Member Info for mattlilly

And will eventually drive the market valuation if a bid doesn't come before.

I quite understand that many on here will wonder what EBITDA, P/E, P/NAV etc and why they matter.

I apologise to anyone who may think that I am babying them, but the analysis earlier and what I am about to post show not only how ridiculously undervalued SOLG is, but also what will drive analyst/broker revisions and are the bread and butter for any major considering a bid.

So...to start with..

EBITDA is a measure of pre tax profit and it stands for Earnings Before Interest, Tax, Depreciation and Amortisation.

Investors and analysts alike tend to focus on three key measures:

P/E (Price to Earnings) this is calculated as to the Share Price divided by actual or forecast EBITDA

P/CF (Price to sustainable cashflow). The market capitalisation divided by the annual sustainable cashflow. This is important because its not lack of capital that busts companies, its lack of cash.

Finally, P/EV (or P/NAV) This is the MCap divided by the 'Enterprise Value' or Net Asset Value. This can be determined from the Balance Sheet. So SOLG's NAV at the last MD&A was $320.337m, so the P/NAV ratio was approximately 2.

The projected average annual cashflows from Cascabel are $743 million.

The current MCap of SOLG is $821 million.

So the P/CF ratio is only 1.1

That means that in an average year for Cascabel alone...it would only take 13 months to regenerate the entire market value of the company IN CASH.

So it doesn't take much to imagine how soon the company could [ay dividends. Certainly well before Year 5 of the project and possibly as early as Year 2 or 3...

From, say BHP's point of view, Cascabel would be enhancing their earnings by $1.2 billion a year and generating free cashflow for them of $743 million.

All sounds pretty amazing so far...

But it also demonstrates that worrying about only 3 million shares traded in one day is pretty academic.

If you are here as an investor, the numbers at the CURRENT copper price out of the PFS are pretty amazing.

One other example before I move on...

The CASH COST of the Capex is $2.7 billion...in an AVERAGE year Cascabel will be throwing off $743 million CASH which means the Capex could be repaid in just 37 MONTHS...

But it gets better...

Awww!

Angels on the head of a pin matey... ;-)

Sounds like you actually want a cash raise...

Lets leave it at that and part on good terms as always...

In fact at the current copper price the P/E comes down to 0.57...

Antalya currently 4.65...

BHP 17...yes 17...ANTO 16...

This makes it a no brainer for a major, IMO

Even a SOLG takeout price of 711 wouldn't dilute BHP's P/E ratio...

Can you see what a bid is inevitable...?

Well done again DBW...

As I mentioned before, that puts SOLG on a Prospective P/E ratio of 0.68...

And thats just for Cascabel alone...nothing in for Porvenir or whatever...

And thats based on an assumed copper price of $3.60/lb

Sooner or later value will out...

By the way, Darryl met Newcrest on his first day in post and BHP in his first week...

I di lunch...

But Alpala and Regionals including Porvenir are separately designated, so the 'ring fence on Alpala isn't a problem and...

The forecast expenditure on Regionals is greater than the amount raised from Valuestone so that isn't a problem either....

It still leaves $14 working capital million for admin and licences...

I think they'll hold the issue up until either, the SP is up and moving up or, if they have a significant interest in North America and Europe where the focus is right now...

But of course a bid makes all this academic...

As the Colonel has implied, the extra $50m from Franco (yes I know it elapsed but they'd willingly give it) or a juicy similar offering from Boliden might just be enough to snap BHP's patience...might not need much...

Thats fine addickt....news before then...

RIO overdue...could be the first or se and RNS...

Hi addickt. Please give your reasoned logic as to why a placing is due soon.

And can you define soon?

You probably saw my financial analysis, prompted by my contact who was not implying an early equity issue.

Cheers

Yeah but we need loads more...

Have received a response.from my contact.

"Some of our largest investors are North American and we saw strong support from this important region in the last capital raise."

And

"Darryl has just returned from North America and we are planning to return mid-May and more frequently...In between we are marketing the PFS in Europe....an attractive story underpinned with technical facts."

Hope this helps...have a good night...

Agreed

At the moment the Canadian market has no liquidity at all for SOLG because its unknown and there is no interest...just look at the daily volumes...

But a substantial equity/debt programme, properly marketed to North American investors might change that...

Thats where the focus is going foward...

Wherever the company lists if it issues shares in the local market they get exchanged back into US dollars for reporting...

The shelf programme would be in CDN and/or USD I expect...

I guess eventually we'll have a Nasdaq or Russell quote as well...

I guess thats the aim...twofold: a liquid market in Toronto and New York; paving the way for the Alpala project finance.

Toronto is the global centre of the mining markets.

Following their London 'roadshow' last week, they're now focusing on Europe AND North America.

https://www.investopedia.com/terms/s/shelfoffering.asp

"In recent years, the company has focused heavily on expanding its presence in the Americas, investing in Ecuador-focused gold and copper explorer SolGold, buying a majority stake in Canadian gold mine Red Chris and acquiring Toronto-listed Pretium Resources, which owns the Brucejack mine."

Still bid for 300,000 shares on a dummy electronic trade...

Meanwhile I've just sent this to my contact:

"In the Kitco interview in February Darryl said you were going for a 'shelf listing' in Toronto...this of course could also unlock US investors.

Is this for Equity and debt purposes related to the Alpala project?

It seems to me it would be neat if you were to debut this with an equity issue in Candian dollars ASAP.

I think the market would take this very favourably and it would be much more effective than your 'mickey mouse' TMX listing..."

In the meantime, Fawzi says he has been "travelling on a road show in the last week"

Not had an effect on the market yet...

Of course I understand and completely agree with you as usual FTJNY, but...

The appointment of a permanent CFO would be a statement. I was told it was only b being held up by the appointment of a CEO (and no that wasn't Ingo).

And I'm sure Ingo is well rewarded, but when you appoint a CFO, either or both he gets options as part of his package (above the SP of course) and/or he buys shares in the market as a statement of faith.

Either of those could give a lift to the SP

But I'm afraid I have concluded the same as you. They don't need a permanent appointment as they are just waiting to be taken out...and Darryl as good as said so "we're open to it..."