Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
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I havent really bothered to post on here for a while given the petty squabbling and entrenched views being repeated over and over. But IMO the situation is becoming clearer, though the end result isnt. Here is how I see it:
1. This isnt an easy sale. I know that the deposit is very complex and the cost to mine is enormous. Why do I know this? Because someone who works for a company who has looked at Alpala told me so. He is a near neighbour. It puts a lot of people off.
2. SC might not be everyones cup of tea, but is there an alternative that will get a better result? I really doubt it. Another mgmt team will weaken the sp further (more uncertainty) and they will be trying to do the same thing, but it will waste another 6 months min.
3. The past has been an unmitigated disaster. Clearly an appallingly run company with blame all over the place. A complete rogues gallery, Mather, Ward, Cazzubbo and probably Twigger too (though I have it on very good authority that he is a top bloke doing an impossible job).
4. Quady still thinks that we are going to production with a staff of seven and no management skills, but we can hire in hundreds of people who are fully qualified and just walking the streets of Quito looking for a job. He says listen to the company - 'We are mine finders, not mine builders'. I just did Quady, sounds pretty emphatic doesnt it? Any move to mining will be the final nail in the coffin, proving that there is NO buyer out there.
5. So 45p to 8p might be The Lassonde curve, it might be junior miners getting crushed or it might be that Solgold is one of the worst run companies in history. Probably all three.
6. We are left with one plan, and everyone knows it. The hope is that Alpala is such an amazing deposit that every big guy wants it and a bidding war will ensue. Its a bit like the traders prayer - 'Please God get me out at breakeven and I promise I will never do it again'.
7. How many buyers are there with this kind of money, who hasnt made big recent investments elsewhere to keep them occupied? BHP and the Chinese. Maybe the Chileans. Forget about Gina, Twiggy, Barrick, Newmont and Lundin.
So we are left hoping and praying that the Chinese want it and will pay a price in the 20s. There is no alternative. All IMO....
Can't argue with any of that Jerry.
Great post Jerry. And a couple of brilliant one liners made me chuckle 😉🙋🏽♂️
A very good post Jerry. Not pleasant reading but a very good post. Not to forget the continual dilution that got us to 3 billion shares. And it's not as if we haven't been punished for our sins, sitting at 9p.
Jerry, good to see you back on here.
With regard to your neighbour's comments, I wonder why they conflict with many other reports, including Irwin's reference to the mining experts he spoke to recently?
Is the answer that yes, it is complex, but it's such a significant deposit that someone will find a way to mine it?
Add, It was a while ago, and higher metal prices will make the hardest to mine deposits easier to justify, and technology moves on. He worked for a mid sized company. Maybe the largest firms will be able to see beyond the complexities.
I see that BHP are looking at Oak Dam in Oz. The deposit is 700m under cover, twin tunnels taking 6 years to complete. No ore for at least ten years. But thats Australia not Ecuador.
The other obvious point Add is that one view is from a keen seller and the other view is someone who wont be a buyer.....
I'm pretty certain the only people capable of constructing this is one of the majors. It most definitely isn't a company with 7 full time executives.
Add
The other conflicting reports are by people posting on twitter/X who have an interest in a higher share price.
Hardly an unbiased report/view.
Jerry’s post is spot on imo
Jerryspaniel,
Franco $100m. Osisko $50m. Both did alot of due diligence. I'm happy to bash management all day long but bashing the asset is nonsense. It's world class. Great metal mix and not surprising that both BHP and NCM got in there fast.
The asset is never in question. It's off the charts. Top ten find globally.
So no one is 'hoping and praying'. That's your conclusion.
The big miners are all seeking out copper/gold opportunties. 20+ interested parties in SOLG data room so one assumes at some point... someone will make an offer. Natural market forces come into play.
But the management team at present are not equipped to deal with Tier 1 assets. That's become obvious. And that's been the problem over the last 12 months.
As far as I'm aware there are not many mines out there today the size of Alpala that can be mined cheaply. None. Tier1 mines cost big bucks. They are made for super majors not minnows.
Colonel, if you were right this would have been sold by now. It’s hasn’t, so you aren’t.
Jerry, there have been a few hurdles to jump this year with politics and redtape etc. But you should know by now that timelines are not a guide to whether something is attractive or less attractive. Nice side step on Franco and Osisko though. Can you explain why after doing extensive due diligence Franco (world class player in industry) decided it was a good idea to chuck $100m at SOLG... Osisko chucks $50m. This is not small change. These guys know that Tier1 mines get built and they don't need a hope and a prayer. So maybe it's sensible to listen to the major industry players than your neighbour?
Out of interest... why hasn't someone gobbled up GGP? Mmm! Tell you wot... don't bother answering that one.
Colonel, the money that Franco and Osisko paid is because they expect it to be mined. But it doesn’t assume that Solgold will mine or sell it for a high price. Just whoever does mine it will be on the hook to both of these parties. They really don’t care what happens to Solgold.
I won’t discuss GGP with you cos a) this isn’t the place b) you are completely clueless about the company c) you have no interest in GGP and d) why should I waste my time telling you what is going on there?