Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Thank you Quady.
All the board of directors have been individually appointed to fulfil a particular role. These roles collectively using each of their expertise is to bring Alpala and the other major sites to production. What we might term lesser sites, the board is looking to arrange joint ventures. Although at the present time these sites, which one can presume are not considered Tier 1, may be valuable in years to come as the value of copper rises. Hold our collective nerve and we will all be wealthy one day, that's if we are still alive! But then our kids will inherit!
Frog
I have been away for some months now. With the fall back to the low twenties, I became a little disillusioned. Now it has climbed back up my interest, and, more importantly, the value of my holding has picked up. What is perhaps more interesting, is that the same old names are spouting the same old stuff on here!
Now that the board has been reorganised, it should be clear to all, not just Quady, that this company is set up to go to production. Really and truly, we should all accept this because if we believe anything else, we will accept that our asset will be sold short. That, of course, doesn't mean that Solgold won't get sold, but if the "For Sale" notice board is up, it will be sold for a good deal less than the company is really worth. If the company is to be sold now, we will be lucky to get 50 or 60p a share. Hopefully, after PFS, it will be worth more and some good drill results from Porvenir will help a lot. The longer we can hold onto our company the higher the price we will eventually get and the real rewards will come to us once we have started production at our first site, whether it be Alpala or Porvenir. The importance of our diversified book is so important.
I agree with Scoutt's comments at 14.25. Basically copper will be the whole essence of life in years to come. If it cannot be provided in the necessary quantities, then the world will have to look for something else, but for me it is the red gold is where the money should be and not the yellow stuff!
Frog
55p is too low for what we have. £1.50 would be fairer value, but with the share price down around 22p we would be lucky to get 30p in a sale at this moment in time. I think the price will drift until after the result of the presidential election and probably the PFS so it is likely to be in these doldrums for some time.
Frog
I think today's RNS tells us why NM resigned and it has nothing to do with the vote results at the AGM. Knowing how the Alpala Committee's findings were coming together, he is/was on the committee, I guess that he had to resign then rather than wait for the report to be published and be pushed.
Just my thoughts on the matter based on my knowledge of how company boards work.
Frog
I was waiting on the report from the Alpala Committee and that some changes to the PFS would be required. I was not expecting it to be this significant. However, I believe it to have been oversold but I see that there has been some clawback already.
I would doubt if any bid will be forthcoming before PFS as I would think any bidder would want to know what they will be buying. The fundermentals remain unchanged which do rely on proving up some of the other sites as well as producing the PFS on Alpala. The former has become even more important than before while we wait for the latter.
We just have to sit tight!
Frog
We had news yesterday, lots of it. News about La Hueca, Rio and Blanca, probably not what most on here wanted, but it was what people were asking for. Porvenir was pretty good. I guess what is holding the share price back is the report from the Alpala Committee, the Ecuador elections and the PFS in whatever order. So after that with a bit more good news from Porvenir and the share price ought to start rising.
Ever since I started following this board in January last year, people have been saying that there will be a bid tomorrow, next week, or soon! It still hasn't happened! Perhaps it will go to production!!!
Frog
Up until now, I have tended to agree with Quady but, because of recent developments, we seem to have lost our way. If we are going to be taken out, I would like £1 a share at the very least, I would prefer £1.50 a share but I suspect, as things are at present, we will be lucky to get 50p.
Frog
I was in discussion with a number of you on this board regarding the voting by funds at AGMs, in particular by Black Rock.
As some of you know, I am a trustee on a company pension fund. The parent company is listed although it is not a big pension fund like BT or Lloyds Bank. It is approx. £200 million and we are in surplus, but we are a mature fund, i.e there is no money (subscriptions) coming in, only money going out, i.e. pensions in payment. I have looked into how the funds which we are invested in use their votes at AGMs, etc.. We use 4 such funds, plus another one for bonds, gilts, etc.
Three of the funds state that they are advised by either ISS or Glass Lewis. One states that they do not use proxy voting advisory services. Three of the funds state that they vote at fund level, whereas Black Rock state that they vote at company level. It would appear that the default voting instruction is always to vote "for" a company resolution. They all state that where there is an issue, this will be discussed with the company before a final decision is taken on which way to vote. I don't know how true that is in practice. I would presume that all the funds would have voted in support of the Solgold board at the last AGM than with say BHP at their AGM.
We are a relatively small fund so I don't know how representative our fund managers are when it comes to voting. We do, as a trustee board expect engagement by the funds we use in the policies and direction of the companies that they are invested in. We do employ an investment adviser who acts as an interface between us and the fund managers we use.
I would not expect any of the funds we use to be invested in Solgold, after all we are looking to de-risk, but to keep ahead of inflation and the other variables, e.g. longevity of our pensioners.
I hope this is helpful.
Frog
I notice that all my shares are down this morning, most quite significantly, except Diageo. Perhaps the MMs feel we will all be wanting a stiff drink to make up for it!
