Member Info for mattlilly

Yes but who's been buying the extra £50m shares over te last four weeks stack...?

This is hilarious...

I take it as a badge of honour that Quady hates me...

I don't hate him, I just think he's one of the saddest people I've ever encountered in my life.

And no Quady you're not unfiltered...I can't even bother to do that just to see what you're saying about me. I'd much rather you ranted at me and then got intensely frustrated when I don't respond.

I will be delighted for you when the takeover battle is over, because you say you bought many years ago for much lower than the present price. And I won't jump on the bandwago of saying yoiu were wrong when Solgold doesn't take Alpala to production.

Finally, by far the biggest reason for filtering people (ncluding Slug's multiple aliases) is racism, sexism, abuse, disgusting language and abuse towards people on here or people in the world, etc.

It just seems to me that the same people post often inane rubbish which I can't be bothered to read.

I refiltered Bozi because we would never agrre; his scenario won't happen; and it was taking up too much Board and time.

However, I totally respect him for his resilience and the well mannered way he made his case...until he started insulting...then its time to move on...

Sorry Bozi. You fought your corner well, but I'm afraid I filtered you yesterday because it's a theoretical argument and I'm afraid it isnt going to happen...

But DBWs suggestion makes a great deal of sense...spinoff and IPO AFTER the battle is over.

Very well said DBW...youse da voice of reason on here man...

I think they probably felt they needed to mention all the options.

Personally I think the whole thing is a smokescreen.

If you simply put a For Sale board up you would look weak or desperate.

I respect your view addickt...but the takeover bid(s) will be no surprise...

I've put a range of 60/125p but my peersonal view is that kit won't go for less than NPV, i.e. 78p...

Hannam has 85p (reissued this week) and my personal view is that the final price could be as high as 105p

And here is the stunningly simple logic as to why a takeover bid(s) WILL happen.

And when you read this you have a simple choice to make, because the market and most of the 20% PI shareholders in SOLG don't get it either, otherwise they would be buying the pangts off this stock.

And the choice is: buy for possibly the biggest payday you will ever have

Hold on, waiting for your dream IPO and end up benefiting to the tune of your current holding.

Sell because you think it will take too long to monetise SOLG...

And no I'm NOT ramping.

So here's the simple logic:

Why on earth do you think the largest copper producer in Mainland China. (also involved in the exploration and exploitation of copper, gold, silver, lead and zinc) has bought a 6.3% stake in SOLG?

Do you think its just an investment? No. They have already used Valuestone to buy the initial holding, so they now control at least 7.3% assuming Valuestone hasn't bought any more shares under the 3% limit...indeed they might even be at 9.2%...

So if its not an investment its certainly not an act of charity either.

And why have BHP hel onto their current 13.7% of shares...its clearly not been an investment and, given their constant moaning at streaming deals and cashbox issues because they were diluted, they clearly would like even more shares. They can't buy these in gthe market because the resultant TR1 would immediately trigger bid speculation.

We know why NCM have continued their 13%+ holding, as a "Strategic Investment"

So what is the point of either of these major mining companies holding a £50m investment in SOLG that they paid up to 45p for and which now stands at 16.5p unless they expect a material gain.

You can be sure they won't be waiting maybe 10 years for the first dividends which even at 5% would be only £2.5m a year.

So...BHP clearly has a foothold for a potential bid or

To sell to a successful bidder and

NCM to sell to a successful bidder or a prospective bidder, e.g. BHP for which surely they would want at leats 45p.

Finally, nobody needs an initial stake in SOLG to launch a bid; I don't think BHP did before their first $350m cash offer.

And if somebody like Jiangxi makes a formal bid, to be successful they will have to pay enough for BHP and NCM to sell their stakes.

However, while you don't HAVE to bid until youhave 30% in the UK, its only 20% in Canada.

I wonder how long it will be before a prospective bidder announces a 20% plus stake or simply makes a bid which would have to be substantially higher than 16.6p to persuade BHP, NCM and even Blackrock and Norge to sell...?

In conclusion I can udnerstand some people still think or want Cascabel to go to production, but they are ignoring the simple logic that its only a matter of time before the first bid.

