Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
As I said yesterday, I am sure Solgold is having difficulty appointing a CEO. Think about it, the head office is in Brisbane, Australia, the main listing is in London where some of the directors are based, and the main operation is in Ecuador where nobody can go to at present, or more correctly, nobody can return from at present. In any event arranging board meetings must be difficult with a board room table with one or two people sitting round it with a big screen on the wall at one end with people dialling in, think of all the time differences involved and the connections dipping in and out - an absolute nightmare.
We want a hands on CEO, not the more traditional one which has little clue as to the day to day running of the company, leaving it to the managers to do who get no credit for the successes they achieve, these are taken by board members, but get the blame for everything that goes wrong trying to implement damn fool ideas initiated by the board. Do you hear a sense of bitterness in my tone? Anyway we need a CEO who understands the task in hand and can handle the company's relationship with the big boys BHP and Newcrest and with CGP all from a desk in Australia, London, New York, Toronto or anywhere else in the world! It's a massive ask, and the right candidate will probably want a bigger reward than Solgold can afford.
I suspect several preferred candidates have got a long way down the track before dropping out, meaning that the whole task has to start again. I guess that is where we are now with a candidate turning us down at the last moment, probably not the first to get this far.
The right CEO is so important for Solgold but as things stand I guess that we will continue to struggle to find one. The CFO the same.
Frog
It must be one hell of a problem getting a new CEO and, to a lesser extent, a new CFO at present as it's next to impossible to get people out to Ecuador. Ecuador is one of the few countries on the UK 's red list meaning that anyone returning from there has to quarantine in a special hotel for 14 (or is it now only 10 days) at their own, or the company's, expensive. I believe that Australia is even more difficult to get into at present. Would any of you want to take such a high pressure position without seeing the main assets or set up? I believe, therefore, it must be next to impossible to fill the CEO position and has probably resulted in the preferred candidate(s) pulling out near to the end of the process. This might also apply to the CFO as they are usually the effective number 2 these days.
Frog
The great problem with the world at the moment is that it has become too confrontational. The west, I.e the Americans and its supporters still believe they can rule the world, despite getting a bloody nose in Afghanistan. Yet there are others who have other ideas, e.g. the Chinese and Russians! Now even the West is getting fractionallised with the native English speakers falling out with the rest, e.g. the EU.
Not wishing to get into a debate about BREXIT, it is unfortunate that the new AUKUS pact is splitting the west,whereas we need more unification. The EU should have been inviting Russia to join the block, rather than push them further away. Likewise, like it or not, our economy is very dependent on China so why push them away. Surely the world will work better without these confrontational blocks.
So how does this affect South America, Ecuador and Solgold? In my eyes, South America which is basically western looking, has been ignored by the other blocks until now and has been left to its own devices. They have had the west's finger wagged at them from time to time, but, up until now, have not moved out of their sphere of influence. The Andes are full of resources which the world needs more and more, especially, at present, copper. And that now is where Ecuador comes in, but it would be far better for the rest of us if the world could fight over it peacefully!
The Chinese and the west might figuratively fight over Ecuador's copper, but if we stop the Chinese getting it, it will affect us in that goods which include copper, I.e. mainly electrical big or small, will become more expensive or even unavailable.
So what I am saying is that the west should stop trying to force their ideologies on other countries and live in a spirit of peace and cooperation. However, Lasso and Ecuador have a difficult balancing act to follow trying to sell its copper to everyone who wants it. This is probably to Solgold's advantage.
I apologise for my ramblings but I hope you understand what I am trying to say.
Frog
I just cannot understand what all the fuss is about re Black Rock. They are a fund manager, and a big one at that, but their overall holding is just on 5%, with the result if someone, or a pension fund or the like, increases its holding in one of their funds they have to increase the shareholdings in that fund, likewise if they sell, then all the constituents are reduced. Pension funds are forever paying out money (to pensioners) and as money comes in (from companies paying into their fund/s) thus if their total in shares will fluctuate. My pension fund which I am a trustee of as a holding in Black Rock fund, I cannot remember which one, but that fund does not hold any Solgold.
