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Might just be my positive outlook of late for SOLG but surely I can't be the only one that sees recent 'chinese/ecuador' news along with a bucket load of red tape being cut up as a little coincidental with SOLG entering the potential 'sale' phase. Let's be quite clear here, the current producing mines in Ecuador are delivering 'not very much' for lasso et al. The only asset in Ecuador right now that could transform the mining industry several times over is of course ... SOLG's Alpala.

Last May/June BHP met up with Lasso for a cosy chat. A month to two later, BHP decide they would go for Oz Minerals. A month after that, SOLG suddenly adopted a fast and smart approach and got the chinese involved. Just a hunch... but I think even Lasso might be tired of BHP's games and with a little guidance from his business partners (inc Maxit et al) Ecuador appears ready to see the Chinese take the mining industry forward... with speed one would presume.

When you read between the lines, it does look like Lasso has decided which way he wants to go. That might not work out well for us if other interested parties know that the chinese have the highest senior Ecuadorian backing.

Pro's and con's with this but if I were BHP and genuinely interested in taking Alpala forwards, I'd be pretty worried now. It's slipping away from them faster than even they thought possible. The advancements (politically and via SOLG's Oct merger news) has been breath-taking. Fast and smart indeed!

I guess the question is... will the chinese be paying fair price or will Lasso be happy with them gaining a discount in return for more rapid progress??

The big boys are in the mix now.

Fast and smart indeed.... and that's not just SOLG. Looks like Lasso keen to get a jog on before 2025 elections.

Great research and posts of late.

And to DG1Investor... great posts.

Nice note to end 2022 on and enter 2023. Have a good one all.

Great posts Bogota.

"“The mining sector in Ecuador is beginning to grow,” said Molestina. “It is going to be really attractive for Chinese companies to invest in after the agreement.”
Two of Ecuador’s largest copper mines, the San Carlos-Panantza and Mirador, are owned by the Chinese state-owned enterprise CRCC-Tongguan."

Looking really good for the Chinese and SOLG. Free trade deal could be game changer. Timings look no coincidence either.

Ortherncopper,

I don't spend much time on the bb's these days as am invested in SOLG and believe it will pan out just fine. I think all this 'ramp' stuff lives in your head a bit and yes there's been a fair dose of it but not exactly unusual for BB's. Have you read the GGP BB?? On the whole, I think the SOLG BB is pretty grounded and if anything it's posters like yourself that have been dishing out more doom and gloom than ever before. Why you think it appropriate now when we are at rock bottom puzzles me as you were not exactly doom and glooming when the sp was in the mid 30's were you?

The dose of reality you talk about is what exactly? What's the fantasy exactly? Echo chamber? What echo chamber? All these things seem to live in your head as I can't see them on this BB at all.

Everything looks fine here. The sp will sort itself out pretty quickly once the merger is done and the ARB traders have settled their books.

Certainly more doom sayers of late than rampers... that's for sure. I have a hunch why.... because most are not invested lol!

Ortherncopper,

I wouldn't get too tied to that 16p+ placing price. It's not far off the 20p placing price seen a year or so back. You have to account for the fact that the entity taking the placing had full knowledge of the dilution coming from the merger. Hence likely baked in. Furthermore (and this might be the reason for the swift action) regulators across the pond would need to see SOLG's cash balance swell before they could sanction and approve the merger. Sometimes you have to discount a little when you are in a rush. It's up to you if you you want to dwell on the placing price but remember, BHP paid 45p for a slice a few years ago. Norges bought over 3% at averages near 30p. Valuestone took some at 32p. We've had plenty of placings before in mid 20's and this taking the placing had firm sights set on 40's and 50's I'm sure.

And remember, Noront moved from 23 cents to 110 cents. Not sure where you got 300% from? Noront example would get us exactly where we need to be... just need. bidding war to commence. Incidentally, could you name me one tier 1 gold/copper mine that hasn't been sold for a fair price?? Just name one... and if you can't then perhaps you can dampen down your negativity and gloom posting.

Agreed, hence I think it best to await the merger conclusion and then see what cash SOLG have left. I think that's the reason why the sp is going no where fast and why several involved have arbitrage trades in place (shorts). Post merger, SOLG might have $80m+ at best. Or they could have $60m etc. All depends on who wants shares vs cash and how SOLG wants to go about it up to 20% level.

