Member Info for Fortissimo

Sean - fear not. VWAP games under way. The longer they pin it to 16p the better the 90 day VWAP. It's heading sub 21p soon. Most offers these days use VWAP as benchmark to accompany their offer price to make it sound like a generous deal. eg, 42p would be a 100% premium to the 90 day VWAP.

About 6 weeks ago, the VWAP (90 days) was around 28p I think). Hence that's 56p for a 100% premium headline. Big difference to 42p.

You can see the controlling hand on the book as the largest chunk on the bid is always stacked around 16p regardless whether the sp is 16.7p/16.9p spread. That higher block volume on the bid has not budged for a while now. That's how you know games are underway. My guess blackrock... but lets not kick that off! They are of course entitled to do what they like. They've been busy on Capricorn too post Tullow deal / counter offer.

Yes SOLG must soldier on with PFS2 as it lays down a marker for value pending any offer / sale talks. But DFS?? Seriously... if post the strategic review, SOLG elect to put the asset up for sale via an auction process or something along those lines, then there's no point in spending another $50m+ getting to DFS. Any buyer whether PE firm, consortium or supermajor will simply rip up SOLG's PFS and stick it in the bin! That PFS is for cash strapped companies wanting to take on a project that's way too big for them. Should BHP win on a auction for ENSa or SOLG as a whole, then their PFS will likely be double the size of SOLG's. You'll be looking at double the Capex but triple the profits. It's always been an asset that attracts 'scale'. It's a volume business when you have around 0.7% PM's pt. You won't get BHP labouring over 0.2% CuEq on low volumes.

Assuming the company needs cash to see them through the sale process (6 months) then the 6.7% CGP holdings in SOLG should suffice. Another $50m+ for DFS is just waste of money. They can spend or raise that should they not find the sale/auction process fair value.

I'd like to see the next RNS that arrives heads up with 'Suspended' pending offer talks. Lock out anyone on sidelines and reward all those with current skin in the game. Then commence trading again when offer announced hopefully around 70p+.

The best xmas Mather could deliver imho but bidders can get ahead of themselves and bid way past 70p+.

Did I miss an RNS somewhere outlining the date for CGP shareholders to vote on the merger deal??

I noted that Darryl mentioned the end of Q4 2022 target for the deal to complete. That would be pretty impressive if they met that target. I guess the lawyers and usual paperwork stuff needs putting together along with prospectus and delisting timelines etc etc. But in theory, if the scheme is to be signed off before year end, they really need to get a jog on and set that date. Unless of course someone at BHP towers put a call in and said... hold your horse... we might have a better idea!

Interesting to note that BHP and NCM were very vocal when we did a royalty deal of 1% with Franco.... real toys out of the pram stuff. But when we effectively hand over 20% of SOLG shares to CGP, dilute the back @rse out of them both, stitch them up in terms of their games.... they are quiet as a mouse lol! The silence is deafening... but there is lotta steam coming out of those BHP towers!!

CGP / SOLG need to get a jog on and get that CGP shareholder vote meeting sorted pronto.

A small change to them name would be fine.

SOLG

to

SOLD

6.8% is a decent holding size pre merger but drops to 5.4%post merger. Whatever happens, it's 157m shares to play with that were not available before. 157m x 25p banks about $43m cash. There's no way any interested party could acquire 6.8% at sub 25p imho. They might get 1% or 2% below 20p but once through 22p, the sp would move fast into the old trading change of 24p to 28p. Norges did well to pick up close to 4% at around 29p average I think. But that took them well over 12 months. Trying to gain 6.8% in open market prior to AGM nigh impossible. So yes, a premium should be baked in for that kind of wedge. It's effectively 5% of ENSA. Assuming a profile along lines for Franco deal, 20% IRR, that's about $100m value imho. Mitsui would be happy with 5% ENSA for $43m! That's a bargain.

My only issue with Mitsui, is that they have a clear relationship with BHP so looks like a way of keeping BHP in the game. Lets assume Barrick come forward and say to Mitsui... we'll give you xx for that 5% stake blah blah blah... due to BHP releatonships, Mitsui far more likely to be under pressure from BHP to hand that 5% over to them. Or existing relationship with BHP on other projects might become tricky???

