Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
I would add, I would prefer to hold to production, not of Alpala but Porvenir at least. I might be dead by then, being almost 73 now, but I see it as being the only way to achieve "full value". At least my family would be able to reap the rewards, and might, perhaps, give me a big ornate headstone - ugh! However, if we get taken out earlier, sobeit, and I will have to find somewhere else to invest my pennies!
Frog
Earthling - I hear what you say, if BHP, NCM and CGP get together somehow, e.g. allowing one to buy the others' holdings of Solgold, then, with the help of pi's, they might scrape over the line. However, I don't think most pi's would accept a low ball offer of around 50p even if they do want a take over; £1+ and it might be a different story. In most take-overs I have experience of, most pi's sit on the fence and do nothing and accept whatever is the outcome. It may be different with small exploration companies, I don't really know as I am fairly new to this game. I have been buy and selling shares since 1974, but have tended to go for larger companies.
Basically both you and Quady are correct, but you should both accept the other's view, please!
Frog
CGP own 15% of ENSA and 6.4% of Solgold, therefore, according to them, they own 21.4% of Cascabel and Alpala. Any purchaser would get a shock that they are only getting 15% of ENSA/Alpala. As CGP never mention Solgolld's 5.3% holding of CGP shares, by CGP's logic, Solgold owns 91.4% of ENSA and therefore Alpala. 91.4 + 21.4 = 112.8%. They are being less than honest. Any purchaser would do their due diligence so one would expect them to have spotted the discrepancy.
Moving on, they admit to having an earn out agreement wherby their share of the costs upto feasability study are paid from income once the mine goes into production, but they omit to say that they are responsible for their costs of actually building the mine in full; and if the mine is not built by Solgold, how are they going to pay their pre DFS costs? One presumes this has not escaped them as they are so keen to sell themselves and so it would someone else's problem!
Frog
Wouldn't it be nice if Cornerstone and Solgold could kiss and make up. There seems to be wrong on both sides and they need their heads banging together!
As for NM always appearing tired, all his presentations are late at night or in the early hours. or perhaps he has just started toking statins!
Frog
3 weeks ago I was reading the attached snippet from the magazine Locomotives International. Unfortunately, I became unwell and put it down. The out of hours doctor came out and... I recovered, luckily! Anyway here it is (my typing):
"As a result of coronavirus, the Ecuadorean state is in serious financial difficulties, and has dissolved seven state owned companies, including FEEP (the state railways), which although a great deal of money has been spent on the system in recent years, was only being used for tourism purposes, and was permanently in a deficit situation of around US$ 2 million per annum; all employees have been made redundant and it is not known what will happen to the infrastructure and rolling stock, it being estimated that preservation of the whole railway would cost around US$8 million a year."
This confirms the dire straits of the Ecuadorean economy and thus the importance of mining to get it out of the mess it is in.
The only railway which was left operating up until 2020 was the line between Guayaquil (on the Pacific coast) and Quito, 452km. It is one of the must see railways of the world (and was on my bucket list of railways to ride before I die). From the coastal plain it climbs up the side of the Andes onto the central plateau by a series of zig-zags up what is known as the Devil's Nose. Elsewhere, it runs through the main streets of several towns wild-west style.
The other major route on the system is that from Quito to St. Lorenzo on the coast, It has been disused for some years but runs through Cascabel so could be used to to take the concentrate to the coast rather than using lorries on the main highway with all the danger and pollution they create. The railway would have to be relaid. Anyway that is for consideration by whoever brings Alpala to production.
In Ecuador, as in most of Central and South America, people use long distance coaches to get around as they tend to be faster, where the roads are reasonably good, and cheaper than the trains were. Freight tends to be carried by a man with lorry, again more flexible than the railways.
Frog
Pad, I may be a frog, but at 72 I don't feel like a tadpole! I can still stick out for another 5 years or so. If I get taken out, by a big bird, there is still my wife and daughter (now 17) to carry on things.
Frog
Why, why, why do we want Solgold sold after 15th October. We will be throwing away all the potential in Alpala and in all the sites we have licences for. For God sake, lets try and achieve reasonable value before/if we sell.
Frog
I brought this topic up a few weeks ago and I thought I should address it again as I believe it is important when considering when or if there is likely to be a bid.
A company planning a take-over must work out its chances of success before entering into a bid, whether friendly or hostile. Bids are very expensive and it is a pointless waste of money if they are not likely to succeed.
Considering a bid for Solgold, a potential bidder will look at the share holdings and then try and build a book as a springboard. Basically, there are three share holdings that any bidder will want to acquire: BHP's 13.64%, Newcrest's 13.57% and Cornerstone's 7.58%. Acquire all three, a total of 34.79%, then they might have a chance to get past 50%. Looking at the other shareholdings, DGR Global is, I believe, related to NM. That, plus his personal share holding, comes to 14.22%. Tenstar Trading's holding, 5.77%, I presume is a shares in lieu of payment deal for something supplied by them and BlackRock, 5.24%, is a fund management company. In my opinion, neither of these would likely put their shares up for grabs. The other directors own 0.95% of the company and PIs own 39.03%. This figure might include other predators building a share holding but under 5% so don't have to declare it (what is the figure requiring disclosure?) In other words, BHP would need to acquire Newcrests' holding or vv if either of them would have any chance of a successful bid. Someone starting cold, like Barrick or Rio, would need them both. Obviously, Cornerstone's shares would be useful, but why bother buying the company? If, say, half of the PIs accept the bid, then that would squeeze them over the line. But if either BHP or Newcrest do not have the other's shares, then neither is likely to get over 50% acceptances, unless NM and DGR Global accept which, I guess, would be a sign to PIs to accept what one presumes NM thinks is an offer of fair value.