So, for the time being, Black Rock's total holding in Solgold will continue to fluctuate around 5% and until something significant happens, like the investor withdraws a significant amount from the relevant fund, this will continue. It is not an embarrassment to Black Rock or Solgold, just a bit of a pain in the neck!
Frog
Bozi, I hear what you say, but I would hope that wouldn't happen. BHP have consistently turned down the opportunity to put their man on the Solgold board, I would hope that they wouldn't surreptitiously put someone forward as CEO. I guess the interviewing panel would be wise to that. In the current Covid climate recruiting a CEO of an international company must be very difficult. As both the Solgold board and the potential candidates are scattered around the world. I just hope we get the best man/woman we can afford who will take the company forward.
Frog
Addicknt, I do feel that you misinterpreted the Board's announcement that it will examine all strategic options and the announced peace with CGP was a statement that the company was up for sale. Far from it, I believe it was just as it said that it was examining all strategic options for the entire portfolio. This might involve JVs or sale of some of the smaller projects, etc.. Likewise, to me, it was a pity that CGP didn't accept our all share bid as I think that it was a good way for that company to monetize itself (by selling the Solgold shares when they hit 40p, if that is what the shareholders wanted).
Solgold is committed to take Alpala to production, and it will do that unless some other company comes along and buys it. This will not be before the PFS for Alpala.
As for the new CEO, unfortunately we do not have a bottomless pit to pay a CEO from a top mining company, so we will just have to hope that he/she is the best we can afford. If he/she should come from a BHP or NCM it will probably be because he/she is p...d off with his current employer for whatever reason and won't be looking to sell out to them at the earliest opportunity.
All that said, I am looking forward to the appointment of the new CEO, the PFS and the core analysis results as they should move the SP to a new level - hopefully higher!
Frog
Thanks RK for obtaining all this information. It has really helped my position in Solgold. I guess it will be all things to all people though.
I have a problem understanding how the block caving will work bearing in mind that Alpala is going to be a very large mine. The surface will collapse in on the mine making it much more difficult to get the ore out. I understand it would work for a smaller mine, but for a very large one, I just can't see that it will. Or are 'they' proposing a traditional mine with the planned dropping of 2 shafts and tunnelling into the centre of the high grade ore. Or have I got it wrong?
Frog
I don't post much these days as I have little to add to what has been said by others on here.
What I would say is that the company must move to take Alpala to production. Anything else is: "We are for sale" which lowers the share price and will ultimately result in Solgold being sold for a much lower amount than would otherwise be the case.
Solgold is going to production. As RK confirmed the other month, we will be able to raise the finance and we have put a team in place to deliver this, most of whom would not have joined if they thought they would be out of a job very soon.
We have made our peace with CGP, BHP and NCM, so if either of the latter, or anyone else for that matter, wants to buy Solgold then they will have to pay the full price for it, not a fire sale price. To me Solgold will take Alpala to production and, in due course the share price will move past £1 and probably £2, anyone wanting to leave on the way will be able to do so at a good profit. I am afraid it needs patience and lots of it!
Frog
But is it?
It is good to hear that peace has broken out between Solgold and Cornerstone, but that is all it is. There is no exchange of directors on each others' boards. There is no sale which is more imminent than it was before. Basically, we are still going to production unless someone chooses to make a bid and that bid is successful. The news this morning told us that we are now friends with Cornerstone and henceforth there will be a friendly exchange of views where this relevant and/or useful. It has not told us that Solgold is up for sale; it is not. It has not told us that Cascabel is up for sale; it is not. In other words, it is business as usual.
Frog
Colonel - To add to your list of points. I just have the feeling that the inclusion of Valuestone in the list of corporate investors in Solgold may have more significance than is immediately obvious.
Frog
RK, it is good to see someone singing from the same song sheet as me. I said sometime ago that Alpala could be financed through loans etc., most on this board rubbished me. I am pleased to see that you now agree with me. We have masses of equity in the ground to secure any borrowing that we may do. The company may feel a small rights issue might be worth doing but they would have to be careful that the non take-up of rights may give the big boys enough shares to give them control.
