Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Thank you Sunnybne for joining the board and giving us your insight into NM et al.
I don't suppose I would ever count him to be in my circle of friends that's if I were ever to meet him, unlikely unless he were to hold a shareholder bash in London and he were to come over to it! However, I do trust what he says and does with respect to Solgold and the reason for that is that he has a large proportion of his wealth tied up in the company so in effect he is one of us, the small shareholders, except that he has more than most of us so that if it were to go pearshaped he would lose more than most of us. Therefore I have faith in the guy to take us to production and give us full value.
On another point, Cornerstone keep saying that they have 22.5% of Alpala. They do not. They have 15% of ENSA which owns Alpala plus 7.5% of Solgold which has 85% of ENSA and a lot of other valuable assets mainly scattered around Ecuador although most of them have not been fully valued as yet.
Anyway, I am here for the duration but it would be nice to have a little upward movement of the share price as I am currently hovering around breakeven at present.
Have good day.
Frog
Why necessarily would someone taking over Solgold have to take over CGP as well? Solgold is the prize. If CGP have the liquidity to fund their liabilities at Alpala then any buyer of Solgold need not worry about them. If they cannot pay then they would be put into liquidation just as Solgold would do. Obviously it would be more convenient to buy them out, but as CGP want cash why necessarily waste money on them, an all share offer is the most satisfactory way to proceed. Thus, to me, the Solgold offer is good as they will get added value as the share price rises or if we are taken over, then the benefit of the takeover price. IMHO.
Frog
I cannot understand why people would be happy to sell their Solgold shares for 50p. The company's assets are worth more than that just for Alpala. With 3 or more Alpalas surely we should be looking for at least £4 or £5 a share. Obviously this is not a quick fix but shareholders can take their profits on the way.
For me NM is the archetypal Australian miner, rough and tough, ideal to bring Alpala to production. Hopefully he will stand up to CGP and the mining majors. I am sure he will. I support him 100%. He has a large amount of his own money invested in it so that is a big incentive.
Drill results are important and need to be disclosed a.s.a.p. after all we, the PIs are hanging on them and the 'market' as well. I am sure NM will release them as soon as he has them. However, they do take time to drill, then they have to be analysed, etc., so we haven't had any yet as they have only just started drilling after the Coronavirus lockdown. He did say that not all the prospects will be Tier 1, but he expected a lot will be, so the odd poor results won't be the end of the world and he has prepared us for the odd possibility of one or two not being upto Tier ! standard.
Frog
Thanks Zoros for posting the link.
It is useful that NM is doing more interviews now which puts Solgold in front of a wider audience.
To me it is clear that:
1) He wants to protect the interests of the current shareholder base.
2) Therefore equity raises will be kept at a minimum, but will be used as necessary.
3) Although he does not want to sell the company, it is his duty to represent the interests of all the shareholders, so he would not want to sell below NAV.
4) Fund raising will be on the basis of NPV not market capitalisation.
5) Does not want to sell Alpala.
6) He believes that Porvenir is bigger than Alpala, but no drill results yet, even that drilling hasn't started yet. (Did others of you here that?)
7) He/they are in regular discussions with the Ecuador government.
8) He reiterated that the CGP bid was very good for their shareholders and he wanted to tie it up soon.
9) PFS to be completed by the end of September.
10) He looked and behaved like he always does. (I haven't seen many of his interviews). But none of the questions phased him.
A very positive interview. Will NM say anything else this Wednesday?
Frog
Some on here have suggested that we sell Alpala to finance development of the other licences. Why?
Alpala is enormous, is proved well on the way to development in 5 years time. It is possible, but unlikely that some of the other sites come on stream before then. So surely it is far better to take Alpala to production, and, if necessary sell 1 of the half proved sites, but I, for one, hope that will not be necessary.
I believe NM is ideal for Solgold. He is not young, but he may have 5 years, possibly 10 years left in him. He has mining experience and is a tough cooky and should be able to take on the big boys and not buckle at the knees when threatened by them. He has shown his commitment by his own personal share holding along with his connected companies which might just be enough to scupper a bid.
It is good to see the SP move positively. I'm waiting on £10 a share, but I was expecting to wait until a few more sites are in production say in 10 years time, but it might be a little sooner. It will take quite a few ups and downs on the way and I hope that there won't be too many more pandemics to hold things up!
Sorry, I miss read my notes. For Blanco, read La Hueca. Porvenir and La Hueca are the two sites which are being drilled as a matter of priority and are in the extreme south of Ecuador. Rio Armarillo and Blanco are in the north fairly close to the Colombian border. Have they got drilling licences, or are the still awaited? Does anyone know off hand?
I have been concerned about the ecological issues, ie the destruction of the forests, that mining will have in Ecuador. I have been looking at the positions of our currently most important concessions in respect of their ecology. Although I do not see a problem which ever candidate wins next year's election, the most trouble appears to be coming from the green activists from Europe and, I think, North America. I really cannot see a problem with Alpala; it is in the North of Ecuador relatively close to a main road. Porvenir and Blanca are at the very south of the country in very remote countryside close to the eastern outcrop of the high Andes where there do not appear to be any roads or tracks, hence the reason that the drilling equipment needs to be helicoptered in to Porvenir. There is apparently a track sufficiently viable to take the equipment to La Hueca. I myself do not see that there is a problem. Ecuador needs the money which mining will provide. I don't want to destoy the enviroment as much as the next man and NM and Solgold appears to be wedded to the same principal. Certainly that is the impression I get from the website and Solgold accounts. If Solgold can manage to keep the footprint of each mine as small as possible then I really cannot see that Ecuador can do anything but gain from the mines. However, the BOD do need to be prepared to answer the activists on this issue should there be a challenge. As I said, Ecuador needs the income that the mines will generate. The local people will gain from employment, schools and medical facilities that are being provided. The world needs the copper primarily for all the electrical goods, generating equipment equipment, etc.. ...And gold is quite a valuable side product!
