Firering Strategic Minerals: From explorer to producer. Watch the video here.
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Just wondering what will be required and when this will turn? We have seen sp fall with relatively good news in the past.
Scary that precious metals seem out of favour at the moment. Both gold and silver may reach rock bottom prices and US Dollar remains incredibly strong.
Eish - when the company secures finance.
As things stand we're edging towards insolvency and a breakthrough is needed in the apparent stalemate between our major shareholders.
Come on SOLG. Get it done.
Thanks Bozi, that does make the most sense and hope one way or another they get it done.
Just not an equity raise to dilute us further. Would prefer other options. Wonder if a threatening streaming deal behind the curtains is causing a major problem here for us?
Eish - I'm not sure why so much apprehension about an equity raise. I it's part and parcel of investing in a non-revenue generating resource junior.
Don't get me wrong, the share price and market conditions now aren't conducive to a fair deal for existing shareholders, but you would get the opportunity to maintain your % stake.
SeanHunter has been guilty of saying that dilution is the devil. Take no notice of that claptrap. Dilution is a necessity for a company in our position.
Besides, if SOLG went out and did another streaming deal, any bidder would take that finance into account when making an offer for the company because they have to pay that debt back, so it only ends up being dilution to your equity, albeit in a slightly different way.
The upside story is clear - see my post from yesterday - and the most important thing here and now is for SOLG to secure themselves enough cash to get through to DFS.
Bozi,
"but you would get the opportunity to maintain your % stake"... I think that's a valid point but doesn't apply to all shareholders and suits the ones with deep pockets or who sold out weeks ago in expectation of an equity raise.
The royalty deal / stream is the best way forwards when looking to raise $100m or more. Who cares what a major does in the future if we have an offer of 75p or 100p a share?? Yes the royalty might be taken into account but you're talking nothing more than 5p or so. Would I prefer $100m raised at 18p vs nothing raised and a stream deal of $100m but instead of a bid offer of 80p, we get 75p?? Ermmm... that's a no brainer.
What you fail to explain is what the effect of the $100m equity dilution would have on all shareholders? Say you 2.2bln shares in issue and the offer is 2.2bln... that's £1 per share. Now say we do 15% dilution at 18p raising around $100m... shares in issue jumps to over 2.5bln. If offer comes in at £2.2bln then that's 88p.
So that's why dilution is the devil!!! And that's why Mather and others want to avoid it. The royalty deal suits the little guy and not the majors. That's the point and the reason we are currently in limbo or discussions about finance structures.
I feel an rns coming by shortly.
Fort-it applies to virtually everyone. Everyone would get the opportunity, either via a raise, open offer and through the open market to top up their stake.
Now granted, some may not want to or may not be able to. That's the individuals decision.
I'm amused that you consider the streams to be worth "about 5p" but then go and calculate the precise impact of equity dilution.
If we did $100m in a stream this month then we'd have a balance of $200m plus accrued costs to date. Add the costs of early repayment, which Franco ensured would be meaty. You'd be looking at somewhere in the region of $250-300m to get out of two streaming deals.
So, subtract that off your notional offer amount of $2.2bn and what do you get? About 90p.
Then there's the added issue of what the two deals would do to the bank-ability of the project. Having $300m of debt on the balance sheet won't be a good look when we need to secure $2.5bn more. Every streaming deal backs us further into the corner of either
a) being reliant on a change of control
b) reliant on our basket of prices being higher than our current base case assumptions to preserve robust economics.
I was thinking while I was away, that a modest 'placing' could do the trick...
Say another $10 million to Valuestone...they paid over the odds last time...or Norge....they were buying at 32p...
This would get us another 3 months, i.e. close to Easter and maybe into calmer stock market waters when a raise could b e done at a significantly higher price...
But right now, I suspect that if BHP offered NCM, Norge, and Blackrock 75p they would bite their hand off...
Then it would simply come down to whether there was a countered by someone with large cojones, such as Jinxiang, with the final price paid by a global major such as BHP, Blackrock, Glencore, of say £125p...
Thank you for making the points on streaming Bozi. Your example is I find a good representation.
However it may well be included in the fund raise for construction of Alpala, along with loans and some dilution. I am beginning to see a second cashbox to get us to DFS. I don't think NCM and BHP has any choice apart from to participate.
That beggars the question.
