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https://www.heraldsun.com.au/business/solgold-expansion-plans-wont-cop-capital-issues-says-darrly-cuzzubbo/news-story/ebec28b759b6d97a2bd31e41cc067326?amp&nk=91cb0bb8eb80f6bbb1d257195d4c3429-1659701942
SolGold expansion plans won’t cop capital issues, says Darrly Cuzzubbo
SolGold boss Darryl Cuzzubbo says the in-demand copper hopeful has enough cash to get through at least the end of the year.
The Australian Business Network
SolGold boss Darryl Cuzzubbo is chasing big copper and gold targets in Ecuador amid capital constraints.
SolGold boss Darryl Cuzzubbo is chasing big copper and gold targets in Ecuador amid capital constraints.
SolGold boss Darryl Cuzzubbo says the in-demand copper hopeful has enough cash to get through at least the end of the year, playing down the impact of a stalled capital raising effort on the company’s future.
SolGold boss Darryl Cuzzubbo says the in-demand copper hopeful has enough cash to get through at least the end of the year, playing down the impact of a stalled capital raising effort on the company’s future.
Shares in London-listed SolGold dipped sharply last week amid rumours some of the company’s shareholders had baulked at proposed capital raising, aimed at funding the next round of work at SolGold’s copper project in Ecuador.
Speaking on the sidelines of Kalgoorlie’s annual Diggers and Dealers conference on Wednesday, Mr Cuzzubbo confirmed the company had “tested the market” on a raising, but had not gone ahead amid tension between shareholder groups over the structure.
SolGold has had somewhat a fractious relationship with its two biggest shareholders – BHP & Newcrest Mining, who each control about 13.5 per cent of the company – for much of the last two years after a falling out over the debt-focused funding strategy of former boss Nicholas Maher.
Mr Maher also remains a major shareholder, partly through DGR Global, and the company also has a number of activist funds on its register.
“BHP and Newcrest have a view on how we should be raising capital funding. Other shareholders have a different view on that. And we need to work through what’s best for all typical shareholders. But we have time,” Mr Cuzzubbo said.
Mr Cuzzubbo said SolGold had about $26m in the bank, enough to get the company through until the end of the year, but acknowledged the company would prefer to head to the market sooner rather than later.
SolGold is chasing big copper and gold targets in Ecuador and has been the subject of ongoing takeover speculation after both BHP and Newcrest took substantial equity positions in the company a few years ago.
Mr Cuzzubbo said that, despite the ongoing speculation about potential bids, his focus remained on the development of the company’s Cascabel tenement group.
“I’m not worried about getting funding through the definitive feasibility study. I’ve had multiple calls with investors. I’m not worried about it. And DFS, by the way, and the bankable feasibility study, that then opens up offtake options and funding related to that as well. So you get to that point, it opens up other options,” he said.
“When you talk to people they always ask him about the acquisition angle. But our primary focus is to optimise Cascabel and derisk it. That’s how you build value.”
he is saying "sooner rather than later" so I don't think he plans to get to end of year before raising..... I expect a short term primary bid type scenario
Interesting to hear DC openly admitting that tension exists between the company, BHP and NCM.
We all know what happened the last time this happened.
Hope they don’t limit us to £500 worth again if they do do primary bid
“BHP and Newcrest have a view on how we should be raising capital funding. Other shareholders have a different view on that
I’m willing to guess it’s Mather.. as much as i am no fan… it’s good he still has so much invested
Seems to me BHP / NCM are trying to corner us
Yes addicknt the last time BHP tried to get us on the cheap they failed.
Q, erm? They didn't try to get us on the cheap; they simply got rid of Mather.
There's an active 50k seller not helping matters
It's very clear they want another all equity raise and that DC has been exploring alternative routes.
The question is, how far will they go to prevent DC from achieving his wish? Or will he cave-in?
Ray …. Agree with that , hopefully they’ll run out of stock at some point …. I’ve taken a small amount today but will wait to see where this settles
And 100k for Mrs RK at 22.62...
Definitely hold some back DBW- the £100k plus trade 5 mins before the market opened this morning is an indication of what's coming I believe.
