to the upside if things play out well.
So ultimately a positive SR and we're back to 40-45p and a poor one and it's hello 7.5p.
addicknt, your comment is correct, especially the frustration aspect which is reason for venting and rubbishing the BOD for the inactivity. by many including myself.
I still believe(hope) this is going in the direction of the best shareholder value it can muster given the circumstances.
ATB
Jezzoo
That's the reality now, for those thinking we we going to get bids of 40, 50, 60p etc the likely figure will be nearer 30p with the dilution, at least to start with, maybe less...imo...
FWIIW, I think investors should look at the market cap and not the share price, then compare to times of old.
The market has a history of keeping market caps in check.
As an example, SOLG's market cap when it tested 42p highs seen last year (lot of people were happy and clapping with joy then) was just shy of £900m based 2.3bln shares and on 85% ENSA.
When the sp dropped back to 25p which acted as the base level for sometime (call it the comfortable range... not over priced and not under priced etc) the market cap was £570m.
Recently we've seen 14p/15p levels which are the lowest for a long time and many think it reflects a poor sad state of affairs at SOLG towers. Market cap today at 14.5p ish is £335m. However (here's the fun part or not)... post merger share issue (and recent fund raiser) to CGP 14.5p x approx 3bln shares = £435m cap. So when everyone was happy clapping at 42p (£900m) are we to assume all will be happy clapping at 30.5p (£900m)?
Of course we have an extra 15% ENSA in the bank but if the 85% is priced at a major discount eg 10% NAV (as it is now) then 10% of CGP's 15% ENSA stake is a pony £65m! That's ridiculous, but then so is the 8% NAV discount. However, if you take the £30m raised through Chinese at around 16p then in value terms, the chinese have acquired 6% of ENSA at a 11% of NAV.
In a nut shell, market cap matters to the stock market. So as an example, at 19p, SOLG is £570m market cap post merger. That's essentially 25p levels of old when most were non plussed and waiting for events to unfold. So at 16p or 17p seen in recent weeks that's just 10% off those levels... hence there really should be no fear of doom and gloom. No fears that things are on rocky shores. It's just the product of hefty dilution vs a market that is unwilling to price in the added 15% ENSA correctly or even get close to proper value for the NAV which should be 20% minimum based on the derisked advancements of Alpala.
Sorry for long winded post... but reality dawns... an appropriate and fair discount to NAV will only take place once a monetisation event or partner deal or full asset sale has been presented to the market. Until then... the sp is largely irrelevant but the 'animal' is actually not that far off what it used to be. In fact, I'd argue with $80m+ in bank, 100% ENSA sorted and AGM resolutions flexibility granted.... SOLG is in much better shape. Enjoy your weekends.
… the ship is being steered by a significant core of substantive shareholders who have known form, and a lot to lose personally. Their intentions (as we surmise them) make practical and pragmatic sense. I’m just topping up as I can now so my own goals can be met by a lower exit price than the 80p+ I once hoped for.
Morning addicknt, you're right RE Mather - my comment last night was flippant and a poor attempt at word play after too much red wine. Also agree that there is now a clear direction of travel, but mildly frustrated by (yet another) missed deadline and subsequent knock on effect on the share price. I remain hopeful of a positive outcome.
Enjoy the weekend.
SM
SM, I don't often disagree with your comments, but I'm afraid on this occasion I do. Mather's shift of strategy led directly to the problems we've encountered. Had he stuck to the initial gameplan we would not find ourselves in this situation. No one believed the production rhetoric and it seriously damaged our credibility.
I'm also somewhat mystified by the belief we are currently 'rudderless'. Sure, we're all worried about the current sp, but surely people can see what's going on here? We've entered a new phase under the control of a team who appear to share our opinions and I assume are giving full attention to ensuring the SR delivers on their promises.
I believe we're about to witness a seismic revelation and we have to be patient, no matter how frustrating that is. I admit, if we had not raised the cash, I'd be extremely worried, but we did and we have access to more - which we don't need at the moment.
I think folk should stop framing the company in terms of the old board and strategy - we've moved away from all that and are on the cusp of something completely different...I hope!
as a minimum its been scuttled on the rocks...for now...Will the rescue come????
The rudder fell off when Nick left. The boat started filling with water when Darryl took charge. Now a gang of pirates are attempting to sell it for scrap before it sinks.
My take is I think the rudder fell off and they haven't noticed yet.
Yes, I'm sure several large financial institutions are currently hashing out the finer details of a finance package that will allow us to bring Cascabel to production with our interim CEO and interim CFO.
Did you see any pigs flying at your star party per chance Quady?
Slug - no one expects you to "conform to wokery" whatever that sh*te means. Just stop being such a pr*ck and venting about the climate / the vaccine. Try and care less and enjoy life.
Hi Jezzoo like most on here unsure what is happening.
I believe we need to wait for the strategic review.
I do still believe on the balance of evidence we are taking this to production on the evidence before us.
But I am perplexed by current events.
I am curious as to why we haven't had a clear RNS.
It's possible that we are waiting for the placing of a financial agreement.
What's your take on the SP Quady ?
Okay AsharT reported for being Slug.
Goodbye Slug, nobody here wants your hate apart from DBW and a few deluded individuals.
Sorry been away for a few days having fun with friends, at a star party.
I see sluggy is back. Don't worry he's going soon. Even though his best friend DBW is supporting him.
Bye Trasha......lol.
Geez Slug, your a bore
I won't be deleted for not conforming to wokery. F--U--C--K you all
I won't be deleted for not conforming to wokery. F--U--C--K you all
Back almost to where I joined SOLG so many years ago ..
EVs are far too expensive to buy for the average family to afford imo.
Personally, I’m waiting for Hydrogen cars to become affordable.
As to SOLG, what a farce of a share price. As DG1 recently noted - our Directors should be absolutely ashamed !!
Please get this done !!!
All in my opinion of course :)
Afternoon all. There is a gap at 13.76p from 29th Sept 2022 hoping if that is filled it may then jump.