I cannot see that BHP and NCM would join together to make a bid. Why would one give up their shareholding so the other could gain control? More that they would use their shareholding to block the schemings of the other!
Frog
Hi Grimbergen and Bubble, and everyone else!
I share your frustrations. At the very least I want it to finance my daughter through uni or at least the last three years of it. She has signed up for a 6 year veterinary course starting in October. She is getting a student loan for the fees, but I have said that I will try and finance her maintenance, approx £10,000 a year. If the share gets to 55p, it will do that, but, I want it to do so much more.
Don't worry Solgold is not my only share, I have tried to keep it diversified with part producing good earners and the rest focused on growth, although to some extent they go together at present. However, my portfolio is quite mining focused - BHP, Antofagasta, Rio Tinto, etc., but at least they pay good divs as well as showing good growth.
I do get depressed when Solgold goes down when everything else is going up. We have so much in the ground etc. I know that the share price is not likely to take off before PFS, but some good assay results at Pourvenir will help, but I know there is a big backlog which is affecting other shares as well. Two proven up Tier 1s should work wonders for the share price. I am afraid patience is the name of the game.
Sorry to bore you all!
Frog
Frog
It is a shame to see Quady go. You need people like him to argue the other side of an argument and he always stuck to his guns. I am surprised he stuck it this long considering all the abuse he received.
If you are looking in, Quady, you are being missed already. Come back soon!
Frog
Ever since I have been reading this board, and contributing from time to time, I have read that Solgold will be sold soon, by the end of the week, by the end of the month, and so on. But it hasn't happened! Why?
Those of you who are or have been company directors should, I think, be able to answer this. ...but I will give you my view of the reason:
We know that currently there are 2,292,316,432 shares in issue, so any purchaser will need to pay at least 2,292,316,432 times roughly 30p today, which comes to £687,694,929.60; not very much for the likes of BHP or Newcrest! The problem is that any purchase has to be agreed by the board of directors, and possibly the shareholders as well (not the case for really large companies like BHP). But, to date, there is no real way of knowing exactly what they would be buying, especially how much will it cost to bring it to production. 'It' being Alpala, there is even less reason to know what some of the other sites will cost to bring them to production. Now, it could be roughly the same as the cost of bringing Alpala to production, but then it could cost more; or it could be less! What I am saying is: "What company, quoted or otherwise, would spend good money purchasing an industrial company when there is no real firm evidence as to what it will cost to produce its main asset, or use its main asset to produce something? Or, in the case of Solgold, bring its main asset, currently Alpala, to production?"
Therefore, I cannot see that BHP or any other company will pay out a large sum of money when the cost of bringing the mineable asset to production is unknown. Thus we are unlikely to receive a bid before we have published the PFS, which I believe will give a reasonable estimate as to how much will be needed to be invested to bring Alpala to production. By then, it would be nice to have some good assay results from the majority of drillings at Pourvenir and perhaps some from Rio as well, which would increase the sale price of the company.
Comments please!
Frog
I will add one other point to my previous comments this afternoon: In my opinion it would be better to individually sell of a site whether it be Alpala, Porvenir or Rio than sell the company as a whole, preferably not all the potential Tier 1s! I am not a big fan of JVs especially if we end up playing second fiddle to a major as I believe that they would just screw us into the dust so to speak.
Frog
Addicknt - That is an interesting question. First of all I would mention that I am a share holder of BHP since 1985 when I first invested in them on the Melbourne stock exchange and I have been with them ever since, good times and bad, including acquiring a share holding in Fosters on the way! First of all, my feeling is that if either BHP and/or NCM were to make a move for Solgold, then they would need to do so very soon otherwise they will not be able to, i.e. it will cost too much such that probably the Chinese in some form will be the only entity that will be able to afford Solgold. It will be interesting to see if any other company has built up a major shareholding, although perhaps, because it is below 5% we are not being told about it. The more companies that build up significant share holdings, the more difficult for any one to take out Solgold. I hope that answers your question. What is your view of the same question?
Frog