Member Info for mattlilly

Dear Quady

I am offering you the olive branch of the chance to eat humble pie.

I don't need an apology, but addict certainly does, based on your abusive attacks.

After reading this post, I believe a public apology to him is in order.

So here are the facts...

I have read every relevant document since May 2019, including MREs, PEAs, NR 43-101s, etc.

Most significantly I have read the entirety of the PEA...438 pages.

If you look at the Graph on page 409, which summarises the Economic Analysis, you will see that...

The 'cumulative cashflow breakeven' occurs in Year 8 of production.

In other words, ELEVEN years after Construction commences.

So even if construction were to commence in January 2022 (unlikely given the delayed PFS), there would be no breakeven until the End of 2033.

Given that Companies are forbidden to pay dividends from accumulated losses until sufficient profit is achieved to cover such dividends after tax, the earliest a dividend could be paid is 2035...or 2036 if the PFS delays the start of construction.

"Because dividends must be made out of profits (the funds remaining after a company has paid all its outstanding business expenses and taxes), it’s unlawful for you to pay a dividend if there wouldn’t be enough cash remaining in the company after the distribution has been made to pay existing or upcoming debts. In addition, companies that have accumulated losses cannot pay a dividend."

https://hjsolicitors.co.uk/article/guide-to-dividends/

Apply rot self Quady...everything you said in that last post is directly applicable to yourself...

Just look in the mirror.

I have read through the entire PEA and Economic Analysis, which I will summarise tomorrow...

You won't like the conclusions...

Quady...you rubbished addicts statement:

"No divis this side of 2035" challenging him to do the maths...

I then gave a detailed argument supported by reasoned logic broadly agreeing with him

You have since rubbished that...

Instead you have claimed:

"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."

You have completely refused to substantiate the maths behind that. Instead you've made statements such as:

"we have a valuation on the PEA, so we can go on that, till we get an updated valuation on the PFS.
Those are the only factual figures we can use at this moment in time."

NONE of the figures in the PEA are factual...they are all projections, based on assumptions. Even the resources are 'indicated' or 'inferred'. They hardly exist until they are mined, over a projected period of 55 years...

And the PEA was projected on the assumption that the mine would be a block cave mine, so you need to provide the maths to support your contention that, using the revised approach SOLG could pay a dividend.

And you stated:

"But we could start dividends straight away..." Above all that is the one fundamental statement that demonstrates your utter accounting incompetence."

The Capital cost was projected at $2.8 Billion originally. CRUX and Hannam have both calculated that this will be higher, whatever the method and priorities used.

You further stated:

"When the PFS arrives with a cheaper and quicker build..."

But the January RNS stated, which does not in any way say the build will be cheaper. It is quite clear in saying that the build will be quicker with lower upfront capital expenditure because of the cheaper entree of open cut mining:

""The objective of a revised study encompassing all of the Cascabel targets is to reduce the risk of a very large initial capex on a large underground development and deliver a study which demonstrates a lower technical risk through better defined upsides in resources, operating costs and recoveries and augments production with early stage open cuttable resources. Continued strength in global copper and gold markets will further endorse the strategy of making the Cascabel project lower risk, quicker to build and bring to production if a development decision is made and with reduced upfront capital exposure. "

So in summary you have not only challenged addict to come up with the maths to support statements you regard as ridiculous; you have also grossly insulted his competence; you have ridiculed me and implicitly insulted my competence and...

You have completely refused to carry out a mathematical exercise that would draw on the skills that you have repeatedly bragged about having in the past.

So, in conclusion, I HAVE agreed to do the maths if you give assumptions.

YOU have refused, desp

DBW...NM could not possibly have those discussions without the Board knowing...

And since January, it is the Alpala Committee and the Board that have been leading things.

We do know that Nick ate humble pie in the article in early January re his relationships with BHP/NCM/Cornerstone

Ans we do know that relations are better with all three now...

I can assure you from engagements that I have had with the company that while NM is still there pro term...he is certainly not driving the bus in the way that he did...

You only have to look at the tone, content and frequency of RNSs since then to see that clearly...

You're an actuary...you've made the claim that "a go for gold strategy would bring in revenues close to a billion a year minus costs."...and

"we have the copper and silver and other metals, all prices increasing. Also we get a greater gold take in the early stages, so easier to see how we could achieve just short of a billion, minus costs..."

So...you've challenged addict to produce the figures.

I am happy to take up that challenge on his behalf, but you have to come up with the assumptions, as it is your argument, so...

Which year does mining commence?
How much is open cut and how much block cave?
What levels of copper, gold and silver are produced in Year one?
What is the AISC?
How much has been borrowed to achieve first year production (i.e. what proportion of the total costs of construction?)
What interest rate was paid on the debt?
What proportion of the capital cost is by debt and what by equity?
What are the annual Admin costs in Year one?
How much is spent on E&D for the other projects in Year one.
If there is anything else I'll come back to you but give me those assumptions and I'll come back with the maths this afternoon.

