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The question about whether or not it is possible to go it alone keeps coming up. If we are not going it alone, why have we arranged finance to take us to DFS/BFS? People on this board keep saying that we will never be able to finance the building of Alpala nor any of the other mines that we are planning to build. First we have to build Alpala.
Why are we not able to build Alpala? The mine contains x million tons of copper multiply this by the price of copper (use a fairly conservative price) , take off a percentage (say 5%) as some won't be possible to extract, etc. This gives the value of the asset and can be used as security. Provided the cost of building the mine is considerably less than the value of the asset, we can borrow against the asset. OK the loan may be too big for one bank to provide on its own, so the lender will probably get together a consortium of lenders. This is normal banking practice, OK BHP might achieve a better interest rate compared to Solgold, but we are only talking 1 or 2%. This is doable and in the unlikely event that we should go bust, then the bank/s sell the asset to a major or the Chinese, etc, at a good price., i.e they get it cheap!
I used to work for an American bank in London a good few years ago and we did this sort of lending, usual as part of the consortium not usually the lead. These days there are more sophisticated instruments available than there was in my day and in any event I decided that I was more interested in other forms of banking and my career took a different course.
Anyway, my point is that there is all sorts of ways we could raise money, not only by bank loans, as above, but secured bonds, convertible or otherwise, royalty deals or even a rights issue, or more likely a combination of all of them.
It is certainly possible to do it alone, we could do a JV but these, from what I have heard, often finish up with winners and losers. So only a 50:50 or more favourable to us JV please. Or we could sell off one of the sites. In other words there are plenty of possibilities without us having to sell up cheap!
This is all my opinion only.
Frog
Lafitte. Next time Black Rock come in to present to us, I will ask how they deal with voting. In fact, I will ask the next fund manager who presents to us. Currently there are none due in and my current tenure is up towards the end of this year, I haven't decided yet if I will seek re-election! In any event, I would think that , in general, fund managers wouldn't vote unless there is a burning issue and if they don't like what is going on with a company, they would just sell.
Frog
Black Rock's funds each have their own fund manager and team and they each are responsible for the decisions relating to their own fund. They might vote through one source but that vote might be 'x' shares 'for', 'y' shares against. The pension fund of which I am a trustee does have a holding in a Black Rock fund and that is how they operate. We would not be interested if they operated in any other way. Each fund has its own raison d'etre and a benchmark to aim for and, hopefully, beat.
Frog
If you are considering the number of individuals voting then it is a massive vote of confidence. If you are considering numbers of votes counted then it is still a resounding vote of confidence though obviously not as great, but it is still a defeat by about 10% so quite significant.
As for Black Rock, all their funds with a Solgold holding would vote separately, therefore some might might vote 'for' and some 'against' and some might not have voted at all. Probably many Black Rock funds would not have a Solgold holding, so their holding is probably spread across not too many funds.
Frog
Following on from rcgl2, for 80% of the share register to vote at an AGM is massive compared to what one might normally expect at an AGM. And the fact that PIs were mobilised in support of Nick Mather is actually a massive vote of confidence in him. It is great that the PIs came out in his support against two bullying majors and a lapdog! However, NM is right to try and smooth over the relationship problems with BHP and NCM. Perhaps the obvious first move is to invite them to take up their rights to seats on the Solgold board.
It should be remembered that the defeat of BHP, NCM and CGP was a very clear message of support for NM and the BOD and their policies, despite what some on this board suggest. It is now up to NM to steer the difficult course of trying to keep everybody happy which, of course, may finish up doing the opposite! The first pointer will be whether he takes up the $50 million from Franco or from BHP and/or NCM against a share placing, or nothing at all at present.
Very interesting times.
Frog
If BHP/NCM had been successful in ousting NM they would be successful in positioning themselves for a low ball offer as low as in the 20p's. I am sure that is not what any of us want, even CGP. It is for this reason that we, the PIs, must all continue to support NM and the BOD, whatever we want - sale or production - otherwise we will finish up as mincemeat!
For today, I suspect most shares will drift lower.
I would like to see Solgold in the new year being more proactive in talking to mining magazines and other share platforms getting our story out. If CGP can do it, so can we!
I would say that I agree with Quady that each site can be developed and financed separately. Where I perhaps differ from him is that, unless they are developed in succession, I.e. one going to production followed by another and so on, we will have trouble raising the money needed so might need, at least, a joint venture or two to get things underway.
Anyway let's hope for a better 2021.
HAPPY NEW YEAR TO YOU ALL.
Frog
There has been a lot of tosh written on here over the last couple of days saying that NM effectively lost what was effectively a vote of confidence and that he should stand down. Some of those saying this claim from their own knowledge and experience that no CEO winning a vote by a margin of 10% can stay in post.
The result was actually resoundingly in his favour. Those voting against were primarily the three parties who want Solgold on the cheap. The majority made up of a large chunk of PIs supported NM, but now there are a few who want him to go and for Solgold to be sold on the cheap. Shame on you! If that's what you want, you should have voted with NCM, BHP and CGP.
I am disappointed with BHP, I am a shareholder. If they had stayed on side with NM they might well have finished up with a JV with SOLG on one or more of the projects.
