Member Info for mattlilly

You do go on and on...

And neither of those posts says a bid will come...

Even Nick countenanced what he would do if a bid comes in...it would have to be a very high price and closer to NAV...

Debt capacity or 'debt carry' whatever that is...

Neither has anything to do with the payment of dividends.

"Debt capacity refers to the total amount of debt a business can incur and repay according to the terms of a debt agreement. A business takes on debt for several reasons – such as boosting production or marketing, expanding capacity, or acquiring new businesses. However, incurring too much debt or taking on the wrong kind can result in damaging consequences."

It is accumulated losses that PREVENTS you paying a dividend.

The only ways that Debt Capacity could impact dividend paying g ability is through the cost of debt (£160 million a year), or if the Board decided it was prudent to prepay debt (if allowed in the debt agreement) before paying a dividend...

Please continue to obfuscate...

Oh and BTW I have now provided a huge amount of maths and facts to substantiate the difficulty of paying dividends before 2030.

You have still not provided one shred of factual evidence to support your wild theory that a dividend could be paid in 2024...i.e. declared after only 2 years of start of CONSTRUCTION, even if it starts in January 2022...

"I can see their position slowly changing.
Already it has gone from no way can we pay a dividend to technically we can."

Also show me any post which shows my position is changing.

Also I have been crystal clear on my opinion that the company will not have enough accumulated profits to pay a dividend before 2030.

THAT is my opinion , but iI am NOT saying they won't pay a dividend.

I'm afraid I agree mate...you really do need help...

How me one post where I have PROMISED we would be bid for...

One Post...

Here or on ADVFN

I am fed up with your blatant lies and misleading statements.

That is an excellent and succinct summary rcgl!

And as you realise, debt has a cost, whether you pay it now or roll it up to the future and it has to b e accounted for annually, thereby reducing profits or increasing losses ...

The current estimated annual debt cost of $3 Billion is c £160 million at achievebal borrowing rates on the North American market for a project like this.

So that would require 132,000 ounces of gold EVERY year (before costs) or 56 million pounds of copper ore, or.. 8.3 million ounces of silver just to cover that

Oh and bTW for those who want to throw in Royalty streams as alternative funding, the current interest cost equivalent, stated clearly in the Franco Nevada agreement is 12%, so that would require 200,000 ounces of gold every year GROSS equivalent.

In fact if we have an AISC of $1200 a year for Gold, you would need to mine 448,000 ounces of gold a year just to cover the interest costs.

And finally, for those thinking equity is an alternative, there is always an opportunity cost to equity and guess who pays...US.

What would be the Solgold share price if $3 BILLION equity was issued to fund Alpala...?

All the best and signing off...

"What I have said in yesterdays debate is correct, and as admitted, a dividend can be paid, we just need to carry debt. All companies do this."

WHEN WILL YOU REALISE THIS IS ABSOLUTE GARBAGE!

And what worries me is that some people on here might believe everything you say, because you state it with such authority...

Have you ever considered that you may be risking other people's decisions and livelihood with wrong information/implicit advice'...

Richard Branson is dyslexic...

Hi Gino...sadly those are also symptoms of early stage dementia and/or Alzheimers...never argue with someone who is so afflicted because they will never back down...

Debt is a capital item...profits and losses are a revenue item...

Please explain what you mean by 'debt carry'?

If you mean not paying the interest and carrying it with the principle...'rolling it up'...you cannot escape the debt consequences.

The notional or deemed interest still has to be charged to the Revenue Account, thereby adding to accumulated losses or reducing profits.

Also if it was debt in the form of a Bond, you cannot escape either amortisation or fair value adjustments, either or both of which would add to or detract from Losses/Profits...

Try and come up with an other wriggle that demonstrates you don't have the first idea about Company Accounting and/or Company Law

You are right addickt...we could pay a dividend if we sold off Alpala, but only if the capital gain net of tax exceeded the accumulated losses.