And if you don't answer that challenge you have zero credibility.

You've described addicts claims as rubbish without any specific substantiation, challenging him to come up with the maths to support his claims.

You've made a specific claim yourself. I will do the maths.

Put up or shut up...

Sorry Quady that won't do...

You could at least post the assumptions on which you base today's claims...I posted an aide memoir below for the key factors...I'm happy to do the maths...

But in the meantime here is the maths that you can understand...

To generate £1 billion revenue from gold requires the mining of 825,000 ounces sold at $1700 an ounce...

The AISC, Operating costs, interest costs and E& D costs in year one are exactly the same whether you are mining gold or copper...

Alpala has 21.7 million ounces and a mine life of 55 years...that's 394,000 ounces of gold a year...

I don't claim to know anything about mining but even you must be able to work out that you simply COULD NOT mine, mill, smelt and sell 825,000 ounces in year one...

Over to you...

Brilliant ToS...

And you know what...he rubbishes peoples posts and demands that they do the maths...

But refuses to do it himself...

He constantly demands FACTS from other posters while declining to put up facts to substantiate his latest ridiculous claims and...

Lile all self opinionated bullies, he believes his best for of defence is attack...

He has managed to alienate most reasonable posters on here, either with rubbish, unsubstantiated claims (posturing as 'facts), or cowardly attacks on even the most reasonable posters...

So...Quady...put up or shut up because right now you have ZERO credibility...

I apologise for pointing out the obvious Quady...

You are absolutely right that the loan is staged...construction starts in 2022...production in 2026, by which you've drawn down the ENTIRE debt, before you've mined an ounce...

DSop you've actually got huge ACCUMULATED losses to be covered before you even think of paying a dividend...

Get it!

You've got to MINE the b****y concentrate before you sell it...yes you can presell but you only get paid when you deliver...

You're an actuary...do the maths...come back when you've done it...and then apologise too addict...

You've challenged him to do the maths, but you are skilled in that and you have alll the assumptions to back up the figures, but let me help you for starters...

Year 1,2,3,4,5 production levels in Mtonnes and sales revenue, including assumed copper prices realised

for the same years, Operational costs, interest costs, E&D costs...

Simples...don't come back until you've done that because your wild assertions make you look more and more stupid...

Quady your reply to addictt:

"That post is rubbish...."

is ignorant, pompous, arrogant risible and, frankly 'rubbish'...

Once again I entreat you to stick to what you ACTUALLY understand...

Even if it could be funded entirely from Debt, the annual interest repayments alone if its only $3 billion will still be of the order of

£160 MILLION a year...and rising, as the market is discounting much higher interest rates as early as 2023...

PLEASE reflect before you insult any more of us with your arrant ignorance and inflated opinions...

Oh dear..."But we could start dividends straight away"...

Although on current prices and projected AISC, SOLG could be turning a margin on ore fairly early in 2026 (assuming that's the year production commences), the production will be ramping up throughout 2026...it doesn't suddenly start pouring out at anywhere near maximum capacity from Day 1....then ore has to be milled and smelted and sold, which incurs further delays...

Then you've got the interest costs, the Administration costs and...the Exploration and Drilling costs of the other prospects, all of which are a Revenue item so...there is no way on earth they will be generating net operational cashflow in 2026 (assuming that is Year 1). Even if they generate it in 2027 or 2028 they would be unwise to declare a maiden dividend before 2030, if then, because of the need to create capital resources to invest in the development of, say Porvenir...

And then on your wildly optimistic and wishful assumption of production commencing in 2024 by 'open cut', even you have acknowledged that the open cut element will be modest in comparison to the block caving element, so there would be massive losses in 2024 and 2025 and those have to be financed by borrowing or equity...so I still see no dividends before the 2030s...

So in conclusion, the best prospect for early monetisation remain...

1 A J/V with BHP or NCM

2 A takeover bid or

3 Progressive MRE/PEAs for the 'string of pearls' giving regular boosts to the SP, BUT no net cash benefit to the company whatsoever unless they sell them off, in which case you might get a one off 'special dividend'...

And if you say that is my opinion, remember I AM a CA, former Banker, Treasurer, GFD of quoted and major Financial Services companies and former Head of Corporate Finance for a leading firm of Accountants...not bragging...just putting that argument up against and actuary...

And Hannam are closest to the Company as thats where Ingo was a partner and there last two updates were so swiftly after the RNS that they must have had the first nod...however...

Underpromise and overdeliver...watch this space and prepare to be surprised, whether on Alpala or the other prospects...

While the previous Presentation iteration indicated production some time in 2026...the PFS process could put that back...or the additional finds and different mining approach could bring it forward...

A J/V would almost certainly bring it forward or at the worst substantiate the 2026 start date...however...

Even the GANTT Chart has been removed from the Presentation, so nobody knows...

I think we're seeing a fundamentally different approach to news now Colonel...