Not sure if Mitsui are involved with Fortescue or Rio or Wyloo or Barrick etc.

There were never any funding fears, and that was clear from SOLG's messages. The market still has concerns as the share price has halved, but much of that has to do with wider market depressions. Many other stocks have halved too.

I guess the difference between Mitsui and say Barrick is that if the latter took the 6.8% (soon to be 5.4%) then in effect the 'hat' would be firmly chucked into the ring. What's the point of that when there's more poker value in waiting in the shadows???

It's been enjoyable watching this all unfold and seeing how some have had nerves tested, others more confident and so on. During all of this... nothing has changed with ENSA. It's world class attraction remains the same. Copper projections in mid 2025 / 2028 the same.

For BHP, the usual benchmark for value is the WVAP when making an all share offer. So the longer they wait and the longer SOLG are sub 20p or even sub 25p, the lower the 3 month VWAP. It currently sits at around 24p I think. It was 32p a few weeks back.Likely to be nearer 20p if sub 20p during bulk of October.

Pitch an offer at 100% premium to 90 day VWAP and that looks good value to most market players. That's currently 48p.

Sorry about predictive text... so annoying! Tenstar and Norges.

If we assume post CGP deal that there's about 45% in CGP/Mather hands with tensor and a few others.Then you have BHP and NCM around 11% post dilution. Blackrock and forges near 9% combined.

That's 65%. Add in 20% retail investors and that leaves just 15% II's or HNWI'sor HF or FM's etc.

So although 20% sounds like a smaller number it's actually more powerful than it sounds in context of all shareholders.

Numbers are approx so giver take 5%here or there.

Good to know Darryl and team understand or have been forensically inspecting their shareholder numbers lol! Anyone might guess they reweighing up their chances at the upcoming AGM lol! I think they'll be desperate to get the CGP deal concluded before the SOLG AGM and bag that 20% voting slice. So much better than the 6.7%.

I think the general consensus is that any takeover of SOLG will value the business on ENSA and the rest of the business will likely go for next to nothing if a full bid made. They are trying to add value to porvenir and boost value of ENSA through Tandy add ons but it's not going to be mega millions. They might add in £300m or so. Not bad.

Here's a question for you redknight. If you were a super major or a player like Mitsui - what would you pay for a 15% stake in ENSA (based on mid case PFS2)?

Franco paid $100m for a 1% royalty and that was based on 85%.

"4 His, DGR and Tenstar holdings are being diluted by 18% by the merger..." END

Yes, but the value of his holdings will go up as SOLG will be getting 100% pay cheque for ENSA rather than 85% pay cheque.

There's dilution.... and then there's accretive value.

I would wager that the extra 15% ENSA is worth more than the dilution in SOLG ownership.

They do, but they are not as advanced as SOLG. I think they were cited to deliver a MRE1 on Bramados but sunstone also involved so who knows??? Unclear what liabilities come with CGP but looking at the business at a glance, it's the ENSA accumulated costs that are the major debts and that's irrelevant to SOLG as these costs will be passed on to the future buyer of ENSA or funders. SOLG were never going to get to a position whereby they would force CGP into that $3.5m buy back clause but some other outfit could have squeezed CGP had they bought SOLG before CGP merger etc etc.

Be interesting to see what bonuses or options the new CGP directors get when they come onto the SOLG board lol! I'm betting there will be a last nest feathering exercise before a full sale kicks in. Management rarely miss an op to line their own pockets before the final sell out.

I think we'll hear this week from CGP on the shareholder approval meeting day but would guess it would need to have 21 days notice. So end of October. After that... who knows. If they have already worked this all out over last few weeks, then could be a swift conclusion and merger as not complicated. Delisting from TSX for CGP required too and think that's 30 days. Will be tight to get the new voting power in place before SOLG AGM.

Will have to wait for CGP's RNS and see what info is in there. I can't see them hanging about.