On a more serious note, I see that the RNS today refuted most of the claims in Crux, but not the one about the costs of Alpala. I presume these will be shown to be false in the PFS which we will at least have an update on soon. I guess the directors will want to get it out soon to counter the distractors.
Frog
By winning the vote at the AGM, at least Solgold is able to arrange an orderly hand over of power. Had NM lost his position, he would, in theory be marched out of the door that day. That situation is very difficult for anyone talking over the position on a temporary basis. It would have been even more difficult for Keith Marshall as, I understand, he is based in London especially as it is next to impossible for him to travel to Australia at the present time.
However, the handover period is, in my opinion, overly long and I would expect, if all goes reasonably well, that it will be shortened.
I would guess that Marshall will want to be his own man and not have his strings pulled by NM, or anyone else.
From bitter experience, it is very difficult to be spirited into a position when the previous incumbent has had to leave and then have to have an extended handover to the new permanent appointee who wanted to change everything virtually from day one. I would say that, in my case, I did turn down the permanent position as it would have meant that I would have had to move away from London where my life was and still is.
I would hope, for the company's sake, that Marshall is able to embrace the CEO position and that he can be appointed CEO permanently. It will be interesting to see where the company goes under his tutelage. If he is able to make his mark on the position, I would expect NM to resign after say 6 months.
It will be interesting to see where the company goes in the future. I hope it does not mean a low ball take over by BHP or NCM but fear it might happen in return for funding, etc.
Just my thoughts.
Frog
This is a very sad day for me and for Solgold. I am sorry to see Nick go as he has brought Solgold to this stage despite many setbacks along the way.
I do believe that the AGM was a success in that NM did not get voted out, in fact he was re-elected by a 10% margin, so a good result bearing in mind that 3 of the largest shareholders had control of over 40% of the votes of those voting against him. What the vote achieved was that he was not voted out so did not have to leave there and then, and also could not stay on as a NED. In other words he could go at time to suit the company and so there can be an orderly hand over.
Both the new board appointments and those of the senior managers recently appointed and the comments in the RNS, quoted by Quady, confirm that it is the board's intention to continue to production. Whether this remains the case after the new CEO is appointed remains to be seen.
I guess that it will remain the case, but funding may come from a different source, eg BHP, or perhaps we will have a rights issue which will probably have the effect of moving power over to the big boys. In the end it may result in Solgold being taken over. Nevertheless, I hope Solgold does survive in a form that it can develop some of the other Tier 1 assets even if it means losing Alpala.
Frog
Earthling and Schlemiel.
I repeat what I said in an earlier post: BHP/NCM have agreed to fund Solgold in exchange for NM's head. They will each place someone on the Solg BOD as is their right. One will be CEO and one chairman. After that they will call an EGM to pass the two resolutions which failed to be passed at the AGM then new shares will be issued to both companies so between them they have over 50% of the shares. They will then make a take over offer at say 30p and divide the spoils between them.
Alternatively, NM may be ill and wants out within the next 6 months. The BOD wanted time to find a replacement, hence the exercise to defeat any vote which we would result in his dismissal at the AGM.
Take your pick!
Frog
To add to my post a few minutes ago:
A large number of the board are recent appointments, so loyal to NM at present, also expecting a long term job. The longer serving ones will probably be loyal to NM to have survived. In other words, this is probably being driven from outside, e.g. BHP. A case of we will put up the money, but NM must go and we will replace him as CEO with our appointee.
Frog
The way the news was tabled means that it came from only one source. If it is true, I will be sorely disappointed as it can only result in Solgold being sold for a disappointingly low price, not taking any account of the value contained in Porvenir, Rio and the other sites and probably under valuing Alpala as well.
It will be very difficult to recruit a CEO in the current circumstances, i.e. Covid. I guess either BHP and/or NCM will exercise their right to place representatives on the Solgold board. One will be CEO, one will be chairman. After that, there will be an EGM to change the share issue rules, that is the ones voted down at the AGM. Shares will be issued to both companies so that they have a majority between them. Then there will be a joint takeover for a low price, e.g. 30p, and the spoils dividend between them.
This is NOT what I want, but is what I fear will happen.
Frog
By only doing the original Franco deal for $100million, I had presumed that it was the intention at the time not to take up the additional $50million, even though most of us on this board believed that we would need it. Therefore, as we haven't heard anything, I am presuming that the $50million was not taken up.
Frog
Hi redknight,
Thank you for your post. You obviously have considerably more relevant experience than I do. I agree that a rights issue and any convertible instrument would cause shareholder dilution probably with the 'wrong' shareholders picking up shares in the company. I have for sometime concluded that a rights issue will be necessary as part of the scenario which I described, but not as the major part of any money raise. We will just have to wait and see what happens. What I am conscious of is that a sale at this time would be at a low ball price that would please few on this board. I agree that a suitable JV or possible sale of one site, preferably not Alpala as it is Solgold's flagship, although, of course as potentially a very difficult and costly mine to build, it might be better to unload it and concentrate on the easier mines to bring to operation.
These are just my thoughts
Regards
Frog