Member Info for mattlilly

In my opinion the share price is where ot is mainly because of three fundamental factors:

1 There is poor liquidity. In all my stock market experience, even without Autobot expereince, the price always drifts down, partly because of lack of interest but mainly because the institutions and similar buyers simply cannot buy enough sharwes to make it worthwhile.

When one private investor can push the price up 10% by buying 829,000 shares, you know there is no liquidity.

2 The Autobots. I am now convinced of the view that at least one interested party is using AT trades to keep the price down. The trades are largely for menial numbers of shares, but when you have a succession of sell orders at slowluy descending prices you know there is something behind it.

And its too easy for them because they either close later in the day or the UT does it for them.

3 Nobody want to be the first bidder.

BHP is an obvious prospective bidder, I think Newmont is not...at the moment.

BHP got badly burned in Noront and had to limp away. Bob Sangha ran the successful Wyloo campaign. And by the way, Noront was trading at 15c in 2006; it spiked to $4 in 2008 before falling back to 70c; then spiked to $2 before falling back to 20c in 2013 and traded in the doldrums down to as low as 12c before it all kicked off in 2021, ending at $1.10.

But why would BHP or anyone want to be first bidder unless they pitch it far higher than the current SP and prepare for a battle? Almost certainly with the Chinese.

And the same goes for increasing a stake or buyingan initial declarable stake.

The purchase itself would drive the price significantly higher (the obverse of Berry Street Capital's sales) and any Holdings announcement would undoubtedly signal intent, leading also to a sharp price and pushing any starting bid even higher.

In conclusion, FOMO drives modern marlets, but people get suked in on a story by greed or ambition. Solgold has the potential to change many of our lives.

It has been a long haul and patience understandably has worn thin. The natural target for people's anger is the CEO and Board of Directors for failing to fulfil Sangha's inflated expectations.

So I believe, in the absence of a bid, the PFS3 will come early in 2024 and it will then be 'make your mind up time' for bidders, if they haven't bid before...

So BHP, Newmont and indeed any of the other majors established or wanting a strategic foothold in Ecuador, have a decision to make.

Some may already have decided there is no point. Wyloo has Noront to digest, for example.

And the question for any of these majors, with the Chinese already having a foothold through Jiangxi/Valuestone (and who knows, other companies may also be in the dataroom), is what to bid and when? Or also walk away.

And that brings us back to the battle between the Chinese State and the world's big miners. The latter will have seen the rapid development of Chinese interests and acquisitions acrioss the planet, especially in Africa which, to all intents and purposes the Chinese 'own.

The majors dare not let the Chinese become the dominant force in Ecuador, nor in copper/gold markets worldwide.

Why?

Because the obvious outcome would see the Chinese gobbling up assets across the planet at prices the majors are reluctant to pay, resulting in their resources depleting and progressive damage to their bottom line...let alone credibility.

And this whole debate would be much easier if the US saw metals and minerals, especially 'green' minerals as strategic.

They already see REMs as strategic, but China already dominates and is moving that way with 'green' metals. Look at lithium. Europe is going to have to exempt battery metals from their import restrictions because itherwise their car industries will die.

So what do the majors and especially BHP and Newmont do.

For Newmont the decision may be easier. They didn't buy the Solgold stake. (Newmont is American. Barrick is Canadian. BHP is Australian)

If BHP decide not to pursue their interest, their stake is biddable unless they want to be 'spoilers'. But they can afford to ask a very high price of the Chinese (although lower from another bidder). So what sort of price assuages their regret? £1 would do it, but 50p might.

Newmont would likely accept a lower price unless they see Ecuador as strategic. Acquiring Solgold would achieve that and at a fraction of the $16.8 billion they paid for Newcrest.

But at the end of the day it all comes down to who will make the first bid and at what level?

And that, in my opinion is a major reason why the SP is where it is.

My final post examines that last point.

So which majors, why and for what reason?

Lets start with BHP and Newcrest.

It seems certian to me that BHP made at least one bid approach to Solgold, culminating in their attempt to secure a deal giving them up to 70% of Cascabel.

Newcrest was first mover and, seeing the possibility of competitive tesnion, Nick Mather successfully played them off against each other, with shares sold at up to 45p.

Their continuing interest in Cascabel was clearly demonstrated when they both reacted violently to the Franco Nevada deal:

Newcrest withdrew Craig Jones from the Board (against his wishes0

And they and BHP pubnlicly excoriated Solgold for 'diluting' their resource.

If that didn't demonstrate serious intent at ultimate owenership of Cascabel, nothing would.

But now both have a strategic decision to make.

Do they write off their investment or do they follow through?

