Member Info for Bozi

Sire - he knows full well what fair value is, but IMO he's not as bothered as the rest of us about reaching it.

He'll profess to holding plenty of SOLG shares, and post merger he certainly will. The difference is, he'll be happier to take a smaller profit as long as it means quickly compounding the premium he's receiving on his CGP stock.

My evidence of this is his slightly disparaging comment on Twitter yesterday towards DC when someone put it to him that a comparable value of Cascabel on known resource value is 78p/Solg share. Warren made it quite clear that price point was out of reach.

This is another reason why I wanted to float the spin out in more detail yesterday. I'm grateful for all opinions shared on that.

On a different topic and not in direct response to you Sire, my view generally is that those who lose out the most here (relatively) will be the folks who averaged up on SOLG between 2017-2020 as the NCM and BHP stakes became part of the story.

Those folks will now find it difficult psychologically to average back down given the less positive sentiment of recent months, and whilst I am not giving advice, adding a small parcel or two down here is certainly one option to those who were buying steadily in the 30s and 40s, particularly if bullish about the strategic review providing value creating options.

I contribute to this board because I do have experience that I think others could find useful in terms of them collecting information and opinion. I've no desire to tell anyone what to do. We're all here to bounce opinions off each other and maximise our return from this stock. That's all really.

DBW - how can you IPO after a takeover? Why would another company buy SOLG to then push it back onto a stock market?

Your post causes much confusion. I

I'm starting to doubt whether what i am suggesting is actually understood.

18:10 - of course there's cost to the company but it's not as significant as you're alluding to.

It most certainly is a free roll of the dice to us as investors. We'd be given shares in NewCo pro rata for our SOLG and would then all have the choice to fund NewCo further with no obligation to participate.

As I've said, SolGold would still be sold and probably early on in the process so no need to replenish the BoD. A smaller BoD would be appointed for NewCo. That could hsve incljded folks like Ingo but he now appears to be back in position. But you'd ideally appoint a CEO, FD, a couple of NEDs and build out from there as NewCo is brought to market. It does not happen overnight but it's not insurmountable by any means, and you know full well.

Not all IPOs cost £14m and take 18 months. I'd like to suggest it was particulsrly complex or not done cost efficiently. Take PwCs costs calculator for example - https://www.pwc.com/us/en/services/consulting/deals/library/cost-of-an-ipo.html - they say 7% of deals between $25-99m. So for a NewCo valued at £20m and raising another £20m in cash you're looking at 7% of £40m. Call it 10% all in - £4m.

OK Red, here goes:

17:30

"And even in the UK: Assets can be transferred between two separate limited companies but it should be noted that Capital Gains Tax (CGT) will be payable by the recipient company if the assets are transferred free of charge or below the fair market price."

The key word here is separate. With my proposed SOLG spin off, SolGold isn't separate from NewCo, a holdings company under the SolGold group. Also, as i mentioned earlier, there is no transfer - just a change in company structure that brings the 4 subsidiaries under a new limited company that is then distributed via corporate action.

18:06

You are being awkward. You have done nothing all day but refute every point i have made, despite others on the board acknowledging the validity and viability of them. Are you going to say they aren't qualified to comment too?

You're crowing about tax when the worst case liability would be nominal relative to the growth prospects of NewCo, particularly if IPO'd in the £20-30m range. I'm still to review the acfual position and will come back to you over the weekend on that.

I hsve summarised your key points. To repeat, I'm saying:

1. You're relying on a competitive bidding war type scenario to extract the top of your range from a full sale of SOLG, frantically chucking Noront up as the case we must all cling to, taking no notice of the clear manouevre from BHP to bid Wyloo up.

2. You have refused to acknowledge any of the benefits of the spin off on account that it either doesn't suit your own affairs or is a 'gamble' for SOLGs major holders, etc etc.

I have provided thorough comme tary that dispels both points. I have not "shrugged my shoulders".

The decks have probably been cleared to facilitate a takeover but that doesn't mean it's the correct action. I'm also not saying what i thi k will happen. I'm asking SOLG and it's investors to strongly explore a spin-off as prescribed.

It likely won't happen, we'll sell for 40-60p and then I and others who favour a spin-off will watch aghast while the buyer uncovers a mega tier1 on our regional ground.

