RE: no subject5 Aug 2022 14:32
Here you are Red
“Shares in the Brisbane-based, London-listed developer dropped last week on rumours of an unsuccessful capital raising.
CEO Darryl Cuzzubbo confirmed the company tested the market.
"We'll need funding for the DFS. We've still got $26 million in the bank, so we've got some runway there," he told reporters on the sidelines of Diggers & Dealers in Kalgoorlie this week.
"We did see if we could get it in the in the short term, but we've got some time."
Cuzzubbo said the company would consider a variety of funding options.
BHP and Newcrest Mining each own about 14% of SolGold.
"BHP and Newcrest have a view on how we should be raising capital funding and the shareholders have a different view on that, and we need to work through what's best for all typical shareholders. And again, we've got time to do that," Cuzzubbo said.
While the relationship between SolGold and its two major shareholders was strained under Cuzzubbo's predecessor Nick Mather, it has been on the mend since Perth dealmaker Liam Twigger joined the company in 2019.
Cuzzubbo, a former BHP and Orica executive, joined the company in December last year.
He said the first thing he did was reach out to BHP and Newcrest.
"In fact, I met with Newcrest on day one and BHP in the subsequent week," he said.
"Look, I think we've got a very open relationship. We share what we're doing with them. They saw the value in Cascabel and in Ecuador more broadly.
"Their support means a lot, right? So a lot of investors look at us because of BHP's and Newcrest's support, so it's an important relationship, and I would say it's a respectful relationship."
Cuzzubbo pointed out that SolGold's recent Cascabel prefeasibility study showed the project would generate free cashflow of US$1.4 billion a year, peaking at $1.6 billion per year, based on a copper price assumption of $3.60 per pound.
"So if you take BHP or Newcrest, or any majors' view, they're looking at this as multiple decades and they're seeing SolGold as a mining jurisdiction, not just Cascabel," he said.
"So it's a long-term game being played out here."
SolGold is targeting the release of a PFS addendum in the December quarter, which aims to add $1-1.8 billion in pre-tax net present value.
The April PFS returned a post-tax net present value (8% discount rate) of $2.9 billion and internal rate of return of 19.3%.
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