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I asked Warren Irving whether a bid from a major would arrive before the Alpala PFS. We occasionally discuss it here and tend to think that the PFS may be the line in the sand beyond which the buyers will finally open up their wallets.
But Warren's very clear view (as usual) is that the majors don't care about a Junior's PFS, they will base their views on their own models, so the potential bids are not related to the "official" PFS.
So I suppose the real questions are:
1) Do BHP and Newcrest and everyone other interested majors have access to the raw information to feed their own models or is SOLG keeping that close to their chest;
2) If instead the majors have the relevant information, why haven't they bid yet? Are they all waiting to see who makes the first move?
I think it’s correct to assume the majors don’t really care too much about the Solg PFS. So, unfortunately I don’t see it’s publication as firing any starting gun, nor moving the SP much.
My belief was that the majors were awaiting elections, and would seek relationships and reassurances from the victorious candidate/government on extraction policy etc. before committing. Now that the election has long passed, and nothing has emerged, seems I was wrong. Longer this goes on, more it seems that the Quady view is the most likely outcome. It would not be my preferred outcome, and it wasn’t what I initially invested for, however if it comes to pass, I’m prepared to wait.
Which begs the question… why push for us to get on with the PFS via the “open letter “?
ToS …. It won’t come to pass
Those quick enough catch the bird early imho gl,
DBW fair point.... but anything designed to get Solg appear to make progress to any kind of plan gets my approval. In truth, their ability to meet any kind of self declared milestone has been shocking, progress to their own published plans has been glacial, and its constantly had a negative impact on SP.
DBW. Re it not coming to pass.... I still agree. However, I’d say a year ago I was 90% certain, it’s now probably 75%......and falling by the month.
The majors should... in my view.... be keen to prevent any more Franco Nevada type deals diluting their potential future margins. Yet other than moaning a lot, and forcing NM into the background via shareholder revolt, they’ve done little to prevent it.
Strongly agree DBW
ToS yep their over promising and failure to deliver in the past has been shocking. ….. Small signs of hope though recently…. Rio drilling underway ahead of stated schedule and Tandayama MRE delivered as they said ….. let’s hope this is a sign of things to come. A lot to happen in a short space of time that will completely change the landscape here
It's my belief that the charm offensive launched by the company after the agm defeat was aimed at preventing a cheap offer, but it came at the expense of Mather's job, a promise not to seek any more funding from Franco/others and a demand that we repair the fractured relationship with CGP. From our point of view I suspect we extracted a commitment to support the next funding round and to give the company space to move towards the pfs. I have no idea how the shareholders feel about the inability of the company to fill the roles of CEO and CFO - they either don't care because they don't believe it's necessary or, they are not happy, which may explain the CG roadshow.
As far as the big picture is concerned the main dynamic remains - BHP are not here, and neither did they participate in the last funding round, simply to hold a minority stake.
Addinct I just can’t see a cheap offer being successful now …. The Chinese and the likes of Barrick simply won’t sit by and watch this go for peanuts, even if BHP are eventually triumphant…. They’re much better off opening with a half sensible offer…..and so are we :)
DBW, I agree. But as I've said repeatedly, I don't think we'll end up in a bidding process (I hope we do, but I just can't see it at the moment). I'm convinced it will be an agreed deal of some form.
Addicnt - how will an agreed deal be defined / announced without some form competitive auction process and or allowing all shareholders to consider whether the terms are deemed acceptable?
BBG, it's done all the time. A deal would be agreed and announced, followed by an acceptance period (assuming its for the entire issued share capital). It would come with a recommendation from the board and a commitment from those directors that they'll be accepting the offer.
Of course, during the Offer Period, anyone can still bid and the directors, unless they've given irrevocable undertakings, can change their minds. However, any third party bidder will have to take into account the percentage of shares owned by those parties who've agreed to the deal as to whether it's worth their while. If it's BHP bidding and let's say NCM have accepted, as well as NM, it's game over.
As for the director recommendation, they would be duty bound to test out the market via our advisors, as to whether there is any serious interest from other third parties. My view is that unless BHP had signalled they were no longer interested, any potential bidder would consider it a waste of time and money.
This is exactly what happened with Noront isn't it? The BoD recommended shareholders accept BHP's initial bid ahead of Wyloo's. Wyloo then said that's too cheap, and offered a higher amount. The board then recommended that and said they would accept. And the latest is that BHP has now bid even higher, and the board have recommended it. So you had an agreed/recommended bid followed by a bidding war, and each higher bid recommended by the board.
Btw, I should add that to me this explains why no one else has bid i.e because thus far it's blatantly obvious BHP remain wholly committed. Were there any indication they weren't I suspect someone would have made overtures.
BHP 13.56 + NCM 13.48 + DGR 8.9 + NM 3.96 = 39.90....not game over...
You need 75% for game over and 90% for compulsory takeover...
Why would the board recommend anything less than £1...or even £2...?
rcgl, that's why you always hope to get an irrevocable undertaking from the directors/other major shareholders and, for obvious reasons, it isn't easy.
RK, why do you assume it would be less?
Come on RK, you've been around long enough to understand situations like this.
Because some people on here keep talking about a lowball and...
Even at £1 it would be a price gain of 170%...
Noront were 33c immediately before BHP's first offer...the shares rose to 57c and we all know what has happened since...
However, BHP's latest offer is 75c, capping Wyloos 70c....but the SP is still only 85c, a rise of 158% but BHP if successful would only see a rise of 127%...
RK, my hope and expectation is that the share price will have moved north before a process starts, but in order for that to happen the company is going to have to pull its finger out and deliver some interesting news; heaven alone knows there's plenty out there, or least there should be.
The bod would have to be even more useless than I think they are to give irrevocable undertakings….
Which is probably why they will…..