There's a few of us that don't want to miss out on this potential upside as there's a rapidly declining number of under-explored countries left and Ecuador is one.

Red - I do have experience. Relevant current experience. You have historic experience as we've all been reminded for the hundredth time.

As I've said two or three times this afternoon, there is no transfer between limited companies. A demerger will be achievable by adjusting the SolGold corporate structure.

I'll ask you again. Please can you show me some Ecuadorian legislation to substantiate your statements? I also implore you once again to review the Atlantic Lithium transaction.

Besides, why are you getting so hung up about tax. Are you endorsing not taking a value accretive path because there may be a possible tax liability. How ridiculous.

Your ISA issue is admittedly more of a sticking point for you personally.

Shareholders aren't taking a gamble on an unlisted stock. They're early investors in a company that would be brought to market with a respectable porphyry discovery.

Look Red, we won't agree, but thanks for the discussion.

Orthern - that's fine.

All I'm trying to say is that the difference between a full SOLG sale and a sale of just Cascabel will likely be negligible, so spinning the regionals out is effectively another free roll of the dice with very little risk.

It shouldn't harm the return we get from Cascabel in theory at least.

You're entitled to your view of course. I just must disagree with it.

Orthern

If the regional assets stay in SOLG and SOLG is sold whole then they carry no value unless an auction happens and things get tasty.

You yourself appear to not like the chances of this and I'm along your line of thinking.

If they get spun out I think you could IPO the company for £20-30m, probably next summer. Small change. It would like a new explorer being born in the junior markets with a mature cow being carted off to the slaughterhouse, to excuse the anomaly.

The value then grows as NewCo PEAs and PFS' Porvenir and more so if they make a new significant discovery at Helipuerto or the likes of.

Then depending on how things are looking, you can then spin the regionals out again and just sell a mature Porvenir, or you can explore developing Porvenir, obviously with the same arguments taking place that we've had about SOLG.

Porvenir will hopefully be a friendlier asset to develop though given it is from surface.

Just one last point. Look at Solaris. Worth considering why they have done the very same thing with Warintza. Why?

Because it's the best way to value creation. That's right Red.

...

OldCo, to repeat myself, brings the likes of Mitsui to the table who are said to be interested in Cascabel only. That adds further competitive tension.

I'm going to close it there because nothing I say will get through. You'll just continue with your straw man arguments, and it's painful because they hold no water at all.

Red,

Wow, what can I say. You don't think my idea maximises monetisation but yours does? That is really some strange thinking. My idea does exactly that, whilst yours only achieves that if a bidding auction materialises, far from a certainty.

In terms of making tax laws up, where have I done that? I didn't really want to do this but here's the stuff about the CGT exemption - https://www.gov.uk/tax-sell-home

If SOLG slides a holdings company in above the 4 subsidiaries holding regional licences then no reorganisation needs to happen. There's essentially a carve up. SolGold stays as is with Cascabel, Blanca Nieves etc and the 4 subsidiaries move out under the NewCo, which gets renamed.

It has nothing to do with what the major shareholders would accept. BHP, Jiangxi and Co will get what they are given. You don't see Assore, Sumitomo and the other big Atlantic Lithium shareholders complaining about holding stock in Ricca Resources. Take it from me as an investor in that company-they're not.

You could even infer that one of the reasons the Porvenir PEA has been halted is to not confirm a value for that project ahead of a potential spin out, not that I believe it would matter for the reasons mentioned. Ownership of Porvenir wouldn't actually move from it's subsidiary (Green Rock is it off the top of my head), but Green Rock itself would move. You're just going to have to accept that the tax argument is a red herring you're using to try and talk down the option.

We haven't been trying to sell regional licences. We've been trying to find partners to help prospect them. Completely different. SolGold cannot sell licences that it has been awarded. They expire at the end of their term and SolGold can either re-apply or let them go back to the Cadastre for potential re-distribution.

"
Finally, on any disposal of assets (and selling a new company containing all the non Cascabel assets) would carry those assets with it; the transfer to the new company is treated as a disposal for tax purposes."

This just isn't true. Please substantiate this.

