Member Info for Fortissimo

I think the Lamprell debacle put some reality back into the sector near term and that's known by the market so no surprises on the 6 monthly update... we know it's not pretty but the sale agreement covers any debt concerns. In the absence of that asset sale, the market and the bond/debt holders would have crucified Wood Group. It would have been another carillon in waiting with all value going to debt holders and share holders keeping 5% max.

What I don't understand is why the market is heavily marking WG down now that the asset sale has been confirmed? It just doesn't make any sense. I understand that the short term view is that 'there is nothing to see here for 4 months' mantra. In other words are we just seeing the usual summer lull and drift with ugly market backdrop brewing... then come Autumn we see the value of the asset deal start to be priced in? Based on that... it's a bargain to hold at 160's when in 4 to 5 months time it should be 260's minimum and 360's next year based on better inflation protected 2023 order book.

I always thought that a company could not sell off it's prime asset (value wise) and avoid full takeover rules. Rules are in place to protect shareholders from 'cherry picking'. Not sure if it applies to SOLG but think they'd have to split the business into various parts before being able to do such a transaction. The liabilities (currently) that rest with SOLG as a whole are close to $420m across the full folio. These liabilities are based on $7m spend (approx) per licence block within a set period of time. SOLG have 60 of these remaining after relinquishing 10 or 11 last year.

It makes sense to discuss Porvenir and other blocks in the south with Codelco, Lundin and Solaris as they are all in control of the infrastructure hubs in the region which effectively control the economic transportation of all production. Whilst infrastructure is better in the North, heavy Capex pipelines and other requirement are needed before that can be another major mining hub. There is a common sense and economic reason why SOLG should look at splitting into two or 3 parts. based on reorganisation of folio on a regional basis. I believe this is what they are close to announcing but need the new lady to work it all out in best possible way.

SOLG has 5 subsidiaries. (In order of current value)
1. ENSA (flagship in Cascabel/Tandy/Moran)
2. Green Rock (Porvenir + 4 other priority targets)
3. Carnegie Ridge (Rio + 2 other priority targets)
4. Cruz Del Sol (4 priority targets)
5. Valle Rico (one priority target - Salinas)
Total targets = 13
Drill permits received outside of ENSA = 5
Awaiting drilling permits = 8

We know via PDAC that Barrack and Rio are interested in blocks and Lasso is doing or has done an MOU with Barrick. What we don't know is what blocks or licences this includes in the absence of the mining cadestre.

So one assumption could be.... some of the SOLG targets awaiting drill permits might well end up as a drill ready pack to JV farm out. But in current climate... permits are all that matter and they don't get handed out very often and when they do, I believe they trigger a minimum spend of $7m.

So watch this space. The new lady is not coming on board to sort the board room flowers out. She's potentially there to restructure the assets ready for sale or JV. Well, that's the way I see it. Lundin and co would obviously be interested in Greenock. That goes without saying. Makes sense to SOLG too as better economics across that southern region with more mines sharing infrastructure.

These events happen regularly in Ecuador and the reason for the fall in share price has very little to do with this in my opinion. More to do with wider markets and the fact that SOLG were almost invincible over last few weeks while rest of market fell apart. When the likes of Blackrock or Norge Bank take their foot off the metal and hit the breaks, that buy volume or lack of it is soon felt. But both these large entities were strong buyers in the 33p to 35p levels and that's where majority of the big orders get printed. Getting large stock chunks out of pi's hands is not easy but moving the price down 15% has certainly got a few handing them over.

New CFO starts next week. EGM at end of week. News likely in-between and then we start to see the sharp end approaching fast. Ironically, the market position right now is perfect for a BHP bid or Twiggy gina type entity. Pitch an offer in the right area and they might get a bargain as battered investors decide to cash in chips. When all is well and bulls are singing, you really don't want to be a big M&A buyer. You want to be a seller.

If someone like BHP acquired a 29.5% stake or rounded up to 30% stake, then they are forced to make a bid. So 30% level if often seen as a 'change of control'.

'word' should read 'board' on last post. Further to that post, if the incentive scheme is to attract new talent ahead of development then in theory it becomes a P45 security bonus. It limits the company's ability to explore JV's or another asset deals that fall under 50%.

