Member Info for 2Luke

Don't be silly, CGP has a far smaller mkt cap than SOLG.

Find out what Turquoise Hill Resources used to be called before it got renamed. Check out the share price of Turquiose Hill Resources since expectations of a takeover by Rio were sky high in 2010/2011 and where it has gone since. Tell me that was a happy outcome for shareholders? It was not for lack of trying by that a big personality to keep Rio at bay with standstill agreements, poison pills etc. I want a good outcome for Solgold of course, I am very heavily invested but you’d be a fool for thinking it’s in the bag. I’m a huge NM supporter, and have been for a long time, can’t help being worried now that the stakes are so high for everyone. Predators are certainly not going to act in the interests of shareholders, and I appreciate NM’s efforts to protect us from a cheap takeover, but the risks are huge.

Look also at what happened to the shareholders of Turquoise Hill resources before assuming all possible outcomes for Solgold are positive.

Speaking with Mining Journal at Diggers & Dealers at Kalgoorlie, Western Australia, SolGold CEO Nick Mather said the company was waiting on permits to start drilling at Blanca, where rock chip sampling in and around about 120 artisanal workings concentrated in a 400m-by-200m area on the Cielito Vein has reportedly shown "bonanza style epithermal gold mineralisation" with copper.

He couldn't put a schedule on the drilling at this stage, but said he was itching to get rigs active at Blanca, about 5km north of the Alpala deposit at Cascabel, and at the Porvenir porphyry copper-gold target in Ecuador's south.

"Having over the last four years developed a blueprint for the discovery recognition of the zonations and mineralising patterns at Alpala, and a blueprint for efficient appraisal of them, for which our exploration team has been gonged a few times, we can now apply that blueprint to these other targets in Ecuador, and Porvenir is the best looking of the lot of them," Mather said.

"Porvenir outcrops over a much, much bigger area than Alpala. So it's way better exposed - the drilling targets are sticking out of the ground. You can see them very easily.

"We've selected our drilling locations and started drill pad construction.

"I can't be specific about a start date but it is getting closer and closer."

Neither Blanca nor Porvenir have been previously drilled.

London-listed SolGold (SOLG) reported this week its structural mapping at Blanca confirmed "potential for multiple stacked flat-lying high-grade epithermal veins" from at least 118 artisanal mining tunnels in the 400m-by-200m Cielito area. It had also retrieved bonanza-grade gold rock chip samples from a "newly identified area of shallow artisanal workings … on the opposite ridge to the Cielito Vein", about 380m to the south-east, which was "thought to be part of the same system".

Mather said SolGold, Ecuador's biggest active mineral explorer with more than a dozen rigs currently turning at Cascabel sites, was selecting drill sites at Blanca.

"The thing that attracts us to it geologically is the underground artisanal mine workings that have been mapped on very high-grade epithermal gold veins that go up to over 600gpt. They're generally anywhere between 10cm and 2m wide with variable grades, but we do have a 200m-by-400m wide zone of concentrated artisanal workings on these veins.

"And inside that area we can see potential for a multi-million-ounce, very high-grade gold resource.

"That is just the sort of thing that is highly financeable, easily mineable, with gold easily recoverable, that could provide a huge boost to the first phase of SolGold's share of development costs at Cascabel.

"We're looking at Blanca very much as something that can bootstrap SolGold into covering costs of development at Cascabel for very low relative capital costs. Layer that over the already outstanding economics that we can see for Cascabel and there might not be an ultimate requirement for very much external funding at all to turn SolGold from explorer to producer.

"If we were to find anything that's mineable there we would have to integrate it into the Cascabel project and there'd be a number of discussions and studies we'd have to do to be able to do that.

"Grade is king in this business, and when you've got something like Blanca that has got some extraordinarily high gold grades on it only 8km from your main project, that itself has a less than four-year payback, 27% IRR and $4 billion NPV, for only $2.4-2.8 billion [upfront development] capital, then something like Blanca can conceivably provide a substantial amount of that capital requirement to get Cascabel going.

"So Blanca shapes as an early stage financing tool."