It doesn't delay anything. SolGold can still be marketed for sale now if that's what the objective is. SolGold can just run the demerger in parallel or early in 2023 if taking place after completion of the Cornerstone transaction. They can prepare the holding company now, like Ingo did with the financing company a couple of years ago. Its all straightforward and you know it.

Cont...

Do you know that for absolutely certain, Redknight?

I don't understand your motive here. You're arguing against something that just makes the most sense, all for a clean break on probably worse terms.

At the moment the 4 companies are subsidiaries of SOLG. Would you agree?

So all SOLG has to do is create a new company, in terms of organisational structure it sits between SolGold plc and the 4 subsidiaries. It is then this company that gets demerged from SOLG plc.

Also, let's not get onto the subject of how you tax something that doesn't carry a valuation, as is the case with all the regionals except Porvenir. Any % of £0 is £0.

Come on Redknight. You know this makes sense.

You still get your SOLG sale or purchase or however you want to frame it and you get a new vehicle to trade to your heart's content.

I've probably bored everyone silly today on this so will leave it there, but open your mind to something different to a bidding war that might never materialise.

And Redknight, just to clarify with you before you yield the filter button once again, you could transfer your house to me, assuming it was your primary residence, and pay no CGT.

Why, because your main residence is exempt from UK CGT.

Look that up, my friend.

Comparing your house to prospecting licences in Ecuador is frankly absurd Redknight.

Go and ask Atlantic Lithium, an example you've been happy to band about before on these boards, if they paid tax when they transferred their gold assets to Ricca Resources. The answer of course, is no.

If you want to show me some Ecuadorian tax legislation that confirms different I'll be happy to concede.

You do yourself no favours when you take this righteous, better than all, line. You can learn a thing or two and you should.

Still here smkr.

Patiently waiting.

Red,

What happens if SOLG gets a proposal that has to be put to shareholders before the merger completes?

CGP holders wouldn't be eligible.

Why would Bob and Maxit arrange to sell a company they are trying to switch into before that switch takes effect?

How can a transfer of licences at nil consideration be a disposal for tax purposes? I'm no expert on the Ecuadorian capital gains tax and don't have the time to delve right now but companies exchange licences all the time and don't have to pay tax.

With the spin out, Bob and Maxit remain incentivised to sell SOLG OldCo and they get another investment in NewCo to recover the premium given up by merging when they did.

I just think it's a very viable option that will clearly need a bit of finessing by SolGold. I just hope they're giving it due consideration.

We're not spinning Cascabel, Red. We're talking about spinning out the regionals.

It'll be a transfer. Not a disposal.

It works for all.

Red - it does suit CGP and the rest.

CGP get paid for selling SolGold if that happens like the rest of us and then they can sell their stock in NewCo once it lists if they don't want to roll the dice. It would be a headwind for the NewCo share price but a temporary one.

That's the beauty of it.

Red 12:54

With all due respect Red there is zero chance of this. Bob and Maxit are acting as adviser to SolGold in the strategic review.

They are not going to sell the company before their shares land.

Just think about it.

You're going down a rabbit hole Redknight.

My reference to full value is exactly as you explain. If someone wants to pay 50p for SOLG then just pay 45p for Cascabel and give all thoae who want a bid close to what is deemed to be full value.

The rest of the assets are then in a separate company to press on with.

Why should SolGold sell everything else, Porvenir included, for effectively that 5p implied value, when Lassonde's predictions could come to fruition?

The spin out protects us all by giving us future upside on further discovery and development. The same works if we're talking 90p and £1.

It won't be pleasant for us all still in the game if SolGold sells in full in the next few weeks and then Lassonde is vindicated any time from 2025 onwards.

If you're thinking of the takeover route then the merger would have to complete and then SOLG would maybe even have to consolidate on the one exchange (presumably London as Toronto would cause uproar).

Then you'd see a proposal.

So even the full bid isn't straightforward. The spin out in my opinion is no more complex than a straight sale. In fact, I'd say it's cleaner in certain respect.s.

There's more chance of finding some rocking horse poop than an offer being made for the company before the merger completes though?

Just think whether Sangha, Irwin, Caldwell and Co are going to stand for someone coming in for SOLG before the merger completes.

It's a non-starter.