Member Info for Dreamboatwarrior

Hi Pinot
Their shares were in CGP but the two companies are inextricably joined now
“We owned the stock with an average price of CAD 4.5 and sold out at CAD 3.2 for a loss of 28%.”
That’s all they say
I’d say they just got their timing wrong again
Full article posted earlier this morning
Best DBW

Zoros …. It’s Massif not Maxit but I’m sure you already knew that

Ray we’ll miss you …. See you in Q4

Thanks Copper
Here’s the link
https://seekingalpha.com/article/4573222-massif-capital-fourth-quarter-2022-letter-to-investors

Cont ….

The new management team that was put in place was headed by Darryl Cuzzubbo, the past president of Olympic Dam and veteran of 24 years at BHP. This seemed an excellent fit for an eventual sale of the asset to BHP, already an owner of 13% of SolGold. It never came to pass though, and Cuzzubbo was shown the exit in November of 2022. Meanwhile, as the SolGold soap opera played out on the London Stock Exchange, Cornerstone was either range-bound or slowly bleeding, and copper prices were strong. Cornerstone management, late in 2022, got an opportunity to exit the asset on decent terms, and given the drama at SolGold, we can hardly fault them for that. They made a decent profit for the company (and they were all large owners of the company), even if it was not necessarily a good return for Massif Capital. In the end, the Cornerstone management team sold their stake in SolGold and the Cascabala asset for $0.04 per pound of copper in the ground vs. the $0.06 to $0.07 per pound we expected as a result of our review of 21 precedent transactions dating back to 2010.
We were not sure we would have made any different decisions based on our information. Our expectation that Cornerstone was a seller and that SolGold would eventually need/ want to consolidate the asset was correct. Our timeline was accurate, and our read on management incentives was roughly correct. Still, our read on the magnitude of return needed to justify a sale in management's eyes was off by ~50%. We played our hand well, but we should have been playi
ng the management team's hand when we thought through the prices at which the transaction could be acceptably completed in the context of their incentives. If we had done that, we might have been more cautious with our entry point.

Why the price couldn’t move

POSITION EXITS

Cornerstone Resources (CGP:CA)

We entered Cornerstone Resources in January 2020. The firm was an underfollowed holding company of mineral properties in South America. Our interest in the company was driven by its ownership stake in SolGold (SOLG:CA), a London-listed copper and gold developer focused on Ecuador, and the firm's ownership percentage of the land package on which SolGold's crown jewel asset, Cascabel, is located. We owned the stock with an average price of CAD 4.5 and sold out at CAD 3.2 for a loss of 28%.

The investment goal was to benefit from an expected sale of the company, with the value derived from CGP's stake in the Cascabel asset. We expected that the sale would take place within two years. On October 7, 2022, the firm announced it was merging with SolGold. Our timeline proved roughly correct, but we lost money.

Our first misstep was the timing of the purchase. We started accumulating shares in January 2020, expecting SolGold to release an updated technical report on the asset sometime during the first quarter. We expected that the asset would improve with the release of this technical report. Rather than release new technical information, the firm reconfirmed the existing technical report and then delayed the release of a pre-feasibility study that had already been delayed once. As SolGold and Cascabel were the assets on which CGP traded, it fell on this news.

The delays should have been a red flag, and we should have exited, but at the same time, Nick Mather, the CEO of SolGold, stepped down. Nick had been forward-looking in building SolGold, having ventured into Ecuador and staked out large land packages that were highly prospective long before Ecuador became a hot spot for exploration. We are unaware of any shareholders who liked him. Liking management is not necessary as long as they are competent. Still, Nick was sufficiently disliked (in part because of his lack of a particular type of competence) that 44% of shareholders voted against him at the December 2020 AGM.

Nick was hell-bent on building the Cascabel mine. We viewed this as a problem. The deposit is fantastic, but only if you want to build a large, deep block cave mine. Block cave mining is a very complex method of monetizing an asset. It has a substantial upfront cost and requires tremendous expertise, which SolGold did not have. We viewed his departure as a positive, opening the way for the asset to be sold alongside Cornerstone's stake in both the deposit and the SolGold. Within that context, a delay in the PFS release, giving the new management team time to reassess options, was not an obvious red flag.

From the telegraph Tesla

“New peak pricing at electric car chargepoints can leave consumers worse off than if they stuck to traditional petrol-engined vehicles, according to new analysis from the AA.
Previous analysis by motoring organisations has showed the cost of charging electric vehicles has soared (https://www.telegraph.co.uk/business/2023/01/06/electric-vehicle-drivers-hit-surge-pricing-thousands-roadside/) in recent months, driven by rising energy prices partly triggered by Russia’s invasion of Ukraine last February.
Rapid charge points used by motorists topping u
p on long drives are now nearly £10 more expensive than filling up a car with petrol, the RAC revealed last week.”

Dates for the diary …. If we last that long 2 events early March for Solg

https://redcloudfs.com/prepdac2023/

https://www.pdac.ca/convention/attendee-info/mobile-app-home

Was wondering if the website was still working

Add …. I had to drive to the NEC the other day (400 miles round trip ) …. Managed it on just half a tank of diesel…. Pulled into the services and the line of cars wiring at the charging points was crazy …. Unfortunately I can’t afford the loss of time not withstanding the diesel is probably cheaper .
Just a waiting game here now they just need to get this merger signed off ….. I do hope they’re not placing the CGP shares whilst we’re sitting at these lows.
Have a decent weekend
DBW

NP …. Just a thought , wonder if they are trying to place the extra shares prior to merger completion?
Can’t see why they would but I’ve never been able to second guess this company

Red …. I agree with that pretty much.
Will there be a we are looking to sell Cascabel message prior to first bid.
What’s clear is that this merger completion is key…. Could they still look to place the CGP shares prior to completing or will they simply be held in treasury?

DTH … for once I don’t disagree

Morning Orthern
As you say nobody knows how this will unfold… we all just have out best guess/ guesses.
I think we’ll see a bid around the levels you mention
40/45/50 …. I think Sangha is confident of this which is why he’s been so confident in shooting his mouth off. Only when the first bid lands will we know for sure how many, if any, other parties are interested. I’m optimistic there will be a few.
Either way it would bring this to an end at a considerable premium to where we stand currently.
ATB DBW

“Stop masquerading as some intellectual heavyweight - no one's buying it”
Exactly SM ….. looks like someone brought a knife to a gun fight

Bubble …. What was demeaning or derogatory?

DG …. Totally agree… watch the volume

I’d say weeks/ a month or 2
ATB

Anon
One day news will land and we’ll all know where we stand …. At that point it’ll be too late for any further speculation

Lol

Mostly agree … but Nick’s interests are inextricably linked to ours

DG … I don’t necessarily want the Chinese to buy this, but the BOD ‘s job is to get the “best value for all investors “ …. Certain shareholders shouldn’t have tried to grind this company into the dirt ( from within ) if they wanted to walk away with the prize.