Good luck all

So Bozi...

This is how DBW's simpler IPO works:

BHP, Jiangxi or whoever take over SOLG lock stock and barrel.

They then 'spinoff' the regionals that they don't want into a Newco.

Newco is then IPO'd and we have the choice to buy shares in that quoted company to continue participating in the SOLG story...

No tax implications, no unquted shares that we don't want and can't sell...simples...

OMG Bozi...

You can't just look for a source to justify your case...

You've posted the link to the PWC article, but because you've never done an IPO you frankly don't understand it.

The 7% is just the UNDERWRITING FEE...as stated clearly in that article... It also says the Investment bank will charge 4% on top of that and you haven't even factored in PWC's cost...

Below is a fairly comprehensive list of the costs from the same article, but you will also have Citibank's fees and there will be massive complications because SOLG's shares are listed on two exchanges (UK and Canada) and there are three regulatory authorities concerned: UK, Canada and Ecuador.

Frankly I think you'd be lucky even at £14 million, on top of which if you look at the fact thatg the 'straightforward' merger process between CGP and SOLG will have taken at least 3 months, you're looking at significantly more than that to do what you will have to do, durin g which time the SOLG price will drift down because the Directors have cleared the decks for a takeover bid...

List of costs

The categories of costs that are ultimately disclosed in a company’s IPO prospectus include underwriting, legal, accounting, printing, registration with the US Securities and Exchange Commission (SEC), filing with Financial Regulatory Authority (FINRA), exchange listing and other miscellaneous costs directly attributable to the offering.

So first...existing shareholders in SOLG will be given UNLISTED shares in the spinoff.

There is then no market tro sell those shares and...

The action of giving the shares creates a tax liability for the SOLG shareholders receiving the new company shares.

You cannot avoid the fact that either there is a CGT gain for shareholders or, it would be a 'sale' for tax purposes by the Ecuadorian government at 25% because the asets are in Ecuador.

To say these tax consequences (which I calculated to be £29m) would be nominal is puzzling:

"the worst case liability would be nominal relative to the growth prospects of NewCo, particularly if IPO'd in the £20-30m range."

£29m isn't nominal vs £30m IPO and in any case I don't want to pay any tax.

Now some of your reply has become insulting:

"You're crowing about tax "

"You're relying on a competitive bidding war type scenario to extract the top of your range from a full sale of SOLG, frantically chucking Noront up"

"You are being awkward. "

Which suggests you're desperate.

And what is most puzzling is that in constructing arguments to try and support your proposal you have not responded to DBW's far more sensible suggestion.

So in the next two posts I will tell you why a bid(s) will happen and

Why DBW's proposal is simpler and much better than yours.

A spinoff occurs when a parent corporation separates part of its business to create a new business subsidiary and distributes shares of the new entity to its current shareholders. The subsidiary will become completely independent from the parent corporation, operating entirely on its own. If a parent corporation distributes the stock of the subsidiary to its shareholders, the distribution is generally taxable to the shareholder as a dividend payout.

In this case, ordinary income tax equal to the fair market value of the stock received is imposed on investors. In addition, the parent corporation is taxed on the built-in gain (the amount the asset has appreciated) in the stock of the subsidiary.

The tax in this case is a capital gains tax equal to the fair market value of the distributed shares less the parent company’s inside basis in the stock. When cash is received in lieu of fractional shares in the spinoff, the fractional shares are generally taxable to shareholders.

The difference between a tax-free spinoff and a taxable spinoff is that a taxable spinoff results if the spinoff is done by means of an outright sale of the subsidiary company or division of the parent company. Another company or an individual might purchase the subsidiary or division or it might be sold through an initial public offering (IPO).

I've countered your case.

We'll never agree.

It would have been a good idea a year or two ago and indeed I suggested to Ingo that they should IPO Porvenir...

But in the current fraught cis=rcumstances and people's desperate want for monetisation it would take far too long and the SP woould fall further during the process.

Look how long its already taken to try and put the merger to bed...7 weeks and counting...and still nothing announced

I didn't say shareholders were taking a gamble. I said nobody from BHP down to me wants unlisted shares.