Still think there's a chance BHP might make a move before the CGP meeting date. They can offer CGP shareholders a better deal and try and retain their 13.6% stake but by doing so they effectively commit to buying the other 85% of ENSA as they run the risk that someone else steps in and leaves them high and dry with a minority 15% ENSA stake. Bit chicken and egg and probably explain why BHP never made a move for CGP. It was just too risky.

rcgl2, I think you're missing the point. It's not the instrument or the fact that's it's blackrock at all. None of that really matters. It's the 'timing' of it. Blackrock don't go through thresholds that often and in my experience, when they do... it's either before or after a key SOLG event or in anticipation of an event.

They were acting buying back or the 'shares on loan' were being bought back last time in the mid 30's when I think the sniff of an ri was coming.

Focus on the timing of their efforts and not the instrument or the fact it's blackrock.

Unfortunately for them, I think they didn't see the Mitsui or CGP news coming as Bothe events (although Mitsui unconfirmed) happened after their trading.

There's a time and place and purpose to deploying that 0.5% or 1% that they use. And they usually deploy it at key times. One would assume to there advantage. Focus on that.

BR clearly didn't expect the Mitsui or CGP news. Whoops! That's going to cost them as looks like the normal instrument they use is to loan stock out eg shorting. They might have added a further amount on the 7th too as won't need to declare until 4% broken. They usually have. play around in the 4% to 5.5% level.

So it was blackrock that was keeping the price at around 16p on the 5th/6th October. Looks more like their usual 'instrument' trading so basically capping price and preventing a rise. Unfortunately for them, Mitsui potential news broke after their trading late on the 6th and then house we had the news that Blackrock were not expecting... CGP deal on the 7th. So might explain the slap down from 22p to 17p as Blackrock try and regain some control. Looks like even Blackrock got it wrong. Could be a strong turn around should buyers give them trouble and there's loads of reason to be a buyer now and les reasons to be a seller at these low levels. Overall, it's minor.

One thing worth noting is the clear and present relationship between Mitsui and BHP on a number of projects. I guess out of all the companies out there like Wyloo, Fortescue, Barrick, Lundin, solaris and so on.... Mitsui might not be that bad at all. Not ideal for BHP but better than having any of the other lot involved.

So perhaps there's some 'stroking' going on as well as a few jabs and the recent CGP upper cut.

If you want top dollar, then you want an auction so important to not send all the big players packing too early in the game.

Someone very clever is behind this. If it's Citi... then about time they earned their fees.

Lots of talk of BHP but not much of NCM. I think most suspect they are now aligned with SOLG shareholders as past ambitions of taking out CGP look long gone. So NCM look like they are after same as all of us. The best cash deal possible. They've been stitched up by Wyloo on GGP, and have a chance here to be a king maker or key piece in the battle. They could agree to see their stake to BHP for XXp. That would give BHP just over 20% post CGP deal. And around 19% post a further 5% dilution on equity raise (CGP treasury shares).

There was a time not long ago that CGP, Blackrock, NCM and BHP controlled around 39% as combined interest in SOLG and 15% ENSA.

Now you can see why Mather was so keen to get CGP to join forces a couple of years ago. The dynamics shift on a large scale with the CGP merger. Suddenly BHP and their support posse drop from 39% to potentially as low as 22%. Almost halved!
That's one serious loss of power and that assumes NCM and Blackrock are still in the posse.

But when you get into the sale process or bid process, then you are talking about 'price'. No one is friendly anymore. Blackrock will want top dollar. NCM will most certainly want top dollar and more than the 45p they paid some years ago.

Bring in Mitsui with 6.7%+, throw in Norges with close to 4% and that's two holders there that will outweigh BHP on combined basis. Mather, DGR, Tenstar and now CGP will control nearly 35%+ post dilution.

When you have shareholders of the size of Norges involved, potentially Mitsui... these guys can make low balls instantly no balls. This all bodes well for a fair and top dollar price for greatest tier 1 copper/gold discovery in decades. World class assets don't go cheap as Irwin recently tweeted. Good to see him and others now firmly on the front foot PR wise.

Your move BHP... lets see what you've got!