In short... you get your awards only on an asset sale or deal that sees the board 'lose control' as no one will do a deal on a 50 : 50 basis. There's always someone that requires control and that's major number is 51%.

Weird one as it kind of incentvises management to self capitulate to gain their awards as if they vest on 51% going to another party then it's 'loss of control' for them. I can see why SOLG thought 30% was better suited to this point but also see the dangers that they could farm out or JV and retain 70% interest control yet still bank the awards.

So to be blunt... I suspect it's BHP and NCM involved again and they want the word to be incentivised to hand over the keys! I guess we all do really! But at the right price.

It has been well over a year since SOLG announced opening the doors and data books to strategic partners on grass root licence blocks as well as some more advanced concessions. Is 12months+ too long to sit for such deals? I would sit on the fence on that one. I think they will unveil a plan along with JV deals soon. EGM next week, then news flow starts again. Looking at past EGM's and AGM's SOLG do seem to have a habit of releasing some good news before the event. Moran update perhaps?

There have been over 40m or more shares traded in the 34p to 35p level over the last few days most of which after hours or late posted trades.

Follow the money not the share price movements. Share price movements can change very quickly. This could close at with a 10m block trade at 34p for all we know. The mm's have big orders to fill. This has been evident by the large trades and the likes of Norge bank buying up over 22m shares in last few months.

Any stock the mm's can get off pi's is a bonus to them if they have a buyer with big order in at 33p or 34p as per last couple of days.

The protest stuff in Ecuador is good news. Trust me... if you are Barrick, Rio, Codelco and others, then if you can't get new licences then you will have to buy old ones!!! Get it!!??

The 2022 Annual General Meeting (the “AGM”) of the Company will be held at Sir Ian Wood House, Hareness Road, Altens, Aberdeen, AB12 3LE, Scotland on Wednesday, 22 June 2022 at 2.00pm.

Did I miss the usual AGM resolutions paased rns?

Lasso beat the indigenous favourite in the election. The indigenous communities don't like Lasso so none of this is unexpected. It's been rumbling along now since last year but suspect the inflation crunch and rising oil costs are getting some more hot tempered than usual. Not wanting to belittle it, but there was more people and more disruption at the Liverpool v Real Madrid game. Important to keep it all in context. Also worth noting that there are large areas of ingenious communities that are behind miners due to the new schools, roads and healthcare that they provide not to mention the jobs boost to local regions.

The share price has been very strong against a weaker market. Other stocks have fallen heavily. SOLG was the green in a sea of red for several weeks now. Share price shakes have happened several times if you look at the charts. The mm's shook it down to 25p a few weeks back before moving it back to 35p in no time. This type of price action is often seen before bids. Volatile market backdrop will see weaker hands exit. But those shares are going into safer hands. Unless of course an RNS appears saying Norge Bank have sold. But I doubt that. They have been strong buyers but even they will take a breather from time to time.

Majors are flocking to Ecuador due to lefty controls across most South American commodity regions. It's all volatile and risky. Ecuador is at the moment the place to be. The recent lefty win in Colombia has threatened to close down oil producing fields! Might just be leverage ahead of higher tax rate talks or if true to the word, then you can see a lot of oil companies moving across the border to Ecuador. Lasso must seize this opportunity. But majors are risk off entities and know that Lasso's term is currently 4 years. So Come April 2025, a lefty could be in and rip up all the good international work Lasso has done. That's why recently Lasso has been doing more 'legal frameworks' which are much harder for a new gov to overturn as take years through the courts and ironically by the time they get to a legal conclusion, it's 5 years later and new pro business gov come in again. Not plain sailing but all the work lasso is doing at present is seriously underlining Alpala and SOLG's assets. It's adding mega buck value. Some might grumble about the time Nick Mather and his team have taken over this exploration project. But buying time looks like the right move as the background is so much better now both in metal price forecasts, green policies, global electrification and New pro business Government. The recent push to see majors exit Russian and surrounding regions is just the cream on the cake.