From the above, I would think it is unlikely that there will be a bidding war for Solgold, just one bid from one company, friendly or hostile depending on the amount of the bid.
The question has been raised whether an acquiring company would want or have to redo the PFS. I cannot see that this would be an issue as they need not liquidate Solgold or ENSA, whichever company the PFS is in the name of, and just keep it as a subsidiary. Likewise, no need to buy Cornerstone, just let them tender their shares and die!
Please take this post seriously, I have been involved in a few very small takeovers over the years, but the principles are the same however big the companies involved are.
Frog
Thank you rcgl2 for sharing this article. Although it does not go into the detail of block caving, it does describe the process of building a mine. It is certainly clear that we can do it alone and that it does not need a big boy to do it. The important point is that we must appoint the the right people to build and manage the mine and that such people are out there and available to employ at the right price - not cheap! It will all take time and a lot of money, but is definitely achievable by Solgold. One thing it will require us all to have, is patience but if we stick it out, the rewards will be amazing.
Frog
There has been some suggestions of an ulterior motive as to why Franco Nevado has not completed the due diligence yet. I have done a little research:
1) Currently there are no direct flights between Canada and Quito. It is possible to fly from, say, Tornonto but it does involve a long transit between planes (and airlines) on route.
2) On arrival at Quito airport, one has to show a negative test result for a Polymerase Chain Reaction (PCR) test for Covid-19 taken up to 7 days prior to departure for Ecuador. For passengers arriving from countries where this test is not available, this must be taken at Quito Airport (or other airport in Ecuador).
3) All passengers must then undergo self-isolation at a hotel for 14 days at there own expense.
If that is not enough to put anyone one off, then on return to Canada, I presume they will have to self-isolate for another 14 days. I suspect nobody from Franco Nevada would want to undergo a trip to Ecuador to complete due diligence (dd) in those circumstances. It has been suggested that some form of virtual dd could be arranged. Because of the amounts involved and the location, I suspect that that would be very much a last resort.
So, to me, the delay in signing off the financing contract with Franco is because of the above and not for any other reason.
As for the sp, I do think that the actions of Cornerstone and the uncertainty that is being created, might be holding the sp down. I can't really see any other reason.
Frog
There sems to be a view on this board that if Solgold is sold, it will be sold for £1 or even £2 a share. This may be the case later on but now the share price is under 27p a share, so that must be the starting point for any takeover bid.
Whoever might be planning a take over needs to build a book (of shares). This, therefore, will be based on the share holdings of Newcrest and BHP. As BHP are tied up until mid-October, nothing is likely to happen until BHP is released from its standstill agreement so, at the very least one will have to approach the other with an offer to buy the other's shares. For BHP they would be unlikely to accept less than the 40p a share as, I believe, that is what they paid for them and they would probably want more. The price paid for these shares would not have any bearing on the price offered in any full bid. So as things stand, it would be either Newcrest or BHP who make a full bid, but for someone else, e.g. Barrick, would have to start from scratch. Anyway those two blocks would only yield about 27% of Solgold's shares. They could bid for CGP's which would produce another 7%. I would guess they would bid for CGP's shares in Solgold not the company as a whole. They don't need that, probably more trouble than it is worth. Of the other major holders, Black Rock is a major fund manager with 50 plus funds (my guess) so it would be upto each individual fund manager to decide how their fund would vote, although I doubt if there are many Black Rock funds that have Solgold holdings. Whether or not a bid is accepted by any fund manager would depend what they are expecting from a holding, but I would doubt if there would be much appetite to sell cheap. Othe major holdings probably consist of banks' or brokers' nominee companies holding their clients' shares. They would vote on the instructions of individual share holders, I suspect most would not vote. The last major holdings are those relating to NM. I presume they would vote firmly against.
The result would be that, in theory, any company would struggle to own more than 50% of the shareholder base, but if it does, the price offered would be at a small premium to the share price at the time. I can't see it being much if any more than 40p a share as things are at present, unless there is anything much more significant announced by the end of October. Of late significant announcements have only moved the share price 1p or so.
I do not believe that there will be a bidding war as the ownership of the two blocks (Newcrest and BHP) is key.
As for spinning off Alpala, I don't feel that is viable at present as that is our major resource nearest to production. I believe selling off one of the other sites, or subsidiary companies, once they have been proved up to some extent would be more viable. Selling off Alpala, would delay any income into Solgold and thus dividends for us.
This is all in my opinion. No doubt many of you will disagree with what I have wri
Agree, exept sell Porvenir and keep Apala and the rest! Porvenir will be more difficult to get the concentrate out as there is a big mountain range in the way, more suited to a major adept at solving such problems!
Frog