Member Info for Fortissimo

Resistance is ... futile!

I think the value I stated will almost certainly come true but not for us shareholders unfortunately... we'll get our payday but the buyer will take the Lions share and rightfully so as they will be taking on the development risks and regional/political risks too. At end of the day... mining is always about funding and whether you can or can't fund it. Minnows don't usually end up with 100% stakes in Tier 1 discoveries. Usually by the time it's proven up so a buyer wants it, the minnow has dealt away 70%+ in process of funding just the exploration!

So for SOLG to be in a position of having 100% ENSA stake in Tier1 asset really is very rare. Yes we've had dilution along the way and a few royalties in there too but it's time now to see the fruits of holding onto that 100% stake. Super majors absolutely love 100% interest assets. They don't like fragmented to multi partner deals as the partners involved can often be the biggest drag on the development.

But ENSA is certainly worth multiples of in ground prices. The metal mix is off the charts. It's one of a kind.

The 21% of resources relates to the economic story or PFS that is better suited to SOLG than a super major. The Capex and IRR of importance a minnow doing pre finance talks etc for a project like this takeover the broader metrics.

In reality, a super major like Rio or Anglo or BHP would rip that PFS up and start with something like $5bln Capex tap into 30% to 40% resources delivering a values that dwarf SOLG's projected numbers. Throw in rising copper prices and the quality of metal basket mix at Alpala (and don't forget open pit Tandy), and I reckon you are talking around 200p a share on comparable basis to the 50p mid point in your 14MT CU.

Block cave mines are all about scale. Scale up Capex by near double and the profits really begin to surge and the payback period is not far of the same.

The super majors have the cash and access to debt that allows them to take advantage of 'scale'.

SOLG's numbers are the lowest we can do on Capex vs gaining the funding remit or minimum IRR of 21% or above.

Trouble is... IRR is always done at 'spot prices' which is ironic when dealing with copper which is on track for a huge deficit in 2 or 3 years time yet the market is too occupied playing with copper prices as an old hedge or barometer for equity markets bull vs bear strategies. It's an outdated tool now and needs to be binned. Then copper can really get a move on.

173 days since Maxit launched into the SR process. If you take the earlier parter/interested parties discussions which kicked off in Q1 2022 with main focus on grass root and licence block bundles... that's close to a year. Of course the parties involved in those grass roots projects might have zero interest in a project the size of Alpala, but all the same... SOLG have been sounding 'interested parties' out for sometime now.

As we enter Q2 next week, SOLG/Maxit will be edging toward a full 6 months on the SR. As some have muted on here already... based on the 3 or 4 possible outcomes... what else is there to discuss??

Aside from SOLG specifics, we also know that Ecuador gov are in extended talks with Chinese on a first ever free trade deal between the two countries. We know SOLG are also in discussions with Ecuador Gov regarding various key milestones on Alpala pre DFS. We also know that Lasso is under pressure to deliver something 'big' business wise as the latter formed the wider context of his election campaign not to mention IMF debt issues.

So lots of pieces involved in this all looking for a rewarding outcome and all likely motivated to get it done.

So my assumption would be, SOLG might well be done and dusted on the SR but are sitting on their hands until China/Ecuador Gov finalise their trade deal. The headlines will be big on that deal and shake a few up in the SA region (US included). But also announcing a multi billion dollar investment in copper/gold mine (largest in Ecuador history) would fit really nicely with Lasso's ratings and ensure plenty of momentum for all involved.

I know it's been said time and time again, but patience required as not all is within SOLG's/Maxit's hands. Bigger issues at stake right now with Ecuador and Chinese Trade deal talks. Timing is everything and I think Bob's Rolex is working just fine.

DBW, rise above it. You are way better than that.

Individual should be reported to the police imho. Clearly has lot of hate toward UK. No place for 'hate' on social media.

kat2008,

Did I misread your weekend posts or are you firmly saying you are a supporter of Putin's war on Ukraine??

If you support tyrants like that, then you'll have to go in the bin as no one of sound mind can support Putin or the Russian governments laughable excuses for trying to invade a peaceful country.

kat2008

I have solar panels and can tell you now... you are talking nonsense. You need to do some more research. Solar panels and battery's have moved on a great deal now.

And I didn't say they would handle 'all needs' but certainly half.

The losers would be EoN or EDF et al (pensions funds etc) and the winners would undoubtedly be the consumers/tax payers.

Which is precisely why the Tories want none of it

There's an obvious solution to the energy crisis and that's solar. If Gov went big on solar power via grants for people to stick panels on roof, then most households would cut energy usage (electric mainly) by half if not more. The Sun rays are free.

But as the government has fingers in pies with French energy firms and so on, they really don't want UK homeowners to be self proficient. They don't want you to be able to generate your own electricity. And most of all... they don't want to have to pay you when you add it back to the grid.