$50m is ring fenced for ENSA so to do some exploration in 2023 while they seek. buyer or asset sale for ENSA (my assumption pending SR), they will need to raise another $25m+ is my guess. Much depends on the companies ambitions for doing exploration and the their appetite or skill at doing partner deals with interested parties like Solaris, or Lundin or Codelco or Chinese. Plenty ops out there to get those 50 odd licence blocks moving in right direction.

Current issued share capital is 2,476,051,501. For sake of round numbers and some cash payments on merger instead of shares lets go with 524m shares to be issued post merger and 26m shares paid in cash at 16p.

That gives us 3bln shares in issue (options lapse or get added so lets them out of it). Then take the circa 5% CGP SOLG shares (diluted) and let's say they go into treasury. So that's 2.85bln which is what I was indicating.

Market rated SOLG at almost £900m not long ago, so lets us that as a top benchmark. Take 15% of that equates to £135m, add in 5% shares worth around £30m, and that's close to £165m in 'merger' worth. If the idea is that CGP will hold approx 20% of post merged SOLG company, then take the £900m I mentioned above and x 20% = £180m.

Throw in the 10% premium for the consolidated 100% ENSA interest rather than fragmented, add in the $85m cash raised and bingo, you are not that much shy of £1bln which is around 33p a share diluted.

So that's the bulk of it... what was once 42p levels (the high) is no 33p. So I think it's fair to say that if at 42p the market was expecting a double on fair value (84p) then the same double on fair value now would be 66p.

All in all... not ideal. But I think Maxit are capable of getting a high 30's bid tabled which at end of the day is a starting gun for BHP and others to counter. If they don't... then it goes for 33p. Majority of NCM, Norges and BHP will be in profit based on 33p but not much gained. Hence I think most would want at least 50% premium to that especially considering inflation of late.

addicknt,

I thought the projected shares in issue were circa 2.8bln with CGP gaining 550m shares??

SOLG previous 'market' valuation was between 18p and 44p based on a 3 or 4 year trading basis. It was also based on 85% ENSA interest and excluded the 6.7% (approx) CGP SOLG holding.

The extra shares in issue for the merger and recent funding round should be close to neutral and have no effect if you assume that the 15% ENSA interest was approx what CGP were valued on in first place inc the 6.5%.

You can't just look at the shares in issue number and then ignore the minority ENSA acquisition and stock in treasury. Also, some would say that by holding 100% of ENSA it simplifies the selling and potential takeover process so an added premium compared to prior should also be included.

All in all, the market is not reflecting anything other than pure boredom at present. The market is a woeful valuation tool so do not rely on it. The market rated Noront at 23 cents. It sold for 110 cents. Markets are pretty poor at doing proper asset valuations. They are good at spread bets, shorting, CFD's, algo bots and all the other casino bookie type things.

Risks diminishing with every week that passes.

There isn't one Tier1 mine out there that I am aware that remains on the shelf gathering dust.

The clock is ticking based on red knights post yesterday of the exploitation licence being sought or signed.

Tier1 mines of Alpala standard are rare. Tick tock.

So lets have a little yearly review of what some on here were flapping about...and scaremongering...

1. Fears of liquidation and administration... the worlds going to end type stuff. Some said royalty stream impossible. Some said large cash raise impossible. We were apparently in a very tight corner, up a certain creek without a paddle. Doomed some said. Game over.... what a shambles.

And... what actually happened was??? Ermm.. We got a royalty deal for $50m. We got a funding round with strategic investor for $35m. No fuss. No stress. And the market's fears dismissed.

2. Then we had the AGM... the last few years it's been tight. SOLG have been handcuffed by NOT being able to control the issue of shares without first having to please BHP and NCM et al. Directors jobs on the line etc etc. SOLG was being bullied by two large shareholders to the detriment of the greater shareholder base. SOLG were weak due to their 'controlling' hand.

And .... what actually happened was???? Ermmmm.. SOLG pulled a rabbit out of the hat. Put BHP and NCM back in their box and in doing so have taken control of SOLG for greater good of 'all' shareholders. All resolutions passed for the first time in years. terrrrifc!

So how does SOLG look compared to how SOLG looked in Dec 2021? Do we look in better shape now? Are we closer to a takeover or asset sale deal?? Are we fully funded?

