Member Info for Fortissimo

The reality of working in Ecuador on a permanent basis is clearly having an effect on some and understandable as many were Oz based and relocating family etc not always ideal for all.

The CFO is an interesting one. Either she feels she 'hasn't' got the freedom that she feels she should have (eg Mather still running the show) or she realises or knows a bid is coming and it's pointless her being there.

Eitherway, it's looking more and more like a 'for sale' sign will be hoisted very soon imho I have a straneg feeling about this but actually think Mather and his buddies might be angling for this. Perhaps Mather knows that he has up to the AGM to get something sorted or he's toast. Most directors (of old) that were on the board are now gone.

BHP will make a move when they need to make a move and see the time is right. There's no way SOLG can finance Alpala without the likes of Franco and others chucking $1bln in for starters. Franco won't be doing that for free. So Talatum, do you really think BHP can wait until SOLG are a producer? By that time there won't be much left for them. See the bigger picture.

I think the OZ minerals approach is a very timely bit of M&A for us SOLGers. Noront was a nice example of how a stock can trade on very little volume and flat line at 23cents only to burst into life on a bid from BHP. OZ Minerals much the same. Unwanted and struggling with share price near yearly lows and then boom... BHP make a bid. Now SOLG are not a $6bln acquisition nor are they a $700m job either. It's somewhere in the middle circa $3bln imho. So OZ Minerals will be very interesting to watch and see the twists and turns. Are BHP using this bit of M&A to test their competitors? Will it (whatever the result) make them think differently about a bid for SOLG. Should they win Oz Minerals over, will they then add SOLG to the folio or does that open door to NCM? Or if they fail on OZ Minerals will they make a dart for NCM? I just get the feeling that BHP have an M&A plan and map and this is the first domino to fall and we'll soon see what happens after this one plays out.

I'm off to make a fantasy trade on Oz Minerals which I just sold guys at $25.5 a share after buying at $6.6 in covid downturn. Well happy with that hindsight trade. Oz Minerals for trading... lol!

Mathersfinger, not sure I understand your near term vs a buyers view? A buyer of SOLG will be looking at the likely development costs over the next 5 years which if we are heading into a recession will certainly be nice and cheap. By the time the globe recovers and the green army are back on track, we'll see copper into the $4's and $5's and $6's before 2029.

I think you misunderstand M&A. You don't want to buy assets when miners are booming and all is bullish. You want to buy when investors are nervous and thinking a 'bird in the hand is better than two in the bush'.

The price that wins is the price that shareholders accept and that's the bulk of it. Norges and black rock haven't been buying at 28's and 35's to hand over their shares for a pony 35% return. They will want 100% return. You have to remember that SOLG's assets are likely to be producing when there is a huge copper demand and deficit. Talk of recessions are for producers of today to worry about.

Oz minerals share price jumped to $25+ on the news - so market thinks the final offer will be higher.

On a similar basis, if SOLG had a 29p offer, it 's not going to fly on the basis that NCM and bulk if II's are holding stock with averages near 26p to 30p. They won't be selling for that. Most that took the placings over the last few years (in the mid 20's would have done with the firm belief that doubling their money to 50p+ would be a worst case scenario.

I would expect the opening bid for SOLG to be around 40p level and then either go for another 50% to 60p or 100% to 80p.

OZ minerals closed up at $25.6 based on that $17.67 bid offer so looks like the market already thinking $25 to $30 more likely.

Our time will come.

Low ball indeed, but I suspect they fully intend to work their way higher. They started low ball with Noront too at 55cents and moved to 75cents. Will be interesting to see if they move up by 40%+ again. I suspect $26 a share is where it's likely to end up.

going to be interesting to see how BHP move their opportunistic bid higher and whether someone else comes into the bidding process. Like Noront, going to be very interesting to watch this one unfold.

Business is business and low ball offers at opportunities times is clearly the way to go. But will they lose out on this one too?

https://www.smh.com.au/business/companies/oz-minerals-turns-down-bhp-s-8-4b-takeover-offer-20220808-p5b819.html

Highly opportunistic! Mmm... think we are seeing in black and white how BHP work.

Great news indeed. Looks like it really is prime time to make bids. BHP have a habit of making darts for companies around summer period (northern hemisphere). Their Noront bid first landed on 27th July. Are they 'seasonal' bidders lol!

M&A activity tends to start with the large majors and there's a domino effect across sector as the big boys play their cards in race to benefit from impending copper deficit.

what a space of waste!

Bit more beef on the bone from Darryl re some shareholders not aligned or in agreement regarding the 'structure' of the finance. Perhaps it went like this... Boliden to deliver $100m for royalty and funds ring fenced to ENSA and equity placing for $40m for Porvenir and exploration of other regional targets. Identical to last year? Now we know that was never going to fly with the big two so I'm doubting that it was 'structured' that way. But what about a flip on 'structure'? How about $90m equity raise via big holders and some bones thrown to pi's at 22p. Then $50m from Boliden or Franco on royalty basis (as before). That's weighted more to what the majors were after but not wholly an equity raise so manages some dilution.

Again... I doubt that would fly. But at some point NCM and BHP need to realise that they don't own or run SOLG. Majority of shareholders don't want huge dilution. So it's fair to tap the asset equity rather than the shareholder equity. If the big two don't like it, then like I said before... just offer SOLG the $50m that they could have got from streamers at a share price that's less dilutive. 35p might be fair.