The elephant in the room is not EV's or electrification... it's the deals that the UK gov have struck with foreign firms and the fact that most profits coined in from tax payers go into fat Tory pockets along with their pension fund buddies.

Wind power useful but it's still in hands or foreign firms when solar panel generation should and can be in hands of the taxpayer on individual basis or on community led projects that use Greenfield for panels to feed entire villages.

Montecristo, have you had a look at the other smaller miners out there which BHP have taken smaller positions in over the last few years.

You know about Noront. Got their buts whipped on that one by Wyloo. You probably also know about Mincor... recently Wyloo made a dart for them and BHP also have a small holding.

See a pattern emerging?

You'll know about it when they are all ready.

Would releasing the outcome of the SR constitute 'value enhancing news'? I think past RNS's cover them off on the possible outcomes of the SR so even if they were to announce that the SR is concluded and decision to seek buyer for ENSA agreed by BoD's etc... I don't think that will affect FSA's views on Scott's options or any upcoming staff options. They've already spelt it out several times and I believe there are only 3 or 4 possible outcomes. So in nut shell... I don't think options will prevent SR news. But it certainly prevents news of an 'actual agreed sale' for at least another 2 or 3 weeks for sure.

I think most investors out there would be delighted to see another April 6th event (ISA time) unfold with sp this low before value enhancing news is released.

Only couple of weeks away now.

Lets get it all sold and sorted before Labour get in and stick CGT up to 22%+ flat rate (for those not using the ISA!)

A few gold stocks are looking rather bright and healthy while rest of market sells off.

Volume weak of late so more the usual SOLG drifting on zero news.

The employee grant of options was done in early March 2021, so base don last RNS, it would seem these have yet to be agreed or finalised. Like I said... they will be revealing a bit of their hand when they release the vesting criteria and my guess is that I like others will be spitting bullets for a few days again.

As DG1 says, need to get these nest feathering events out of the way pronto as market usually needs at least 21 days between share awards and any value driving news.

Great article.

Any super major making copper/gold acquisitions now will be welcomed by their shareholders with open arms.

Not many Tier1 mines up of sale right now... in fact... I'm not aware of any that are available to buy.

Ortherncopper,

What exactly do you want to know? When you say 'nothing is happening' did you just make that up in your head? The lengths you seem to be going to these days to put a negative spin on SOLG is beyond belief.

Do you want to know what the 600+ staff are doing on a daily basis? Do you want to know about the Ecuador gov/mning gov confidential negotiations? Do you want to know all about the land purchases that are ongoing and resettlement works?

You have absolutely no idea at all do you? So stop spitting the negative nonsense and demanding details that quite frankly would mean nothing to you anyway.

The $50m royalty funding was ring fenced to ENSA. It's needed for the continued work on Alpala ahead of what looks like a sale or JV deal.

There's over 60 licences held across Ecuador. There is no mining cadestre right now, so no new blocks. Add to this political pressure has mounted over last 6 months and now highly likely that further licences or concessions will see Marches through Quito.

So imho Maxit's main job is two fold... 1. Seek buyers for ENSA or partners or IPO it. During that process ... 2. discuss with potential buyers their interest in other blocks or SOLG as a whole. 3. Discuss with potential partners and buyers whether they would be happy with just ENSA or would they like a slice in the planned spin out Newco and the other 60 odd licences??

SOLG is not a one trick pony, currently has largest licence block holder in Ecuador. Has largest discovery in Ecuador. Largest Resources in Ecuador. Has probably the best ESG in Ecuador. Thus great brand and welcome in Ecuador... that's worth a mint too.

So the SR is a process to realise the best value for shareholders. IMHO to determine this you can't just assume values and interest. You have to actively engage with partners and buyers and hear exactly what they think and what they like. That takes time. It takes lots of due diligence due to Ecuador politics and social/local issues.

If an all out sale is best... then that's what will be recommended. But with potentially another 5 to 6 Alpaca's on the books why would you give them away cheap? Furthermore, how do you sell those other 6 style Alpala opportunities without devaluing ENSA?? After, why wouldn't a major just dip a toe into ENSA when they could just drill away across the SOLG exploration folio via JV's and discover 2 or 3 Alpala's for fraction of the cost. So not easy job for Maxit. Selling ENSA for X billion and then spinning out everything else into newco and exploring with the CGP 5% SOLG share sale makes perfect sense. But like I said... what if that causes issues with the ENSA sale or buyers... what if they want some licence blocks chucked in as back up should Alpala prove hard to block cave mine. So keeping power dry, weighing up all options, discussing with buyers etc are imho all part of the SR process. These talks don't have to be declared as they will not be deemed formal but simply engaging with potential partners. And let's face it... they have had that process ongoing since this time last year when they announced they were talking with various parties about the grass root licence blocks and possibly packaging them up. So don't think for one moment that they have not been having cosy chats with many interested parties.

Agree - I think that's part of the plan. But before you can get the likes of BHP or Rio or Anglo etc to counter offer, you need a realistic albeit cheaper offer to be tabled first.