Please detail your current relevant experience. And show me where I don't understand current corporate law and corporate finance.

Meanwhile, here is the source you asked for under the heading "Taxes"

https://www.dentons.com/en/insights/newsletters/2022/january/17/dentons-global-mining-guide/dentons-global-mining-guide-2022/ecuador

Its not a "free roll of the dice"

We have an Interim CEO and CFO. We have half a Board. We have no Director of Corporate Finance.

Have you any idea how much it costs in time and money to do what you propose.

I prepared an IPO and it cost us £14 miliion and took a total of 18 months.

And its not 'free' when the portfolio you are talking about is conservatively valued at $150m by the Company Brokers.

Nor is it free if you IPO at a value of "£20-30m" and your Ecuadorian taxes are £29 million...

I'm sorry Bozi, but thats just your opinion.

I have put up facts and practicalities and you just think I'm being awkward.

Why don't you summarise my key points and show me where I'm wrong?

You can't just shrug your shoulders when you've been so adamant on a hypothetical situation.

Yes me saying there will be a takeover bid(s) is an opinion but its supported by all the key players who are actually in the know.

Why do you think the decks have been completely cleared...?

How does your idea fit with the decision to suspend everything except the Cascabel DFS (timed for December 2023)...?

So in answer to your question:

I've voted for everything and everyone, especially Nick but against Twigger and Clare

Are you finding this interesting DBW?

You're with me on a takeover aren't you?

Have you got any experience to back up your categorical statements?

Have you actually done what you're talking about? I have.

I'm also a Chartered Accountant and have been FD of a major Financial Services company.

(Sorry everyone else).

I'm talking about paying tax in Ecuador, where the licences and the operations are.

Not Corporation Tax on SOLG profits.

And even in the UK: "Assets can be transferred between two separate limited companies but it should be noted that Capital Gains Tax (CGT) will be payable by the recipient company if the assets are transferred free of charge or below the fair market price."

Now you say Newco could be spun off into a company that would IPO for £20/30m.

I say again. Why would SOLG shareholders take shares in an unquoted company and gamble on a successful IPO?

Would you? I wouldn't, especially because my SOLG shares are in an ISA and Newco wouldn't qualify. Furthermore the only way I could sell them would be back to Newco.

meanwhile, you clearly haven't read the latest Brokers report which puts a value of $150 million on the regional portfolio.

You see you're making the same mistake as Quady. You have a good idea and therefore it must be right and you have to find a way to justify it.

I'm simply responding with the facts and the practicalities.

CGP and Mather now have an armlock on SOLG. There is no way they would go for yoru scheme with delayed rewards when a successful takeover brings them maybe a 5 bagger or more, within weeks or a few months.

And if it was me I would approach the bidder to buy the regional portfolio and put it in a Newco then or even the DGR stable.

Bozi

First I don't think your idea maximises monetisation. Its unnecessarily complex and slow.

Next. You cannot make the tax laws what you want them to be just to argue your case.

"It is then this company that gets demerged from SOLG plc."

So first you've got to go through a reorganisation.

Then you still haven't answered my challenge that any shareholder, including BHP, Newcrest, Blackrock, Jingxiang, you and me would accept unquoted shares in a company with assets valued at zero.

But they're not valued at zero.

Porvenir has a value which will be ascertained by the PEA if it ever gets done.

And if the other regional projects are worth zero, why has SOLG been trying to sell them for m ore than three years and why have we retained the licences.

Finally, on any disposal of assets (and selling a new company containing all the non Cascabel assets) would carry those assets with it; the transfer to the new company is treated as a disposal for tax purposes.

The whole thing delays the monetisation of the assets probably by several months.

Do you honestly think CGP are recommending the merger to sign up to such a convoluted scheme which simply delays the sale of the whole entity.

No I don't want to own or trade shares in a near worthless entity which will still need to raise $100s of millions to develop those assets without the backing of Cascabel as collateral to that funding.

And as to "a bidding war that might never materialise" you know my views on that.

But if it may never materialise for SOLG why would it materialise for Oldco and at what value...?