From my experience of the boards of companies I have worked for, non-exec directors know very little about the companies they work for, except what they are told by the CEO. As the executive directors have little to do with the day to day running of the company, they don't know much more! Providing everything is running smoothly everyone is happy, but if something goes wrong then it is very much the blame game - point the finger anywhere except towards yourself. I hope Solgold is different, but there are still a lot of employees and contractors doing the drilling and sample testing, etc. I hope that there are people of sufficient seniority to keep a handle on what is going on in Ecuador. Did the Newcrest NED ever go to Ecuador? Where are Solgold board meetings actually held normally? I agree that having a representative on the Solgold board would be more of a liability than anything positive now. Probably OK at the start as he would be able to find out information about the various sites beyond what is actually published, but by now that advantage will have totally diminished.
In my opinion only.
Thank you Quady and Italian for responding to my earlier post. Your thoughts are much appreciated. Although I don't post very often I find the posts of those of you and the other serious posters to this board very helpful.
The Solgold holdings of my wife and myself average just under 26p a share. My first holding was purchased at almost 38p in November 2018 and my second at a similar price 3 months later. What helped give me confidence at the time was BHP's holding in the company. At the time you could say I was an 'Exiteer' as I had presumed BHP would make a bid. Now that I have a much bigger holding, I am very much a 'Remainer' because if a successful bid came in at 40p, I would make a profit of only £14,000. If it were £1, I or we (including my wife's holding), would make nearly £70,000. And here is the dilemma: do we accept that, which would be very tempting, or should we wait 10 years or so for £10 per share when there are 4 Alpala's being mined which would realise us £790,000? Am I being too greedy?
Of course that is all hypothetical as whether or when a bid is accepted is not down to me, a very small shareholder, but the owners of the various blocks of shares. This I will watch with interest. To me Newcrest is the spoilt baby throwing its toys out of the pram whereas BHP has, as far as I have seen, not reacted in any way. If they, or possibly Newcrest, were going to make a bid, would it not be in their interest to wait until we were nearer to production when all the donkey work has been done? No doubt all the prospective bidders are weighing up the cost at any particular time and the likelihood of building up a winning stake.
If we go to production, then I presume there will be a rights issue to make up part of the cash shortfall, but at that time with the goal in sight that should not be a problem.
Of course anyone should be able to get out at anytime, or top slice, or whatever, if they need to.
These are just my musings.
I read this article the other day. I note that it is positive about the recent director dealings and that in total they own 3.4% of the company. They are less than positive on the fact that Solgold has no earnings. What do they expect? We all know that the first earnings won't happen until we receive the 1st payment for copper and gold produced at Alpala or possibly one of the other sites if it goes to production before then. Whatever happens, that is not likely to be before 2025 with the first dividend in 2026 at the earliest when we will start being rewarded for our patience.
As far as the gold price is concerned, it is very much tied to the world economy and therefore stock markets. Currently they are suffering and therefore the gold price is high, but when the stock markets recover the gold price will fall back. In an attempt to diversify my portfolio, I have been holding a few gold coins, e.g. Britannia and sovereigns (no VAT) so have been watching the gold price since 2013.
To me the great thing about Solgold is the copper. As years go on the world will need more and more copper as almost everything will go electric. The price of copper in the long run will only go up, the gold is a nice bonus.
I have just been musing on the question of raising the US$1.8 billion Solgold needs to get to the mining stage. I have taken the number of shares in issue as 1.923 billion, therefore the amount needed per share is $0.937, which is 77p a share converted @ 1.2181. To achieve that the share price would need to be in the region of 80p or higher. Further on from that, I wanted to see what effect this would have on BHP's holding, bearing in mind that most shareholders would probably not be able to take up all their rights, so say 50%. I calculate if BHP took up all their holding and everybody else took up half with BHP buying all the shares not taken up, they would finish up with 35.5% of the company. Of course to make that work the cost of the nil paid rights would need to be double the rights cost so the share price would need to be at least 154p.
On the other hand, if the rights issue was to be 2 shares @ 38.4p per share the share price would need to be 78p+, which would probaly be a bit more realistic although still along way off from what it is now. In this case BHP, if they took up all the unsold rights and took up all their own rights, would finish up with 42.67% of Solgold.
This is a very simplistic calculation but if this is NM's chosen path, one can see why he is so keen to get the share price moving up. The trouble is this is not a good time for shares, even with mining shares doing better than most other shares.
I can provide my full workings if anyone needs them and, of course you are welcome to shoot me down in flames if you see any flaws in my calculations.
Just to add, I am now setting out from my home to the south of London to drive to Durham. I reckon it will take in the region of six hours, but then I will need at least one comfort break?