At what price ?
Quite possible to get a cashbox above the current share price. Let's see what happens.
Red, Surely doing another modest 10-20 million raise, only gets us a few months down the road with absolutely no exploration done anywhere?
Within a month the market would just pull us back down to the teens, knowing we would be back scrabbling around for funding ideas in a matter of weeks..
10 to 20 million eases the short term cash worries and gets us through the AGM...if we get that far...
If it goes ahead you could be left with just MAA and EG on the Board and then watch the vultures fight over our corpse at 50, 75, 100 or even 125...
And remember we've still got Porvenir and PFS2 to come...must be soon...
You can't take short term share prices as a basis for a sudden 'bite your hand off' attitude. That's nonsense. Look at Rio and turquoise hill. Shareholders didn't bite their hand off and their share price was at multi year lows. Rio then came back and upped the offer and shareholders still seem reluctant. Same could be said of Oz Minerals.
I think some on here forget that we have a monster size resource folio with Tier 1 project status. Ironically, NCM were calling Fruita Norte 'tier 1' when they did a stream finance deal. Compare that mine to Alpala and see what you get.
Unfortunately markets are markets and the share price reflects the markets view not the asset values. The latter only really catches up in full when a bid or offer arrives. Until then it's as discounted as the market pleases. Share prices go up and down and all over the place but they usually arrive at proper market value when the hammer falls or ink is dry. If Darryl or SOLG did a large equity raise now at 18p levels I think they'd be guaranteed to see their P45's come Dec AGM. They may as well hoist the for sale sign and book their nice options. SOLG have been flip flapping around buying time or stringing out time for the last 3 years and in that period they have eventually delivered PFS and a share price that is at multi lows!! What's to say that they don't arrive at DFS and are at even lower multi lows?? The point is... there comes a point whereby you have taken a project fair enough. Then you seek a strategic deep pocketed partner or an asset sale and rinse and repeat.
We've lost a completed year when not comes to exploration which is a huge shame. We might have found some huge holes with resources greater than Alpala hole 5 etc by now. And that would have only costs a small raise of $30m back in April.
I think the Porv and PFS update must be what Solg are hoping to change our sentiment…. And I’d like to think it’s common sense to get those out before doing any raise at todays depressed price. But my faith in the board is extremely low.
Looks like we are all just crossing our fingers and hoping. Something has to give soon
If you take out the COVID BLIP we pretty much touched a 6 year low today since the time of NCM's first major foray into SOLG helped propel the SP from 6p to 46p in 9 months...
Orthern, conversely, do we not run the risk of the market ignoring those updates, knowing that a fundraise is imminent?
‘ The point is... there comes a point whereby you have taken a project fair enough. Then you seek a strategic deep pocketed partner or an asset sale and rinse and repeat.’
I totally agree here… I’d even add there comes a point ( or should come a point) where you realise it’s now just too big for little Solgold, and you just need to get it monetised with someone with much deeper pockets and more firepower to move it forward.. and that has to be in the interests of shareholders…
https://www.kitco.com/news/2022-09-01/-As-cheap-as-I-ve-ever-seen-them-Rick-Rule-on-beaten-up-resource-stocks.html
"The beaten up precious metal space has compelling valuation, said Rule.
Gold stocks relative to their net present value at current gold prices are as cheap as I've ever seen them in my career."
Sharket yes absolutely, as I believe the market has zero faith in our ability to deliver it.
Get the PFS update out ASAP and announce at the same time a strategic review for Joint ventures to expedite to production…
Remember Darryl was issued with 4 million options at 29.2p; 3 million at 35p; and 3 million at 50p on 5 July when the SP was 25.5p having been 35p only a fortnight earlier...
These options are now underwater by a total of almost £2 million...oh dearie me...
Red do you know if he exercised any of them, I doubt it?!
Too early Woody...
Meanwhile bought another 106453 at 18.32p...
Now back up to a collective 1.1 million...
Last two times we bought at 18p or so the SP doubled...
Here's hoping...
"Now back up to a collective 1.1 million..."
Shame I don't share your enthusiasm otherwise I'd have a few million here myself. Just here for a trade.
Gl
RK, if the few instos that are here thought there was a fund raising imminent, they would be sellers of their stock, looking to pick it back up in the placing. Happens all the time, as I expect you know.