Mather said 100%-owned Porvenir had also yielded strong results from rock saw sampling along a zone of outcropping quartz veins, chalcopyrite, bornite and magnetite mineralised rock displaying similar characteristics to Alpala, but over a "much, much bigger outcrop" area along a creek called Cacharposa.

"The outcrop at Alpala was only 50m long in the Alpala Creek," Mather said.

"That's why we put the first drill hole there, and that was literally the tip of an iceberg."

At Porvenir SolGold had taken hand samples from rock saw channels in a continuous trench along the main identified outcrop over 114m, and Mather said there are "a number of [other] outcrops that extend over a zone in excess of 1km long and 800m wide".

"I can't tell you whether they all join up or not, but it is part of one whole mineralising system.

"We're itching to get drill rigs on to this because we can see the thing - the mineralisation over three dimensions - and it's very exciting from that point of view.

"We believe that Porvenir will be the second of SolGold's porphyry discoveries. It's bigger, it looks richer, it's 100% owned and I believe we will be able to get onto it rapidly and much more quickly bring it up to the same level as Alpala is now.

"So we'll be starting to put meat on our claims that we have a pipeline that we can rapidly explore, appraise and get to development stages.

"When they're gold-rich, and have economics like Alpala, each successive one that we get to develop and get capital payback on simply doubles, triples, quadruples the amount of net free cash that we're going to bank every year. That will put SolGold, sometime in the next 5-15 years, into the ranks of being a global copper-gold producer, and a major."

Some dilution? Some?

This has been described on this board as safe haven share to own!

Rio did not have to break a stand still agreement to snatch Oyu Tolgoi from Robert Friedland and the other Ivanhoe shareholders without paying a premium at all. They merely waited for the agreement to expire.

Reasoned argument there Grim. I just wish it will be resolved soon so that things can move along.

That’s how corporate stoushes go, they get ugly. NM has control, of course WI has to fight dirty and public. WI’s ego isn’t so big though that he would cut off his nose to spite his face from an investment perspective. People who take that kind of emotion into investing, and a lot of people do, could not possibly enjoy the kind of sustained success he has had. He just wants his idea of the best possible outcome for his investment, and if it involves eating humble pie, I’m sure he’ll do it. I am a big NM supporter, but unlike a lot of people here, I consider my Solg investment very far from risk-free (yes, that’s exactly how somebody described it here) and would actually be quite happy to pass that risk to someone else in exchange for a lower premium.

He was the hottest thing here when people first heard he was in solgold. So was the angry geologist when he was saying nothing but nice things about Cascabel. A lot of people cannot tolerate contrary opinions in investing because it is psychologically very uncomfortable. Which is ironic because contrary opinions is what everyone should be looking out for. What exactly is Warren Irwin’s problem with NM? And why do those of you on NM’s side disagree?

Why the assumption that it must be BHP versus Newcrest in outbidding each other for the company? Or another company like Rio swooping in to make everyone mega rich. There are many possible outcomes, and not all of them are necessarily good for SOLG shareholders at all. Check out the story behind the Rio and Turquoise Hill Resources (formerly known as Ivanhoe Mines) and see what happened with shareholder expectations of a huge big offer from the 'big boys'.

The trick is not finding reasons to invest in any company, that is really easy. Almost any company presentation will certainly do. The really difficult part lies in finding arguments against these reasons, and arriving at the right conclusions. Otherwise, it is nothing more than luck, and the one thing certain at this end of the market is that all too often luck gets mistaken for skill.

More for you fanboys always on the lookout for positive news that you will no doubt turn into fact by sheer repetition:

The time is ripe for Rio Tinto to use its soaring share price and strong balance sheet to make a major acquisition in copper, according to boutique fund manager Tribeca Investment Partners.?Tribeca portfolio manager Ben Cleary said Rio should consider coming in over the top of BHP and Newcrest and buy SolGold and its copper assets in Ecuador. "This is one we have been watching and we think the asset is better off in Rio's hands," he said.