You can tell Quady is rattled because he keeps attributing stuff to you that you have neither said nor implied...

He simply cannot admit it when he's wrong, but when he asserts something, he is always right...

Sorry, I forgot the bit about Equity...

The law is quite clear as I've explained below...there is a line in the Solgold consolidated accounts "Accumulated Losses"...in 2036 this may become 'Accumulated Porfits, as the balance from the Profit & Loss Account is added to the Accumulated Profits from previous years. Clearly Solgold don't have any because aside from incidental and capital items or revaluation gains, they haven't had any net profits and won't have before 2026 or 2027 at the earliest.

While Accumulated Profits or Losses add to or reduce the amount of Equity, you cannot pay a dividend if you haven't made any profits.

The Directors have a duty to ensure a dividend can be paid without risking insolvency:

"Directors’ duties require them, before recommending or paying a dividend, to consider whether the company will, following the payment of the proposed dividend, be solvent and continue to be able to pay its debts as they fall due. That decision needs to be made in light of the current and likely future financial position and needs of the company."

Dividends must be out of:

"accumulated, realised profits, so far as not previously utilised by distribution or capitalisation, less its accumulated, realised losses, so far as not previously written off in a reduction or reorganisation of capital duly made..."

Put simply, a dividend can only be paid out of realised profits less realised losses. This is known as the realised profits test.

"Under the dividend legislation, a company’s realised profits are those included in its ‘relevant accounts’ (CA2006 s836). Those accounts are:
? its last annual accounts (as circulated to shareholders and meeting other formalities);
? if the company wishes to distribute realised profits arising since the date of the last annual accounts, a more up to date set of accounts drawn up to a more recent date that includes those later realised profits. These are known as ‘interim accounts’ (not to be confused with listed companies’ consolidated half-year accounts)...

All losses are realised losses except in limited circumstances. The playing field is deliberately tilted so that it is easier to have a realised loss than a realised profit. This reflects the concept of prudence applied to whether profits and losses are treated as realised.

The formalities are strictly enforced by the courts. A recent High Court decision further pressurises company directors, when paying dividends, to comply with their fiduciary duties and directors’ responsibilities.

The High Court said a dividend paid during a period of poor financial performance was “a transaction at an undervalue”.

So in short. Its very simple...Solgold cannot pay a dividend until its profits have eliminated all previous accumulated losses.

Hope this helps addickt...

Hi addickt...this was the point that you wanted me to address:

"I believe dividends can be made in certain circumstances where an accumulated loss has been incurred and is done so by an application to the High Court. " and...

"The audited balance sheet is presented in a different way to that of UK companies and I'm assuming it's drawn up in accordance with Aussie regulations? Specifically, they don't seem to 'balance' it in the way we do.
However, and this is where it relates to yesterday's discussion: The company has accumulated losses of several hundred million dollars, but the 'Equity Value', as they describe it, is positive to the tune of $395m, much of which is accounted for by the Share Premium entry.
In my understanding, the fact it's positive would, technically, allow a dividend. Of course, any such dividend is unlikely for years, unless a partial disposal is made, but is my thinking correct?"

I shall answer the first here but may need to run on into a second post for the second.

My primary source will be ICAEW of which I am a Fellow, having practised both Audit and Accounting and Finance.

I assume we can rule out 'distributable profits' until 2032 at the earliest...

"Directors should consider whether there are losses arising since the date of the accounts that have depleted the distributable profits available at the date of the accounts. If there are, then the directors should not pay or propose a dividend out of distributable profits that no longer exist, as this would breach capital maintenance law."

'Distributable profits' are:

"The profits of a company that are legally available for distribution as dividends. They consist of a company's accumulated realized profits after deducting all realized losses."

