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I've just re-listened to the Solg Investor call again from this week, and if you listen with the view that a deal for Cascabel / Solg is very well progressed - an awful lot starts to make sense in the narrative from various contributors. This may just be me being naive, but I cannot help but think a deal could land sooner than we think? ATB, C.
HFM ….. same
HFM, I agree and DC virtually said as much.
The question is, why announce the deal with CGP? Indeed, why do it at all? My take is as follows.
If an interested party is in discussions with us, clearly the issue of CGP would need to be addressed. If they only wanted to buy ENSA, they could come to arrangement with CGP to sell their SOLG shares and to give up their 15%. We would simultaneously drop the various contractual obligations associated with the agreement. In essence, this gives the buyer a clean entity of which it owns 100%. It would be relatively simple and not particularly expensive.
However, if the interested party wanted to buy all of SOLG as well as needing the CGP stake, it would in effect, have to conduct two takeover deals - of us and CGP. This would be more complex costly and could run the risk of CGP shareholders saying no thanks (unlikely, but possible).
Therefore, we're conducting that part of the process on behalf of the bidder and are making it a much simpler, less costly and cleaner transaction.
My brain is pretty muddled at the moment - thanks covid - and I may be barking up the wrong tree completely, or I may not have expressed my thinking clearly. Actually, I've just thought of a couple of holes in my thinking, but what do you lot think?
Good morning addicknt, hope you are on the mend.
If they want to buy ENSA, Cascabel, Alpala.
I agree it just got easier as they now only have to deal with us.
If we want to take Alpala to production then it just got easier as lenders only have to deal with us.
If someone wants to buy Solgold, then it just got harder as the book is more diverse and they have to deal with many parties all of whom want top dollar.
And nothing ever happens, nothing happens at all
The needle returns to the start of the song
And we all sing along like before
I'm a relatively new investor here ( since 2020 ), and I accept your cynicism based on my experience, however I cannot help but think this time will be different.
@addicknt - I agree with all the points you reference, thanks for your input.
Time will tell.... Have a great week all. C
Q, I've only just seen your reply to my post of yesterday morning.
Yes, I agree that the merger makes the task of raising funds easier, including the interim funding we currently require. However, let me ask you a question: Do you believe CGP has agreed to this deal in order to take this to production? Given everything they've said in the past and the agreement they signed up to with us, do you think they've had some kind of Damascene conversion?
Good morning addicknt, in order to answer that, I don't think they mind.
If this goes to production, gets sold or JV.
Then the point is they have shares with a lot of upside and they now have nothing to contribute.
I believe that was the main driver.
They no longer need to find a lot of money.
Q, they had always appeared to be blissfully relaxed about the cash required and said so on a few occasions. (personally, I think their optimism was wildly misplaced)
However, I disagree that they don't care which way this goes...I think they care a great deal.
To my mind, they know exactly what's on the table and I'd suggest it meets their requirement for the realization of shareholder value - I can think of no other plausible reason for them signing-up to the merger.
But who knows? I may be way off kilter.
Hi Quady. It seems from your posts that you think a sale of Cascabel is possible whereas a sale of the whole company isn't likely. Yesterday you said "If they want to buy ENSA, Cascabel, Alpala. I agree it just got easier as they now only have to deal with us.... If someone wants to buy Solgold, then it just got harder as the book is more diverse and they have to deal with many parties all of whom want top dollar."
Given that Solg is valued almost entirely on Cascabel why do you think a buyer would be willing to pay top dollar for Cascabel but wouldn't pay top dollar for Solg itself? Or indeed why we and all the other shareholders demand top dollar for the whole of Solg but not for Cascabel?
I know Solg has a large portfolio but realistically only Cascabel is anywhere near close to the end of the studies stage. If someone was offering an amount equivalent to 80p a share for Cascabel would shareholders accept that but not accept 80p for their Solg shares? I assume most would rather bank 80p than maybe receive part of 80p and then see the rest spent on exploration which may or may not lead to a result in many years time.
Afternoon rcgl2
I think the problem is the main shareholders would want to develop other tenements. Porvenir comes to mind, and so may not be willing to sell the rest of the properties for the price of Cascabel.
Also the company that could buy Alpala wouldn't want to do exploration.
Why take the risk, just buy the proven up sites and don't bother with the uneconomical to bring to fruition.
Not saying we do sell Alpala, but I can see it as a possibility now.
IMHO there is no way Bob agreed to a deal if he believes a large capital raise is coming or funding will be taken to develop this. Why do I believe this? Because CS will own around 20% of the PF entity. If there is a large dilution coming they will on <20% as they do not have the money to invest. So, they could have just waited for 3-9 months. Get the dilution out of the way for existing SOLG shareholders and then own 20% of the "fully" funded/ capital issues solved SOLG entity. I.e. I strongly believe they think a full sale or large investors into Cascabel is likely. Otherwise you would just wait.
" I strongly believe they think a full sale or large investors into Cascabel is likely."
EXACTLY. Irwin certainly does, and we know he is representative of CGP in many ways.
Only an idiot at this stage could believe that we are going into production. It's not what we were, and it's not what we are going to be.
Cascabel is up for sale, period.
So why are we sat still at 16p?
OC because there is still capital to be raised short term.
For the first time I've decided to switch my position to long here and will hold my full position.
OC just to clarify I mean the sale of the 157m shares and not a public capital raise. Also, we do not know the nature of the strategic investor. The reason why it is still here is that there are various ways how this is not sold immediately. we can see the metaphorical two birds in the bush but maybe they are not as beautiful as we think.
Orthern, I think despite the chances of SOLG being bought out soon increasingly substantially over the last fortnight, our funding situation remains as it was. I am hoping that CGP are able to place their shares with an investor, or several investors, at a premium to today's price, particularly if they are as confident as they seem to be that they will see a return on their investment sooner rather than later.
With that cash loaned back to SOLG, and with the merger completing later this year, I would hope that the takeover rumours (e.g. Mitui entering the mix) would then start to be factored in to the share price too as FOMO kicks in and investors are reassured that they are punting a company that is fully cashed up.
OC also last comment on this. I believe in inefficient market theory. In my view the share price should be already higher. This price is at an interesting level. Everyone should obviously assess it for themselves.
Everyone moans at Quady for being rude but I see him get abused himself so much on here.
Everyone thinks the for-sale sign is up and we will be sold very soon( god I hope you're all right) but where the share price is it looks like no one outside this message board feels the same or at least they're not showing that intention because no one is buying.
I have been a shareholder here for about 2 years now and in that time not one have you has called anything correct but yet you feel it's fine to call Quady an idiot for what he believes will happen. To me it seems like most on here are the idiots and just want to see what you desperately want to happen.
I literally have no idea and want you all to be right and Quady wrong but from past reading I'm not too confident in you lot :)
1 share trade.
RNS incoming.
Strange how there's always a fairly large sell at the end of every day that brings the price back down.
What is this 1 share trade background seanhunter?
"just want to see what you desperately want to happen"
Spot on.
It has struck me for ages that certain people's entrenched position means that anyone debating against is somehow an enemy to be challenged at every chance.
It does the board a massive disservice, imo.
We all know what the company is currently sitting on and we all want the same thing.
1 trade means sweet F.A - newbies wishful thinking..