The PFS effectively put a line under the sp with exception to the usual market postulations. The PFS was based on just a fraction of the Alpala resources. The PFS was based on copper and precious metal prices that are relevant today but likely to be 50% higher in 2025 or 2027. Historically miners tend to close the discount gap as the project becomes derisked. Ecuador progress should not be overlooked either. Lasso is really going for it and all Major mining businesses are buzzing around it like bees to a honey pot. What's changed? PFS has arrived and backed by a load of industry respected individuals. What's changed? Ecuador. What's changed? SOLG management. What's changed? Lots of things have changed. The share price is the last thing to adjust but is getting there slowly!

"The semi-submersible Island Innovator drilling unit owned by Norwegian company Island Drilling, will be available earlier than planned to drill the Gazania-1 well on South African Block 2B"

Now that's encouraging. Share price was 31p just a few days ago. Oil price down about 5% since then. No idea why ECO are trading at 20% discount to that level. The move to abort the recent Acquisition deal was actually the better outcome for investors. Market will price this in the 50's before Gazania-1 results in based on my estimations.

RealitBites, I was using the NET debt figure to begin with which was $1.4bln by last update.

I would guess they will deal with debt maturity foremost and most expensive. But if terms agreed on some of the debt at much lower levels than available today, then sensible to leave that as is and service it accordingly.

I think if Ben does a capital day and says... look guys we are going to do a 'special divi' for somewhere between £250m and £300m for sure.... then we could see a serious rerate. Market has seen plenty of companies out there squander cash piles through poor M&A choices and over ambitious management teams.

That's a good point. Wood did say that they would confirm the Capital Markets day and big reveal of the growth strategy for 2023 (minus EB unit sale) ONCE the CEO had been appointed. Also - we get to know how or where they are deploying that $1.8bln in cash. Majority of it going to repay debt but I think the game plan is to maintain 0.5% ratio so could see $500m of debt maintained as easy to service and then that leaves around $900m in cash. I think 2023 would see return to growth cash positive as inflation drops and new orders have it baked in. So wonder whether they'll go for a position of $500m in cash and $500m in debt which give a NET cash portion for 2023 and then deliver a special dividend of $400m to shareholders??

Smart appointment as need safe pair of hands to see the asset sale process through and someone that has immediate in-depth knowledge of the business. Does this mean that there is new recruitment process underway to appoint a COO too? Or perhaps they are leaving that to Ken to sort out!

Blackrock loans stock out to shorters or market makers for a fee. NBIM also loan stock out. Based on past TR1's Blackrock do seem to be quite active on SOLG from time to time. Matching the activity with NBIM is interesting as last time Blackrock tinkered around NBIM stepped in and bought up 2.6%.

If the stock carries votes perhaps they are calling it back so they can get the maximum vote % at upcoming EGM?? Going to be interesting to see if the likes of Blackrock, BHP and NCM vote in favour of the SOLG resolutions. The share price could go through the roof soon as in poker terms, cards close to the chest will need to be revealed soon and the EGM might require a few cards played earlier than some wanted to.

Great articles over the weekend from Ecuador on MOU's with Barrick and Rio Tinto. Also, across the border the lefty got in and Colombia already saying they are calming down on oil producers!

Ecuador looks like the best place on the planet right now for mining opportunities. Long way to go yet.

Now, Blackrock have reminded me, I must get my egm voting sorted tonight!

Will be interesting to see if more large traded blocks appear after close. Literally million and millions are getting traded here but not in normal hours.

36p looks inevitable today. This stock is so strong now.

What's GDKJ and Van Eck got to do with Solgold?
The UK listed constituents of that fund and there are only 4! All of which are producing or in advanced development.
Endeavour, Centamin, Hoc and Greatland gold.

Not sure if any of them have copper, but SOLG is seen more as a 'copper' investment even though the Gold and Silver resources blow most specific Gold miners away. I invested in SOLG based on Copper and the impending electrification of the globe and car industry. The big trade on Friday most likely the Norway Fund. Someone mentioned earlier in week they were at 3.97% up over 1.3% from last year. An increase of 50% in their SOLG holdings in last 6 months so some keen interest and urgency there for sure. All large shareholders in SOLG appear unchanged however blackrock appear to have dropped by 0.4% or that could be on loan.

There are many other small cap funds and ETF's around and Van Eck is just one.