I do, however, feel that SOLG should learn from this. Cornerstone has been very articulate to the press and I really do think that Solgold should do the same. In other words, get our name out there and the project we have and get people to buy our shares, and our dream of building a series of mines in Ecuador and wealth to the people of that country and ourselves.
Thursday was a great example of the power of the small shareholders. Well done for showing that we are important and that we do count.
Have a good weekend.
Frog
Just to throw the cat among the pigeons, We don't actually know that BHP voted against NM, we are just assuming it, i.e. putting 2 and 2 together. NM will have access to the voting but, of course, we won't. In any event he survived and he is, therefore, at the helm for another three years. Well done to all the PIs who voted for him. He may not be the most charismatic of leaders, but he definitely knows what he is doing. I am with him to production at Alpala!
Frog
The last two years have been difficult for NM. He was trying to prove up Alpala with very little money and then Coronavirus hit. Now, after the Franco deal, he has the money to get Alpala to DFS/BFS and following the placing in June (was it June?) and the placing with the Chinese, he now has the money to prove up some of the other sites, but still Covid is still slowing things down.
NM is a shareholder like us. He wants what we want and that is a decent share price and to achieve that he believes that we need to go to production. He is still capable of doing that, he is not too old. If he felt he was struggling, I am sure he would step down. He does have a difficult job though: the company head quartered in Brisbane, much of the operation centred in London and the mines in Ecuador, and still Covid is making travel difficult and moving the rock samples around for assaying is difficult, etc,etc.
This is a difficult time. We need to be patient. NM and the rest of the board need our support and not the constant sniping that is coming from some quarters. Do you want 55p a share or £1.50 a share plus?
We will see what happens at the AGM tomorrow!
Frog
The last two years have been difficult for NM. He was trying to prove up Alpala with very little money and then Coronavirus hit. Now, after the Franco deal, he has the money to get Alpala to DFS/BFS and following the placing in June (was it June?) and the placing with the Chinese, he now has the money to prove up some of the other sites, but still Covid is still slowing things down.
NM is a shareholder like us. He wants what we want and that is a decent share price and to achieve that he believes that we need to go to production. He is still capable of doing that, he is not too old. If he felt he was struggling, I am sure he would step down. He does have a difficult job though: the company head quartered in Brisbane, much of the operation centred in London and the mines in Ecuador, and still Covid is making travel difficult and moving the rock samples around for assaying is difficult, etc,etc.
This is a difficult time. We need to be patient. NM and the rest of the board need our support and not the constant sniping that is coming from some quarters. Do you want 55p a share or £1.50 a share plus?
We will see what happens at the AGM tomorrow!
Frog
Earthling - I cannot see any problem with NM arranging finance to bring Alpala to production. We have the experience on the board and in management, and experienced contactors would build the mine with Ecuadorian labour. The same scheme will be used to finance and build the other mines, althouh easier and cheaper as they would be open pit. However, as mentioned at the weekend, until we have a mine in production raising funding to bring the other mines to production may be difficult and so it might be necessary either to sell a mine, or build it as a JV. My suggestion is Porvenir as it is at the extreme south of the country as against Alpala, Rio and Blance which are all fairly close together in the north and could therefore share some resources.
Frog
If NM is voted off the Board, I very much hope he is re-elected, this would in all probability affect the share price negatively as his shares and those of companies which he has control or influence would likely be sold. It might give someone the basis for a bid, but it would probably be at a much lower level than it is now. IMHO.
Frog
My opinion, for what it's worth, is that the upcoming AGM is weighing on the share price as is, so I read some where, the CGP issue. I would add that CGP seem to be far better with the PR than we appear to be. If only we could continually ramp the SOLG share like they seem to manage to do with CGP.
I want the share price to rise just like everyone else, but for ever watching it does not do our nerves any good! Going away for a three to six months, perhaps longer, one should find a significant change one way or other when one gets back. Constantly watching it and it barely moves from one day to the next is no good for our peace of mind. We are sitting at home waiting for something to happen, but in the real world, Ecuador, everything takes a lot longer to happen than one imagines. Think about Porvenir, for example. it is miles from anywhere, situated within virgin forest or jungle. To get there originally, they had to hack their way there before they could set up camp. Most of what they need to start drilling has to come in by helicopter - the wood to build the drill platforms and the drills themselves. As I said, this all takes a lot longer than we imagine and having to wait for news is very frustrating.
So, first of all, we need to get the AGM out of the way without any disasters there and then we have to be patient and perhaps the PFS will move the share price positively.
So with Solgold, we need patience and oodles of it, if you haven't got it, you will just go mad waiting for something to happen!
Frog
By using streaming as in the Franco deal could be used every time, but once Solgold has built a good credit record then the cost of borrowing in whatever form will come down and, of course, in due course, they will be able to fund from reserves, to some extent, at least.
Frog
Earthling, I refer you to my two posts at lunch time today. Financing a mine build should not be too difficult. Each mine being a separate risk and the minerals in the mine act as security once it has been proved up. This is what the BFS is all about. Solgold should not have a problem raising the funding to build Alpala nor any of the other Tier 1 mines. Raising funds to bring a second or third mine to DFS/BFS should also not be a problem. However, where they may have a problem is raising the funds for a second mine before Alpala has gone into production may be difficult and it may therefore need a sale of a mine or a joint venture may be the answer.
Frog