Mr Cleary said a potential $1.5 billion tilt at SolGold looked like at obvious option for Rio."It is a massive block cave operation, 400,000 tonnes of copper production for the next 40 years, and we think Rio is the best underground block cave miner," he said...........?

.........Mr Cleary said Rio's iron ore division had put it in a strong position and that position would become even stronger following Vale's production problems."Rio have the best iron ore assets in the world, they benefited from solid pricing last year and sensation pricing so far this year on the back of the Vale issues," he said."It would not surprise shareholders who have been listening to Rio Tinto to see a big acquisition. Both Rio and BHP are seemingly in love with copper and it is a commodity with a structural long term shortage."?

BHP, (ASX, LON, NYSE: BHP) the world's number one miner, today made an exceptionally rare public disclosure of drilling results from a very early-stage exploration program in South Australia, which is already being called by some experts “the thickest high-grade copper intersection seen in years.”

The mining giant identified an iron oxide, copper, gold (IOCG) mineralized system located 65 km southeast of Australia’s largest reserve of copper and uranium ore, its Olympic Dam operations.

As part of the company’s ongoing copper exploration program, four diamond drill holes, totalling 5,346 m, intersected graded 3.04% copper, 0.59 grams per tonne gold, 346 parts per million uranium and 6.03g/t silver.

Within the 425.7 metre-intersection BHP detected a higher-grade 180m interval comprising 6.07% copper, 0.92g/t gold and 401ppm and 12.77g/t silver.

Other significant results were 406m at 0.66% copper, 0.35g/t gold, 266ppm uranium and 2.09g/t silver, and 124.5m at 0.52% copper, 0.48g/t gold, 85ppm uranium and 3.37g/t silver.

Continued.... milling we have to do will be helped along by nice cheap hydro power that comes from a big grid only 30km to the east, from a capex point of view, we don't have to build a port, a sealed highway, a desalination plant, power station, pipeline and powerline. It's all there.

The capex here is around about half of what it might have been if we were developing up on the Altiplano in northern Chile. On top of that, it's got a lot of gold in it, and on top of that it's got high-grade core. That core will enable us to get this going with relatively low capex.

MJ: You've previously said you could build it yourself - does increasing the scale mean you need some help?

NM: No, it just means we'll need to have a bit more financing for the mine development.

We'll never, ever be JV'd.

To come back to my original mantra about doing this for shareholders, I'm a shareholder, heavily invested in it, most geologists only get an opportunity to work on one project like this in their careers. We've got an opportunity to work on 12 of them. There's no geological reasons why the other 11 can't be as good as the first one. I think you'll find privately that's one of the things that interest BHP. That's an entirely speculative view, but if I was them that's what I would do. Dealing with BHP was a pleasure. It took three weeks from the first phone call.

MJ: Did they have a better understanding of how you operated, compared to 2016?

NM: Yes, and the way they do business has radically changed.

MJ: So their capital allocation plan released this week, with earlier stage, potentially higher-risk investment, was quite familiar to you?

NM: Yep. They understand what porphyry systems are, they understand how recognisable they when you first drill into them. We've got 70 drill holes that all have between 500 and 1500m of intersection and it covers a big footprint. You can muck around the edges about what it's going to deliver. But they know what it's going to deliver.

Continued.... be able to relocate some of those rigs to Blanca, and still use the Rocafuerte base for that. We're also relocating some of them down to La Hueca? And our driller's main base is at Hueca, so those projects down there are even closer. He's also a shareholder in the company, he has 38 million shares.

We've got as many rigs as we've got prospects, and again, that's a tremendous competitive advantage. When all these other companies get these reconnaissance drill permits, I don't know what they're going to be drilling with. It won't be our rigs. [Driller] Lance Hubbard's got 38 million reasons why he wants to look after us.

MJ: Speaking of the neighbours, do you feel a bit claustrophobic surrounded by Hancock and BHP?

NM: No, the way we've designed the surface footprint is entirely contained within the tenement. We can't see much room for porphyry mineralisation outside of where we are. That's not to say there won't be anything in the ground.

MJ: Has Ecuador's auction system made it hard for you to go for new plots?