Newmont particularly have a decision to make, with Newcrest to digest and, to a lesser extent BHP have to integrate OZ Minerals.

And BHP suffered a very public bloody nose when Wyloo knocked them out of the park witb what some might say a ridiculous overpayment.

But with the Chinese in town and depleting respurces, that is the new ballgame.

Clearly the Chinese would find it difficult or even impossible to acquire mining assets in either Canada or Australia, for strategic reasons that would very probably involve the governments, but Ecuador appears to be open field and it is not only the brightest new prospect in South America (an extension of the Andean Belt riches and a far more stable government than Argentina, Venezuela or even Chile or Peru), but it is also 'open house' for bids with the Government determined to cash in on its prospective riches.

And at the end of the day, pragmatism rules, when it comes to cash.

But on what terms?

I think a likely clincher would be if the Board were able to persuade Jiangxi to sell them back most of the 90+ projects, leaving a new exploration vehicle, not short of funds, ready to seek the next Alpala...

So thats the Chinese. And indeed it may be fruitless to consider any other possible bidder. After all, why would the Chinese State invest a mere $40 million or so to acquire just over 6% of a company with a MCap currently c£235m.

It makes no sense...they don't punt in markets...it only makes sense as a strategic foothold in one of the best undeveloped copper/gold prospects on the planet...it also gets them 'inside' with enough information to determine a bid.

But wjat about the rest?

For them Solgold/Cascabel is only strategic for corporate purposes...securing resources for a future where 'green' metals are already scarce. The majors may have allowed their mining resources of, especially copper and gold, to deplete, but in the past they've always been able to rely on hoovering up Juniors who have done all the hard graft to prove up resources, but who don't have the scale or the financing capability to mine them.

There are two countries, however, where such mining is more strategic...Canada and Australia.

While neither government takes an interest in such resources for strategic reasons, seeing them more as a revenue source (hence the Australian govt supporting coal mining...), there is a strategic imperative in keeping the Chinese 'out' of their mining industries.

And beyond restoring their depleting mining resources, their is the 'big beast' factor to take account of...hence BHP's purchase of Oz; and Newmont's purchase of Newcrest...plus of course the ego factor, e.g. Andrew Forrest, Gina Rinehart etc.

But one might expect that the BHPs, Barrick, Newmont, Rio, etc would be more likely to balance a number of factors:

Depleting resources;

Complementary and synergy with existing mines;

ROC and EBITDA;

Country presence;

But especially ROC and EBITDA...

And yet Rio got itself expensively involved in one of the other major global copper prospects...Oyu Tolguei...and has continued to the bitter end, at great expense for prospectively the world's biggest block cave mine in inhospitable territory.

Surely thats an indication of how desperate the majors are, or may become...

When considering when or who will bid for Solgold...and at least one party will...one has to consider the mindset of prospective bidders...their rationale and determination. Because nobody is going to start the process with anything other than a determination to win.

And therein lies the rub...

For the company it is relatively easy...

What is the minimum starting bid we will consider?

What is our BATWA (best alternative to walking away)?

For bidders it is not so easy. As I have said before...only a 'knockout' bid will prevent a bidding war here, between at least two parties.

But even determining a knockout bid is not easy.

From the point of view of the bidder it has two aspects:

What is the absolute maximum we are prepared to pay?

What price do we seriously believe Solgold would feel unable to reject?

And this is why I believe Jiangxi have the upper hand.

Because Jiangxi is, to all intents and purposes, owned by the Chinese State.

Which means Solgold is prospectively strategic for at least two reasons:

1 China is seeking to dominate all 'strategic' metals (especially 'green' such as lithium, cobalt, nickel, copper, REMs and eventually tin, which is used in every soldered joint, in every electrical and electronic device)

https://www.mining.com/web/china-tightens-grip-on-copper-key-to-worlds-energy-transition/

2 With the 'Belt and Road' initiative coming under challenge (Italy has just withdrawn and a growing number of countries are resentful of the blackmail China is able to exert as they crumble under a mountain of mainly Chinese debt), China needs to grow its influence in South America.

They have previously had an armlock on Ecuadorian oil.

They have some 'strategic' stakes in Ecuadorian mining (the two Chinese-owned projects are the San Carlos-Panantza and Mirador mines. Both mines are currently owned and managed by Corriente Resources, a subsidiary of the China Railway Construction Corporation-Tongguan (CRCC-Tongguan) conglomerate. The latter is wholly owned by the Chinese State through both subsidiaries).

While there has been some resentment in the past against the Chinese, the Ecuadorian government needs some 'quick wins' in terms of generating revenue and the Chinese are renowned for building construction projects quicker than anyone else; they also would have a readymade need to take 100% of the metal production, especially copper.

