Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Mining concessions are granted through a competition process where the first applicant has the right to match other offers, except in the case of applications made by ENAMI.
Unfortunately, the mining registry and procedure for new applications, called “Catastro Minero”, has now been closed for almost three years and it is impossible to predict when it will be reopened. Therefore, the only possible way to enter now is to partner with somebody who already holds mining rights. The government has announced the reopening of the Catastro Minero, in 2022.
In accordance with the mining law, a mining concession has four years on initial exploration, four years on advanced exploration, two years renewable to an additional two years on economic evaluation and the remaining up to 25 years on exploitation. The exploitation period can be extended for up to another 25 years.
Obviously not but what it means is the fully diluted number has not changed i.e. no new options have been granted today. Since the issuance of the prospectus outside of what was given to Scott and the CFO recently nothing has changed.
So went back and looked at the prospectus. 33,778,125 are mentioned there already. "The Further, pursuant to the Arrangement Agreement, the Company has also agreed to exchange the Cornerstone Options for new options exercisable for up to 33,778,125 Ordinary Shares to the Cornerstone Optionholders." See page 20.
I believe the shares issued today are existing shares but for whatever reason the RNS just came out today. As were some of the previous holdings as well with a massive delay. The RNS also states clearly that these shares are for options previously granted at Cornerstone. A lot of dust for nothing.
Interesting potential transaction Barrick looking to acquire First Quantum. Important point here is that Jiangxi is a 20% shareholder in First Quantum. They would be around 7-% holder in the combined entity. Could easily dispose that to fund the development of Cascabel. Right now it is much more difficult from them to divest a 20% stake in First Quantum. If that deal between Barrick and First Quantum happens I think that could be a positive read across for Solgold.
RK the initial main plan was 50 years mine plan or so. The current one is 25. Imagine you do a 15 year mine plan now that requires less capex and the cash flow allows you to build the mine out with cash flow generated internally. Sharket your point on why nobody is bidding yet although they are in the DR is a good one but for how many weeks have they been in their is the question. Also even though you might be in the DR you might need to do your own analysis still, no. Maybe you have to or will do a twin hole etc. The political dynamics in the country obviously matter short term and a buyer might look to get assurances.
I believe based on the recent interview with Scott the situation is like this. Someone will have to come and build this mine for let’s say $3-4Bn. Additionally they have to pay for the equity let’s say $2bn. That’s $5-6Bn. If the new internal developed plan which is not a PFS argues you can do a smaller mine plan for let’s say $1.5-2Bn and use the cash flows from there to develop the mine further you ‘only’ need $3.5-4Bn on hand. This opens up a wider range of candidates that could acquire Solgold. I don’t think the PFS needs to be a certified document and the end of the day each acquirer can do the analysis themselves as well but gives Solgold the ability to discuss with parties who have not looked at the asset in detail. The let’s develop this ourselves argument is a non starter to me.
Hey Fort yes agree we could have a newco that holds the other licenses a CVR that you also see in pharma transactions.
I think Jiangxi is obviously in play but could work also with other players together. So can do it solo or in connection with others. Vale again interesting name and also a company that will be more comfortable with the LatAm risk. CRCC Tonguan operates Mirador I think so could be very synergistic to them.
UNCOOKED ALERT: SolGold said too ...
SolGold, a London and Toronto-listed copper and gold mining development group, is at the centre of takeover rumours.
People following the situation have heard SolGold, which is developing copper and gold projects in Ecuador, has attracted takeover interest from a company backed by a Chinese group.
Some people following the situation suggested that bidder is CRCC-Tongguan, a joint venture between the Tongling Nonferrous Metals Group Holdings Co. Ltd and China Railway Construction Corporation Limited.
CRCC-Tongguan already has copper and gold mining projects in Ecuador.
People following the situation said several other parties may also be pursuing SolGold.
These people following the situation have heard talk Vale, the Brazilian mining giant, and another China-backed firm, possibly Jiangxi Copper, are the suitors involved a strategic review process.
There is also talk of mystery north American bidder eyeing SolGold, said these people following the situation.
Last year SolGold announced a merger with Cornerstone Capital Resources to get 100pc of control of the Cascabel project in Ecuador.
To be clear, this story is UNCOOKED. I have pasted the definitions of UNCOOKED below in case you don't recall their definitions.
Well if we have $45m left and money is enough for June July next year means burn is more around $3.5-4m. And yes balance has been bad in October November I agree that's why I think Bob is key here.
Also to the guys claiming I am ramping here. Whatever you say on this forum is seen in one way or another so cannot change that. Claiming that I am Quady is also funny as he was claiming we will build I am saying the opposite.
GD yes I agree strategic review is a tool to signal to the outside world that we are open for business. And I agree the JV route will not work for management. My view is that we should see interested parties if not we have a larger problem. Also the commentary around BHP by Scott tells me he is at least trying to get into a conversation going with them.
Hi I have been reading and following this chat for a while. I have been invested in Solgold for over 4 years now. Given the multiple changes that happened over the last 6-9 months I thought I share my view on the name.
I believe Bob / Scott have done all the right things with shoring up the balance sheet, brining in a strategic investor, starting a strategic review, reducing burn-rate, etc. The idea is to sell the business (at least Alpala). That's my firm view. These guys own too many shares for anything else to make sense.
Also a small comment on the article with Scott. I agree here with Warren that this article means we are working on an internal study that will allow a wider range of names to bid for the company. I think that will achieve two things. First it will create a catalyst towards the names that are currently in the strategic review/ DD process and secondly it means we create further optionality that will allow a real Plan B if the existing players do not move fast enough. I also believe that that internal study runs in parallel with the strategic review.