So even if Solgold were to make a net profit from 2026, this must first be set against all the accumulated losses, which have arisen out of annual administration, operating, exploration and other ancillary costs in the years since SOLG inception in 2005 . These are shown in the Half Yearly Report released on Feb 12 as $141.392 million (and remember its Solgold we are talking about, NOT Alpala, because the parent is paying the dividend. Q may have overlooked this.)

By the way, Solgold is London listed so the Accounting has to be in line with British and International Accounting Standards.

I'm not sure what you mean by "they don't seem to 'balance' it in the way we do". You may be used to 'side and side' Balance Sheets but the 'vertical' approach used in the RNSs has been common for many years. You will see that 'Total Assets' and 'Total Equity and Liabilities" are exactly equal in the Quarterly Financial Report in Canada and similarly in the RNS Half Yearly Report.

TBC

I agree with everything you say Lunch Money and sadly, having reviewed every presentation and webinar on Youtube and Twitter, every PEA, MRE, NI 43-101 and corrections, I have come to the conclusion that the RNS on 15 September not only clarified things finally, but gave a clear direction to management as follows:

"SolGold acknowledges the defaults raised by staff of the OSC as a result of its review. At the request of staff of the OSC, SolGold will address these through the removal of references to the superseded PEA and filing an amended MRE#3 on SEDAR. It is expected the amended report will be filed by the end of September 2020. As the 2019 PEA results have not been carried forward in the new technical report, SolGold will not refer to the 2019 PEA results in ongoing public disclosures and reiterates:"

The sad thing is that this action was almost certainly triggered by a complaint by CGP to the OSC, severely embarrassing the Board and all of us shareholders.

This note was restating an instruction given in April 2020 and yet presentations were still being prepared and given up to July 2020 and beyond, either with the incorrect information (3.6 years) or, more euphemistically ("very fast payback")

Unfortunately our friend on here who worships at the shrine of the senior individual concerned, took every word as gospel rather than you or I, spotting the anomaly some time ago and then checking it out in the PEA itself.

This was the original correction in April 2020

""As a result of the completion of MRE#3 and the impending release of the NI 43-101 technical report, the PEA will be effectively superseded by the MRE#3 technical report as the current technical report on the Alpala Project and should no longer be considered current." (SolGold news release 7 April 2020)"

I believe the intent was to get the SP up towards the NAV, but ultimately the persistent disappointments, the 'demotion' and the Board taking the reins have ultimately had the opposite effect...

Thanks Andy...made my day.

I can assure you and everybody else that I mean no malice, but...

Its just like Trump...I won't accept the posting of complete rubbish that could adversely affect the judgement of decent posters on here.

Also I won't accept blatant insults when the insulter is blatantly in the wrong and systematically either fails to acknowledge that, but especially to not apologies.

That is ungracious in the extreme.

A typical narcissist is often a bully...they can never be wrong...they will argue black is white...misconstrue or, misquote or manipulate somebody else's opinion to fit their own myopic view of the world...accuse others and otherwise attack an individual rather than their constructive arguments...etc.

I apologise that I have ever stated my qualifications or experience on here. It has only ever been done to validate the facts, opinions and research that I post. To be fair, the person in question has done the same, announcing that he was a trainee actuary and implying or stating that makes him excellent in numerical tasks...

`but he then goes on to expound on Accounting, Finance, Corporate Finance, Treasury, Legal and other topics on which he clearly actually knows little, sometimes supporting these opinions with something he's dragged from the internet that he then demonsttrates he still doesn't understand.

My charitable conclusion is that, because he's so desperate to be righty in his opinion that Solgold will take Alpala to production, he will collate any arguments, opinions, false data, misquotes, attacks and insults to defend his position.

Everybody knows mine:

Solgold will be unable or unwilling to take Alpala to production on its own.

Either they will need a joint venture, they will need to sell it, separately IPO it or ultimately be vulnerable to a bid for the company that very few of us would have contemplated even as recently as November.

But in the aftermath of NM's 'confetti' communications; 'shock and awe' presentations (delivered in a monotone and inability to meet almost any deadline, the Board and its Alpala Project Committee have taken control.