NM: That is frustrating, and it means our IP gets leaked to the world. Mercifully we got a good head start on everybody. There are lots of other companies like Hancock and Codelco and so on applying nearology and applying around us. We think we've had the best technical basis for the selection of our project areas and we have demonstrated in spades to the government that we will do and are doing what we say we will do. Everyone else has got a long way to catch up.

MJ: Looking at the Alpala deposit, have you learned much new about it this year or has it mainly been about turning that inferred resource into indicated?

NM: We have learned a lot new about it. Particularly about the way it's trending at depth. It's still got a high-grade core at Alpala north west and Trovinio, and that's sort of plunging down to the north west. We've understood the metal zonations a lot better than we did a year ago, and that's helping us understand more about the targeting, not just within the Cascabel tenement, but within Ecuador generally. That will mean the $1.41 per ounce and 0.34c per pound [exploration costs] will be improved upon, we will find the next one faster, cheaper and more efficiently, with less disturbance than we did at Alpala.

MJ: Any surprises coming in the PEA based on the current understanding of how the project would look?

NM: Yeah, it's going to be bigger than we thought. The high-grade core has doubled, it's still got more to go. That dictates that we probably want to be looking at making the project bigger rather than smaller. It's definitely going to be an underground operation, and as much block caving as possible from an operational point of view, because any time you can use gravity as your mining technique, your crushing technique and part of your milling technique, because the stuff autogenously mills in the cave as it falls down. That's great for your opex. The little bit of crushing and

Mining Journal: Do you think you're getting taken a lot more seriously with the new MRE?

Nick Mather: Yes, it's interesting to note that companies like Newcrest, BHP, undoubtedly others we don't know about, will have have been modelling the results up every time we put them out and they probably had a fair idea what the resource was going to be like well before it came out. I rather suspect that is why BHP decided to move when they did.

Importantly the high-grade part of the orebody ... shows the project is indeed very valuable and as the PEA nears completion sometime in Q1 of 2019, I think the efficiencies of scale, the high-grade core, and the spectre of a copper squeeze will deliver some impressive economics.

MJ: You've joined the tier one category with this resource. Looking at the other projects in the category, the big one that sticks out is Kamoa-Kakula. Did you learn something by looking at how Robert Friedland sold off half of it for $400 million?

NM: We learned that it's not a good idea. All day every day we're interested in wealth creation for our shareholders and not anybody else. The only risk to development in Ecuador on such well-known orebody styles like a massive high-grade copper-gold porphyry would be the sovereign risks. That's something that's being handled sensitively and constructively by the government, and that is obviously encouraging some of the world's largest developers and miners, and they're beating a path to Ecuador's hills.

The 23.2 million ounces and 10.9 million tonnes of copper that we've found equates to 85Moz equivalent of gold or 34 billion pounds equivalent of copper, with discovery costs of $1.41 for the gold equivalent or 0.3c per pound for the copper equivalent. Do I want to sell that sort of upside for $400 million? No.

And, importantly, we're still educating the financial markets and the investing community about the difference between SolGold and any other junior out there. Other juniors out there are developing a project, if they're lucky enough to have one. We're not doing that, we're developing a province. It's 750km long, it's got four belts in it, it's an underexplored section of the world's richest copper belt province, the Andean copper belt. When we drilled into Alpala in 2012, we asked ourselves the question, 'how likely is it the first one is the only one or the best one'. The answer to that is it's not likely at all.

One hundred per cent of [our 11 other targets] have spectacular looking outcrops - 600g/t maximum surface grade at Blanca, 8km from Alpala. That's got potential to deliver $1-2 billion worth of surplus to improve the front end of the Alpala development.

MJ: Where are you going to find a drill rig to spare, if you're running 10,000m a month at Alpala?

NM: There's probably 10-20% left to find at Alpala. The size and configuration of the orebody is pretty well understood now, from a preliminary economic analysis and prefeasibility ore review. We will

Explain why you're target is £1. In detailed technical terms and not easy-to-believe soundbites. Like Alpala is getting bigger every day.