China has also been rapidly growing its vast gold resources, as it seeks to trigger the demise of the dollar.

So what is the level of a 'knockout bid' that Solgold would find it hard to turn down?

Nick has always given the clue... "Asset Value not Market Value"

Which, with metals prices recovering and prospectively rising higher, is surely in the range £1/2.

In fact, I believe at £1 other bidders would not want to be drawn into an auction with an unknown upside and, in te absence of anyone else, surely the Board would have to accept.

But on

Paddy...Berry Street trashed the share price...they could have placed the shares through Maxit...

An equity raise would be disastrous and unnecessary...

Let me repeat...

We had $22.9 million at 30 Septemnber and the Operational cashburn is $1million a month...

And we could get a 1/2% streaming deal away easily with copper and gold having broken out, which would last us for another 4 years...

Wondering why there are all these RNSs...?

The obvious reason as I speculated before is that going up to the AGM they are supporting the SP...

However, it seems significant to me that no insiders or Directors have bought shares since Scott etc in October.

Amother possible explanation is that they are expecting a bid or significant transaction and wish to support the price so that the starting bid is as high as possible.

And of course if there is anything by way of a possible transaction in nthe air, anyone who is inside would be unable to buy...

"The rule is simple: if you know privileged information about a company, you can only deal in its shares when that information becomes public."

Worth thinking about...

Autobots are destroying this...

In the last 3 hours, 68 AT and 14 Off book

Thats 83% small change, meaningless trades steadily pushing the SP down all afternoon...

Ask yourself this question...

If the Board gets voted out, who will vote in a new Board?

The shareholders that voted the Board out...

My post from 9.14 on Wednesday...

"It wouldn't surprise me if Scott has a few RNSs lined up ready to drip feed into the market going up to the AGM and keep the Autobots on their toes...

Even if they are like Porvenir and don't update the resource but talk about drilling...

Helipuerto and Rio Amarillo spring to mind as well as a couple of others, but we've had no update on the Cornerstone properties yet, e.g. Bramaderos.

Doesn't hurt to restate what we've got...the biggest exploration footprint in Ecuador..."

I agree and surprise surprise once the bidding gets going the final price is well above the reserve price...

Looks like we'll never know why the announcement was delayed, but I think this quite bullish...why?

I suspect he has done this for tax reasons so:

1 He registers a CGT loss on 45 million shares against his original average purchase price, through a staggered Sale and Buyback

2 The balance of 6.8 million shares may well have been to settle a tax bill

3 Why has he done it then?

It was done days after the Fundraise, which would have created a Close Period, but it appears to have been during the Close Period for the Interim Results...puzzling...but it was also a couple of weeks before the Dundas and Disko announcements

IMO overall it was certainly not bearish and is inherently bullish because although he has sold net 6.8 million shares for personal reasons, he has bought back 39 million of the 45 million he sold, which means all in all he still believes in Bluejay...

Return to modest volume...not many PIs getting involved, but full marks to the buyer of 176,149 at 7.884!

Oh and for a sale of that size, Berry Street should have approached the Nomad in the interests of an orderly market....

Instead it looks like they sold the shares piecemeal into the market as a Principal.

In the context of returning as much money to their fundholders as possible, that looks crass or inept and that doesn't sit well for me with a LLP that signed up to the Stewardship Code, including:

"The UK Stewardship Code 2020 sets high stewardship standards for those investing money on behalf of UK savers and pensioners, and those that support them...."

However, the funds were almost certainly managed through Berry Street Capital Management Ltd (registered in Grand Cayman) subsidiary Berry Street Master Fund Limited, also registred in Grand Cayman, which had over $200 million AUM when it closed.

This was announced on October 23, by which time SOLG had been liquidated...

https://www.bnnbloomberg.ca/ex-paulson-partner-shuts-hedge-fund-berry-street-on-rising-rates-1.1988207

And heres an interesting extract:

"Event-driven fund strategies — which bet on corporate or news events like mergers and acquisitions, bankruptcies or hostile takeovers — have had a rough year as regulators step up antitrust efforts. Higher borrowing costs and economic uncertainty have also slowed dealmaking. "

Hallelujah for an intelligent and reasoned response Italian...

I would have thought the bid would have had to be much higher for Berry Street's 40 millionplus shares...especially as we know there is at least one keenly interested party in Jiangxi...

After all, not long after the Berry Street firesale...

Scott drove tghe price from 10.4 to 12.2 in acquiring his 790,000 shares at 11.5p average...