The 5%+ cheap equity placing to chinese at 16p ensures that they are onto a win win scenario and incentivised to roll the first domino.

When it kicks off, I imagine those that are saying.... get me out of here I'll take 30p tomorrow anything to end this sorry tale .... will be saying... I'm not taking 40p as first offer... I want to see counter bids and 50p+.

When Bob and Maxit are ready, due diligence fully covered off... then we'll get going. In meantime, we have the sorry tale of director remuneration to be sorted first (Scott got his in early) and then we have the debate on spin offs for non ENSA assets. I think the quandary on the latter is that a buyer may only offer top price for ENSA if they get everything else for free. So spinning it all off before an ENSA sale could be counter productive. That's why it's all bound intricately together in early stage talks as you get to understand what the buyers want and where they see value.

As we know the Chinese are already heavily invested in the south and keen on Porvenir. There's leverage in negotiations on licence blocks in around Warintza too. Codelco et al no doubt very keen. The northern region is a different animal and solely dependent on Alpala going ahead to ensure infrastructure build takes place which then means other licence blocks become more economical than before. Standard early mine development stuff.

Yes totally agree on the gold copper mix. The great thing with Alpala is that we have an even greater mix than that with loads of silver and other pm's. As NM said a while ago... the smelters or royalty guys like Franco et al LOVE the Alpala metal basket. That's what makes Alpala so special.

Wouldn't know listening to a few pessimistic posters on here though!

Bozi,

How do you know that Bob's phone isn't inundated with calls of interest? What tells you it hans't? Majors might well be banging on the door but you or I won't hear about it until they are ready.

Name me one Tier 1 asset that has been sold way under the market value. Go on... name me one.

Who's everyone? Not everyone is ready to sell up cheap. A few retail investors here and there but apart from that, most want full value or as close as we can get to it.

As for conditioning... I agree to some extent but that's largely down to a few on here. Most brokers or analysts haven't changed their views or targets on SOLG. Most remain the same around the mid 70's.

I'm all ears when it comes to opinions but for the very reason of 'conditioning' do not ike spurious 'feels like a disaster' or we are desperate or what's wrong with our asset... we have no interest ... it's all utter nonsense.

In terms of timeframes... it's important SOLG get the asset sold or financing in place for the development stage as Ecuador gov approvals are staged in a way that means Capex requirements come calling. If SOLG leave it too late, they will be heading into a very dark and tricky corner with options becoming more limited as time ticks by and cash pile falling with equity raises likely. But that's a story for Q4 2023 not Q1.

Hope the above answers your questions.

No, that's not what I was suggesting. I was saying that the move from 13p to 18p was 'welcomed' by many as testing times and amongst wide scaremongering and doom mongers etc. But my point was, many posters were quiet during the rebound but seem to come out with negativity when the sp moves down.

Sp's go up and down, that's markets for you. And I'm certainly not happy at 16p or 17p levels. But just because the sp is down at these levels doesn't mean the bigger picture has changed at all. We are all aware of plenty of examples out there whereby sp's are generally very low before doubling, tripling or 4 or 5 bagging on sale deals. Yet we have many posters on here who seem to think the sp reflects the potential sale price. And it doesn't... but for balance it could! Who knows? We have to assume that M&A generally is consistent with in ground prices being basis for valuations/sold prices.

So a few weeks ago we bounced from 13p to 18p and a number of posters on here were absent or had very little to say. We fall back from 18p to 16p and suddenly the doom merchants and those that seem to have warm cuddling 'feelings' that things are an apparent mess start spouting negative nonsense.

Seriously guys... can you be any more predictable?

As for Irwin... his comments were in the context of 'selling all his SOLG shares' years ago and reinvesting the proceeds. Had he done that he would have made far more. It's not about whether SOLG will go for less than 40p as some wrongly assume. It's about having that capital to reinvest and then turn into more profits. It's quite easy to understand. Irwin uses money to grow money. He doesn't like having it locked up especially when inflation is 10%+. He wants his money out so he can reinvest it. He doesn't care much if he gets 35p or 55p as at end of the day, he'll be turning that cash he gains into more cash. So whether that's through SOLG share price premium or through another investment is what is all about to him. To most here, the journey has been such a dragged out affair that most will be taking their cash and sticking into places far far away from the casino like stock market that it has become. The market has become a joke. No wonder property is looking so good these days - bricks and mortar v bitcoin? One for investors and another for gamblers.

What's with the inclusion of Clarksons Securities under analyst coverage on presentation??

Clarksons Securities are more about oil and gas/shipping etc and not much to do with Ecuador or miners in general. It's a curious one as they are at the low end or bottom of analysts targets. Why would you include it when you have more than enough credible analyst coverage already?

Unless Scott and co need that low end number in there to help them set their option vest criteria lol! Wouldn't want to use all the experienced analysts numbers in the mid 60's and 70's now would we!