At end of the day, if the big two are pushing for a pure 100% equity placing then it needs to be at mid 30's imho otherwise the royalty deal looks better for majority.

Finally... 'structure' could also mean a 5% wedge going to a new entity as per cash box and perhaps BHP and NCM didn't like the fact that they were not getting as much as Norges (my hunch!). They wanted equal treatment / balanced structure to the nice cheap shares.

red knight - there's no such thing as a floor under the price with SOLG as it's a minnow pretending to look like a super major. Like I said a while ago, investors are now more concerned about the dilutive nature of a $3bln Capex project which will inevitably involve an equity/shareholder component and likely some CB's and other bonds. It all gets messy.

The only way they can stick a floor under the share price is to do an RNS that says they are launching a strategic review with an aim to sell an asset, assets or entire business. That will sort your floor and might even punch a whole through past ceilings. Get it done SOLG as this is like watching a pair of bullies poke a cornered animal.

Totally agree RCGL2, but what if the big two investors said to you... do another Franco or Boliden etc and we'll take you out at AGM or possibly before and you won't get a chance to deliver PFS2 or Porvenir PEA. We'll make a bid and it will be low ball.

This is biggest issue. The big two want a dilutive equity raise and they want to force SOLG to do it at a low price. They hold a gun to their head on both issues as SOLG are desperate to gain another 12months so they can generate more value across the folio not to mention derisking ENSA.

It's clear that this was the big issue last time around and nothing has changed apart from the fact that they supposedly have CGP on board this time around.

If Darryl has said they have enough cash to see through to year end then why not just do a minor raise of $20m which buys them another 3months or so into 2023 but like I said... if they add $500m or $1bln to the PFS2 and Porvenir PEA is great then they can raise another $50m in spring 2023 and that should see them through to DFS.

We don't know the level which 'they' tested the market but $40m has never been an issue before. $100m might test some and demand a lower price but why go the whole hog> As I said, the lower the sp, the less likely an equity raise as it no longer presents shareholder value unless of course Franco and Boliden are no longer interested in taking a slice and I find that hard to believe.

NCM and BHP didn't like it when Mather escaped their clutches and delivered a terrific Franco $100m deal. They were spitting bullets. But this time around, instead of playing nicely and doing what you would think..... being supportive and keen on an equity placing at a reasonable price... oh no... the big two want a raise done at much lower price. They want as much as they can get. And the lower the sp goes the more likely SOLG seeks an alternative which they all know will have the two majors shareholders out for their blood. So management (who should act on shareholders behalf) are likely to go with the option that secures their jobs. Perhaps behind the scenes deals are being done to ensure NCM and BHP sign up to voting all directors back in come the AGM in Dec??? There's so many ways NCM and BHP can stick the knife in and SOLG's weakness is the BoD's who quite frankly are now fearing for their jobs and nice salaries. Considering the time to get an asset sold is about 6months +... I really do think their best bet is to action a full sale auction of the business now. It's pointless trying to work with NCM and BHP as both are not friendly and do not want the best for the company. They just want the assets.

Do a deal with Boliden for $50m and stick two fingers up too the major shareholders and just tell the media that both were not interested in doing an equity raise at a fair price. Then produce PFS2 and porvenir PEA in October/November and hoist the for sale sign up pre AGM which would secure their jobs as pi's and others vote them in so they can get best deal for all.

redknight1, why did you buy back 106K?

redknight1, appreciate your forward looking concerns regarding cash spend before end of 2023 or might be 24 due to covid issues. But at what point do you draw the line? As in 2023, surely you'll be saying the same thing about the impending $3bln+ required to move from DFS to full production. Do you stop at the likely $200m or so for the block cave pilot mine shaft tests in 2024? Or the $500m required for the build 2025/26 phase. Then we have the $430m required to be spent simply just to retain the 60 block licences.

I think it's fairly obvious to all that once SOLG get to the end of this year and deliver PFS2 and Porvenir PEA... there will be a deal on Alpala done. Could be an IPO or JV or sale etc but I wouldn't worry yourself with funding commitments through to 2023 end. It's the next 4 to 8 months that matters most and after that they really must or have to get some monetisation done as there's no way they can afford to hang onto those 60 licence blocks for $430m spend and all the other costs. It's a fecking joke and reality is a tough pill to take but it's being swallowed by Mather and Darryl et al on a daily basis and will be so for next 4 months with a critical dosage given out at the AGM I suspect.

A small fund raise at 20p to see them through to PFS2 and Porvenir PEA is all that's required. If they add $1bln+ to Alpala through that process then they should command a much higher equity price if seeking larger amounts of cash for the full DFS process. It's almost like we are back to where we were pre PFS1... with the idea being to raise cash after that good news dropped and sp had strength. But now it looks like PFS2 will be the catalyst that derisks the asset further and should secure better value finance for DFS. Basically, you don't want to raise too much cash at a low price as it's overly dilutive especially when the purpose of it is to bolster the share price. As Slug said a day or so ago... you end up diluting to raise cash and then deploy that cash to raise the share price and end up in some middle ground achieving zilch. Far better to phase the funding requirements in based on milestones reached a project being derisked. That started with PFS1 and should end with PFS2.

Redknight, are you sure the $430m is for ENSA alone? I thought it was a summary of the 60 concessions which required minimal $7.5m spend or they have to hand the blocks back.

I also understand that due to covid, commitment timelines have been extended.