The upshot is better governance, more openness, a further delay but with an absolute determination to assess all options and attendant risks and then to deliver solutions that are in the interests of ALL shareholders rather than a narrow few.

How do I know this? Because I am in regular communication with informed persons.

Meanwhile, having read the entire PEA I am certain that the PFS exercise will clear up anomalies, thoroughly review everything, recalculate as appropriate and come up with a viable, attractive evaluation of Alpala as a basis for Financing.

The trouble is that the scale of it, for a company with a MCap of £470m inevitable means we will need help.

PS I haven't forgotten about you addict.

Hope this helps...AIMO as usual...E&OE

addict...I haven't forgotten you...there is a simple explanation but, unlike Quady, I am going to look at the documents in detail before coming back to you with an opinion...

Don't hold your breath for an apology from elsewhere mate...he's like the kid with his hand in the sweaty jar...he will deflect and obfuscate until the cows come home to avoid admitting error...

I have tried for months to be patient, using facts and rational argument and even apologising when he once pointed out any error...

I believe that is fundamental to the integrity of this board while we wait for white smoke from the Solgold chimney...

First of all...thanks Lunch Money...you've actually read the PEA and confirmed that it takes 8.5 to 8.8 years from start of construction to break even...

So even assuming construction begins in 2022, that means it will be well into 2031 before breakeven...

However, if you look at the Graph on page 409, it actually shows the breakeven on cashflow in year 8 after PRODUCTION..., so that takes us to 2036...

Quady keeps quoting the PEA as his defence against the dividends argument that addict put forward but, despite being retired and having the time to post 4,807 times and rant at decent people, he still declines to do the decent thing and read the PEA or even scroll down to page 409 and then apologise to addict.

And then he compounds the felony by resorting to insults and untruths again by posting:

"As an ex CEO you seem to roll over at the first hurdle and say woah is me, we have competition , we better sell the company fast, as I don't know what to do."

There is no evidence anywhere on any of my posts to support that last statement.

Quady

You keep quoting the PEA as validation for your argument that dividends could be paid as early as 2024...

READ THE PEA

Until you read the PEA you have zero credibility...

I've read all 438 pages AND the revised version...yesterday and today...

Its quite clear...NM was wrongly quoting 3.6 years. the PEA clearly shows 8 years...

I will keep saying read the PEA until you've confirmed that you've read the PEA.

You demanded substantiation for what addict and I said.

Its in the PEA in black and white...and you won't get a revision util the PFS comes out.

So READ THE PEA.

Read the PEA...Revenue minus costs equals profit....or loss...

And the Graph on Page 409 doesn't include interest costs...£160 million a year by Year 4...

Look again at the PEA (which you clearly haven't)

Page 409

8 YEAR PAYBACK'

All the quotes your read were wrong.

This is what you ACTUALLY posted...

“Well done Redknight, that's my point exactly, we can make estimations at some of those figures, but not others, that's why I asked you and addicknt to show the maths that we don't get a dividend till 2035, 2036.
That statement is rubbish.

I can state what we do know, and that is at PEA with gold at 1300 dollars an ounce, we have a payback of the mine in under 4 years. That was the figure for the Block cave operation.”

and

“addicknt remind me what you do or did.
That post is rubbish.
If we have a payback in under 4 years at PEA, and at PFS we are going to build cheaper and quicker, that could easily bring it under 3 years.
Then with the PFS at higher copper and gold and silver prices, maybe closer to two years.”

And this statement is utter garbage, showing once again you know nothing about Company law.

"By the way you can pay a dividend why carrying debt, it's called gearing, and I suggested a rather modest gearing ratio of around 40%.
You know as well as I do that dividends can be paid under these circumstances."

Its nothing to do with gearing,

ITS ILLEGAL TO PAY A DIVIDEND OUT OF ACCUMULATED LOSSES.