I for one deprecate what I called the 'confetti' treatment which followed 'shock and awe'...I believe it ultimately became self defeating...the market became numb to news that wasn't spectacular and when there was disappointing news or worse still delays and delays, the SP got hammered...

I believe we are now seeing a more measured approach...you don't HAVE to report drill results unless they are independently verified by an acceptable expert and material in scale or import...

Nick's apparent strategy of trotting out one release after another in a blatant attempt to get the SP closer to 'NAV' blatantly didn't work...the SP is now less than half what it was almost 4 years ago, DESPITE Alpala and Porvenir...

So I believe what is viewed as a PFS delay is about getting it right, so that there are no unevaluated risks and no corrections or disappointments...indeed as I've said before, I believe there is the possibility the DFS and PFS could be co-terminous, with Financing following pretty soon after as they have been working on finance for almost a year now...

And I believe every new RNS will be meaningful...

The only other thing left for the Board to do is work out their long term strategy...

Prepare to defend a takeover...?

Structure a J/V with BHP or NCM for Alpala and use the released funds to develop the 'string of pearls'...or...

Try to go it alone, which will ultimately lead to an equity issue no later than May and/or will leave SOLG as a 'sitting duck' for unwanted predatory approaches...

So expect a clear restatement of the Strategy, no later than the next MD&A in April/May...and possibly a completely new Presentation, with a measured diary of video/conference presentations to explain the way forward.

What you will not get is any direct or implied criticism of Nick...theres no point...he has substantially brought the company to where it now is...for good or ill...and its now time for the new Board/CEO to make their mark and take things forward...

AIMO as usual...

Fastjet...Nick has been 'neutralised' ...he no longer leads the strategic direction...so don't build your hopes up...

An intelligent and informed post iceberg...at least you know what you are talking about...

Just a couple of observations...

1 The new rules allow 0% if gold is matched on both sides of the Balance Sheet...as someone pointed out "The US position under Basel 2 and 3 is that gold can be 0% RSF if the holding is offset by gold liabilities, so holding physical and selling paper short. "...this seems to argue in foavour of dumping paper gold (which is only 2% backed by physical) in favour of physical gold

2 The argument that central banks would get together to revalue gold, to the benefit of their balance sheets and capital adequacy is a powerful one

3 If, as you imply, there's no real incentive for banks to hold gold, for the reasons you state, there is no reason for anyone to hold Bitcoin, which has no inherent value whatsoever...is consuming more power a year than Argentina...and is highly volatile

4 As is implied by your and other posts, capital adequacy in general got easier after 2008 rather than tougher and there was not the proper separation of function that there should have been in the US...if the US Investment banks 'collude' to buy gold, they could make massive gains which are inherently safer than CDOs for example of which the US economy is awash...

AIMO as usual...

Why don't you say what you really mean...?

This is bizarre...and suggests to me that the SP is being 'played'...

The SP barely moved to reflect the copper price move from $3.54 to $4.37 from Feb 5 to Feb 25...(up 23%)

SOLG 22.78 to 22.80...up less than 0.1%...

During the same period, however, gold fell 1.3%...

Today gold has fallen 3.7%, copper has fallen 4.2% and SOLG has fallen 5.7%...

I still think its the name that is the problem...SolGOLD...on volume of only 5.6 million shares (although much of that was towards the close...)

Its the fear factor again...

Even at $4.12/lb, $1718 an ounce and $26.2 an ounce, the GROSS value of the Alpala reserves alone is $130 BILLION...

Quady...instead of talking nonsense why don't you stick to being an actuary...

You clearly know nothing about Basel 1,2 or 3 and banks capital requirements...unlike those of us who qualified as bankers and treasurers and Directed Financial Services companies...

Basel Capital Adequacy ratios dictate the amounts of capital banks and similar institutions have to hold to manage the risk of, for example, lending...

Gold can be both a Tier 1 and a Tier 3 Asset under Basel 3, but there are strong reasons why countries and banks have been buying gold in anticipation of Basel 3...

Here is a 'layman's article'...

"On January 31 of this year, the World Gold Council revealed that global central banks, in response to the Basel III rule changes and growing political and market uncertainty, added 651 metric tonnes of gold to their reserves in 2018. This is a 50-year record, and represents a 74% year-over-year increase in net purchases. It is also probable that current institutional demand is reflective of the harsh reality facing the gold mining sector. The trifecta of declining resources, compounding regulatory and environmental burdens increasing the time to production, and few to no new major discoveries will lead to supply shortages. The explosive growth in monetary demand for gold and the dramatic decline in gold production will certainly buoy the price well into the future – independent of broader market conditions. "

https://bmg-group.com/gold-zero-risk-monetary-asset/

Simples....

https://seekingalpha.com/news/3667115-copper-tumbles-off-10-year-highs-as-spiking-yields-shake-investors?mail_subject=jjctf-copper-tumbles-off-10-year-highs-as-spiking-yields-shake-investors&utm_campaign=rta-stock-news&utm_content=link-3&utm_medium=email&utm_source=seeking_alpha