Tesla1,

You obviously don't understand how the CGP changes everything. But not a surprise. Try and understand the handcuffs on share issuance. understand the benefits of extra friendly BoD's. Understand the weight of an extra 20% shareholding (friendly) Understand the importance of seeing BHP's and NCM's holdings reduce by 3% or so each.

You really are a bit thick.

Big move up for Mather's DGR.

https://www2.asx.com.au/markets/company/dgr

Last time DGR were near the 0.7 cent level was mid to end of June 2022. Which aligns with SOLG's sp move to test 35p. Aligns with Blackrock buying and Norges. So something was lined up around 3rd week of June as DGR and SOLG were both looking strong.

Fast forward a few months and DGR / CGP looking lively yet SOLG dragging its heels. Might be due to ARB trading but get the idea SOLG should be mid 20's in no time especially as initial market reaction on Friday was to nudge it toward 22p. After sellers of the cheaper stock (acquired at 13p/14p levels) exit, then it should get a motor on.

The CGP deal effectively stitches up BHP and NCM (although I think the latter are ready to exit at right price). So in theory, the best BHP can do is offer CGP an alternative. That in turn then triggers the likelihood of a bid for SOLG as a whole as 15% ENSA is not worth much to BHP without the other 85%.

Far safer for BHP just to wait it out and once SOLG have 100% ENSA (about 3 weeks time post CGP meeting) then make a dart for the business.

At the moment, BHP and NCM are on track to see their SOLG control and ownership drop to just above 10% and even further if SOLG issue the 6.7% CGP shares to Mitsui or another.

IMHO BHP might well offer SOLG shareholders a 'better deal' and throw that out there to scupper the CGP deal.

Exciting times ahead and SOLG firmly in driving seat. IN Mather we trust. I said he had a plan and he's not going to let his baby go on the cheap. Not going happen.

Also remember, that the AGM is fast approaching and could be as early as end of November. At this AGM, SOLG will IMHO be putting new resolutions to the vote. One of which could be to issue shares without the same presumption rights as before etc etc. In simple terms, the shareholder base changes dramatically once the CGP deal is done. NCM and BHP drop down to just over 10% each. SOLG friendlies (inc CGP) increase to nearly 45%+. That's almost a shoe-in for all resolutions assuming shareholders understand the reasoning behind them.

Suddenly the handcuffs are off and SOLG are no longer backed into a corner or being bullied by their super major shareholder.

SOLG pretty much secured all BoD's future by bagging the bulk of the votes.

Valuestone, Matsui, Boliden... loads sniffing around with interest. Darryl told you months ago... funding is not a problem. We have plenty of options. Looks to me that BHP's attempt to play hard ball may have just cost them a lot more. That will teach them. Losing to Wyloo no doubt still smarting. Lose solg to someone else and BHP shareholders are going to think Bristow is looking a bit old and tired for the future of BHP. Biswas also looking weak after getting a wyloo shoeing on GGP.

Love it.

addicknt, they just got 15% of ENSA. I'm sure Franco or Boliden would be interested in doing 0.5% (which could be bought back with interest) for $50m. I think the days of worrying what BHP and NCM think are well over. That said, when Mather made a bid for CGP in 2020 (wasn't it) we didn't hear much from BHP/NCM. Mind you the deal looked a non starter based on CGP's reaction.

Anyway, I think monetising the asset rather than diluting the likes of Irwin and Mather is priority now and royalty stream deals is a form of monetisation. So I think that's back on the table. Possibly starting with Mitsui or including them. Mather might have agreed with CGP, that the merger deal is based on the merged company having 12 months to get DFS sorted or just 12 months to get a deal done. I have no doubts that CGP will have a private agreement with Mather on timelines. There's no way they want to be stuck with SOLG shares for another 2 years or more. No way. They want their pay day. They have waited a long time and are not getting any younger. I don't think these guys would blink at giving away 0.5%. Of course that would rattle BHP again. If the want to draw BHP out, all they need to do is keep tapping the asset. Nothing BHP can do about it. Apart from make a fair and honest bid.