The answer is simple,guys.... despite all the negative noise on this BB by a handful of posters.... SOLG are indeed in the best shape we have been in a long time.

Just a matter of time before the Share price catches up with that reality... oh and the small matter of arbitrage trading pre merger keeping a cap on things. Just wait until that merger is concluded in January... then they'll let the handbrake off.

Enjoy your festive break and don't waste your time posting on these BB's. Spend it with family, get out and enjoy the fresh air. Life's too short to be waiting for cabs to come off ranks. It will happen when you least expect it... be sure of that. That's how M&A works.

It was never in doubt for the reason I mentioned. The Chinese, CGP and Norges voting weights made it a shoe in which is precisely why they did the Chinese placing before the AGM. All these measures taken by the 'new' SOLG are to protect shareholders from likes of BHP and NCM.

Some serious flappers on these BB's these days and I'm beginning to think the scaremongering and unwarranted stressing is deliberate. Those involved should sort it out, it's embarrassing.

As far as I'm aware the last time BHP and NCM sought to have Nick removed as a director, they failed but achieved his resignation as CEO. The last time the votes were held on a 'disruptive' basis, BHP and Newcrest plus Blackrock held over 32%. Throw in the likelihood that CGP voted with them too and that's nearer 39% in total and Nick still survived that one.

So based on the known facts that CGP and Norges voted for Nick, that's at least 10% swing in favour of Nick being retained. Blackrock as we know have dropped below 4%. So that's another 1% gone.

Then you can throw in another 6.3% of chinese votes that were not there last time around.

Seriously guys what planet are you lot on??? You have a benchmark from the last time BHP tried this. You know that Nick has secured more than a 17% swing in his favour since then. There's no way PI's voted to oust him and likely voted as they did before.

So based on Chinese, Norges and CGP all known to vote for Nick... I think we can safely say that you are worrying about nothing and it is about as close to be close as Harry and Megan are to being brought back into Royal duties.

Sort it out!

"fast and smart" indeed.

Yep, good find and now the clock is ticking!! Any super major really won't want to hang about now as every week is a potential profit week in future years.

Game on.

DBW, I get the feeling that NCM and BHP have been completely put back in their box. They no longer have any major influence and what they did have will be diluted further post merger.

The bottom line is this... it looks like they couldn't be @rsed with doing the basic TR1 filing requirements and they couldn't be bothered voting at the AGM.

FWIIW, I think BHP decided back in June/July (when the newspaper reported a possible SOLG buyout deal) that they would not go for SOLG and instead went for OZ Minerals. After BHP's move for Oz Minerals, everything changed. SOLG's SP headed south, and CGP/Mather et al kicked into action with merger.

You can't rule BHP out at all and if Chinese off 30p for ENSA then BHP might counter that or another out there might come in, but I just get the feeling that BHP are no longer interested.

Looks like we know who the 24% was lol!

Decent wedge for this time of the morning

Roll on AGM.

So I was right then? There's a chance that some CGP holders might want only 80% take up and the other 20% in cash??

On that basis, and assuming around 550m news shares, that would result in 110m (approx shares) being paid at around 17p a share. So that's just over $20m. On that scenario, we'd only have around $15m cash left assuming burn through rate modest and $50m SR is for ENSA alone.

$15m would be enough of some exploration but not much.

I'm beginning to wonder if Maxit have in effect already sold the 23m shares the took on to other interested investors. Might explain the 2 x 12m share blocks a few days ago. In effect they underwritten placement possibility to meet TSX rules and obligations due to the 20% cash requirements on merger deal.

Nothing major to worry about, just mechanics of funding/money washing through. But we won't know until post Merger how much cash we have left from the recent raise which is probably why we've been pegged at 16p. The shorter involved will be more than happy to close out issue of new shares issuing they are CGP holders. So they instantly secure their cash beyond the standard 20% offer.

Not sure there is any other way SOLG could have avoided this but they have effectively thrown the share price to the wolves for now until Merger deal concluded. Again, another example of poor work by Maxit I'm afraid. I'm not too impressed with them at the moment. Weak equity issue and weak pre merger management. Still... no doubt suits them! Volume died down considerably now so we must assume that all are 'positioned' awaiting outcome of the next 2 weeks.

So let's assume 20% paid in cash. How much is that?