NCM and BHP didn't like it when Mather escaped their clutches and delivered a terrific Franco $100m deal. They were spitting bullets. But this time around, instead of playing nicely and doing what you would think..... being supportive and keen on an equity placing at a reasonable price... oh no... the big two want a raise done at much lower price. They want as much as they can get. And the lower the sp goes the more likely SOLG seeks an alternative which they all know will have the two majors shareholders out for their blood. So management (who should act on shareholders behalf) are likely to go with the option that secures their jobs. Perhaps behind the scenes deals are being done to ensure NCM and BHP sign up to voting all directors back in come the AGM in Dec??? There's so many ways NCM and BHP can stick the knife in and SOLG's weakness is the BoD's who quite frankly are now fearing for their jobs and nice salaries. Considering the time to get an asset sold is about 6months +... I really do think their best bet is to action a full sale auction of the business now. It's pointless trying to work with NCM and BHP as both are not friendly and do not want the best for the company. They just want the assets.
Do a deal with Boliden for $50m and stick two fingers up too the major shareholders and just tell the media that both were not interested in doing an equity raise at a fair price. Then produce PFS2 and porvenir PEA in October/November and hoist the for sale sign up pre AGM which would secure their jobs as pi's and others vote them in so they can get best deal for all.
It can’t be a healthy situation where your two largest single shareholders are happy to see the share price on its knees
Just keeps going down,
20P and a raise by this time next week if not sooner.
Maybe the SP will recover somewhat after that.
Compare these two presentations at the same Diggers & Dealers conference...and the IRRs...
https://www.youtube.com/watch?v=BitGYVYN3rM
hTTps://www.youtube.com/watch?v=crj_hEAFx80
They need to do a $50m raise now that the market can believe will leave them fully cashed to DFS...
At 20p it could put a bottom in that we'll never see again...then onwards and upwards...
If Darryl has said they have enough cash to see through to year end then why not just do a minor raise of $20m which buys them another 3months or so into 2023 but like I said... if they add $500m or $1bln to the PFS2 and Porvenir PEA is great then they can raise another $50m in spring 2023 and that should see them through to DFS.
We don't know the level which 'they' tested the market but $40m has never been an issue before. $100m might test some and demand a lower price but why go the whole hog> As I said, the lower the sp, the less likely an equity raise as it no longer presents shareholder value unless of course Franco and Boliden are no longer interested in taking a slice and I find that hard to believe.
Colonel - do you not think it could be the other way round? BHP and NCM were willing to participate in the equity raise at whatever price it was pitched at, but it was the other institutional shareholders who weren't happy? DC said, BHP and NCM have a view on how Solg should raise capital (equity, as they said at the time of the Franco deal), other shareholders have a different view (not equity, so streaming or debt I assume).
Reading between the lines of the Berry St letter, the company and management don't understand their shareholder base (i.e. everyone else aside from BHP and NCM don't want to be diluted to oblivion) and the basic mechanics of capital markets (you can't keep trying to raise equity at lower prices than what the stock was trading at a few months ago). I assume Berry St and a few of the other funds that hold Solg are in the same position as Nick Mather and DGR, they don't want to see $150m+ of dilutive equity raises just to get to DFS, whether they are at 25p or 30p they will still be dilutive.
Because its time to put a floor under the market, which they've failed to do for years...
So the amount raised needs to be enough to assuage the market and believe that it is a bottom. I believe that can be done at 20p...
If you do it in bits and bobs we'll be back here again within months...
Its called 'kitchen sinking'...
I'm sure Ayten understands Oz capital markets, but she's only just arrived and is willing to listen and learn...
I worry that the rest of the Brisbane Board don't understand LONDON Capital Markets where the primary listing is.
Ingo certainly di but he's gone.
If Darryl is driving this game it won't end well unless of course there's a bid...
Totally agree RCGL2, but what if the big two investors said to you... do another Franco or Boliden etc and we'll take you out at AGM or possibly before and you won't get a chance to deliver PFS2 or Porvenir PEA. We'll make a bid and it will be low ball.
This is biggest issue. The big two want a dilutive equity raise and they want to force SOLG to do it at a low price. They hold a gun to their head on both issues as SOLG are desperate to gain another 12months so they can generate more value across the folio not to mention derisking ENSA.
It's clear that this was the big issue last time around and nothing has changed apart from the fact that they supposedly have CGP on board this time around.