Your 10p is a retrograde proposal based on what happened as aresult of Berry Street's dump, but I suggest they could have achieved between 12 and 13p based on where the market had been for the previous 2 months, especially if the alternative was for an 'acquisitive' buyer to see the share sale drive the price down to 10p, thereby trashing the value of such buyer's existing holding.

The alternative, of a buyer paying say 13p and an ensuing RNS showing an increased stake would surely have seen the share price return to 14p and beyond, with consequent gain for their holding. and a bigger strategic foothold...?

Colonel...you are filtered, but it is clear that you are continuing your campaign to ruin your previous sound reputation...

Either you're stupid or you should know that every year ausitors make a statement similar to the following in their accounts. Its the 'material uncertainty' statement:

"In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of

the disclosure made in note 1 to the financial statements concerning the Group’s and the Company’s ability to

continue as a going concern. The Group has not generated revenues from operations and management’s

cashflow forecasts show that the Group and the Company need to secure additional funding to continue their

exploration and development programme and in order to continue to meet their obligations and liabilities as

they fall due. Management is currently exploring options for obtaining this additional funding, as outlined in note

1, but no firm commitments have been received at the date of approval of these financial statements. These

conditions, along with the other matters explained in note 1 to the financial statements, indicate the existence of

a material uncertainty which may cast significant doubt about the Group’s and the Company's ability to continue

as a going concern. The financial statements do not include the adjustments that would result if the Group and

the Company were unable to continue as a going concern."

And every time they folllow it with:

"In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of

accounting in the preparation of the financial statements is appropriate."

In other words..."Nil problemo'

And let me repeat:

Scott has slashed IOperational Cashflow to $1 million a month and the balance at the end of September was $22.9 million.

You do the maths.

And also to repeat...I for one would be very happy with another 1/2% streaming deal to raise a quick $50 million if the plan was to significantly uplift the drilling programme...

But not yet...because it is demonstrably not needed...

But you can't or won't see that...

"

Many of you will remember the scathing letter that Berry Street published before, I think the 2021 AGM. They were right to castigate the Board on corporate governance.

As I said at the time, the CG of SOLG was appallingly outdated and I drew Twigger's attention to that in my previous one to one, but he seemed agnostic on the point...I have never been a fan since and have voted against him at AGMs....

However, something has been troubling me since it became known that they dumped their shares in the market, due to a forced liquidation of their funds...

When I was a Stock Market GFD, I would have expected any major seller to approach our Nomad first, so that the whole block of shares could be quietly placed with interested parties. And I am in no doubt that institutions and/or 'friendly faces' around the company would have been interested because, as I keep saying, the biggest problem day to day here is liquidity. And institutions couldn't easily buy or build a significant slug without moving the market against them.

Indeed I would expect them to indicate/have indicated their buying interest to the Nomad in the context of an 'orderly market'.

And as we saw yesterday, someone has quietly moved on 13.39 million shares...

So I am forced to one of two possible conclusions as to why, as seasoned fund managers who very clearly would understand what I have laid out above, Berry Street sold their shares in a stream over several days:

1 Sheer spite. They would know that strategy would wreck the share price. I am clear in my mind that the SP fall from c14p to c10p in less than a fortnight was down to their ineptitude/deliberate sabotage of the price

2 There may be a story on the other side...

Knowing full well the consequences and maybe thinking of their next career moves, just suppose that there was either a willing buyer that they knew about or shorts had been opened on the other side...

During the following three to four weeks, volume rocketed from a daily average of less than 2 million over the previous four months to over 9 million a day.

Which also illustrates the point that because Berry Street injected volume into the market, daily volumes were able to soar.

But now they've settled back again...

And that also leads me to the firm conclusion that either or both significant news and/or a concerted buyer, would light a fire under this share price.

Think about it...none of the institutions or major holders/insiders are selling and ask yourself why?

But you or I can do something they can't do...buy the shares we want at or around 8p without moving the price..

Unless you buy 829,000 in one lump as a PI on here did in the last fortnight...and what happened to the SP?

Up 10% in a couple of hours...

QED

Yes I saw that mog...some may be disappointed at 8.13p but 13.39 million shares bought in one bundle is a serious statement of intent...

What bottom line Bozi...?

"We are not a mine builder..." It would have zero effect on the final bid price, but given BHP and NCM's reaction to the FNV deal, it might just spur them into action.

I personally think another 1/2% for $50 million would put a floor under the shares, giving all the idiots who think we're going bust food for thpught, with enough cash for 3/4 years at least, even if we did more drilling...

And 'the bottom line' would be irrelevant to me after I've banked the hundreds of thousands I expect to make...