Member Info for mattlilly

I understand your point about OZ BBG, but SOLG is a UK quoted company...RNSs are legal/regulatory requirements for any material announcement...if the Valuestone fund raising and the previous FNV deal were materiel, so is the one that is missing...rewrites are irrelevant...you have a very short finite time during which you are required to get them out...I know because I've authored/approved them myself in the past...

If this irritates you schlemiel I'm sure you're even more irritated by some of the stuff he posts as tibszol1 on 'the other side...

There would have to have been a RNS by now as this is material...so we must conclude that the $50m wasn't taken up...

I am clear from Nick's presentations and RNSs that the whole $150m was needed to get us to DFS/CFP, which Nick is now projecting as maybe as late as 2022...

Unless he issues more shares instead...

Remember, as well as all the PFS, revised MRE, DFS, CFP stuff, SOLG has also been drilling Tandayama-America and revising the mine design (at even greater expense), neither of which were in the previous plans...

So I'm drawn to a simple conclusion:

Either there will be a further equity issue, stated as "to take SOLG to DFS by end 2021" taken up inter alia by BHP, NCM and Valuestone, or...

SOLG is in talks about a JV for Alpala or has received an informal bid approach, meaning that they must have RNS radio silence until they have reached the point where they can announce something...

Of course we may even see a share price surge followed by either "we know of no reason for the recent share price movements" or...which teases out what is really going on behind the seasons...

Finally, I received an email from Eliza yesterday which included the phrase:

"And this could be Solgold's most momentous year to date..."

GLA

Just keep them coming newtoit...it is light relief from the certitude...

Quady...find any reference to me saying SOLG should "sell it cheap"

You will instead find me projecting a takeout price of 100/200p...but it depends on your definition of cheap...at an average entry of c18p for us, 200p would certainly not be 'cheap'...

Hi Frog

I have never disagreed that it is theoretically possible to go it alone, but I frankly do not believe itv will happn...

Why?

Because on the one hand there is too much outside interest in SOLG and...

I do not believe there is any way at present it could be financed at economically acceptable terms

Like you I have huge experience of capital markets...I launched the first ever European bond issue in Financial Services to raise £100m and have done many huge scale direct and/or derivative supported transactions. As you know I've also been an AIM GFD and Head of Corporate Finance for CA firm.

I agree that in theory the finance is available, but find me just one Mining Finance funding dealing the last 2/3 years that comes remotely close to what SOLG needs...

Of course Nick/Ingo may have $1 billion of streaming offers on the table and I wouldn't be surprised if much of that is from Chinese actors and/or FNV and WPM, but as I posted yesterday, the Franco Nevada increased from a liability of $100m to $158m in just 16 days, as stated in the SOLG 30 Sept Quarterly report...

And for example Wheaton recently did a gold/silver/palladium streaming deal that gets them metals at between 18 and 22% of the spot price for gold and/or silver...

Nobody has seen the PRICING terms for SOLG's FNV deal...if they had done $1 billion instead of $100m it would have stood at $1.58 billion only 16 days later...

In your intelligent note you mention "secured bonds, convertible or otherwise, royalty deals or even a rights issue"...two of those involve significant dilution...

Irrespective of the merits or demerits of SXX they could not even raise the initial $500m that would secure the total package of c$4 billion and that was in the last 2/3 years...

So I repeat, realistically the only way SOLG can develop Alpala is by way of JV, piggybacking the cash resources and/or funding capability of say BHP or NCM.

They need to do that quickly IMO because even last August SOLG was "the hottest takeover story in the City"

If I were GFD of SOLG, I would JV Alpala with NCM and IPO Green Rock and then sail all the way into the sunset developing each of our prospecting gems, one by one until SOLG was a major miner...

But I fear we may not be able to avoid predatory interest much longer...

Keep posting...

Do you know what...this is you all over...and you wonder why people get frustrated with you...

You make categorical statements and then when anyone challenges you, you wriggle, defray and even do anything to ever admit that you don't actually know everything and sometimes you don't even actually know what you are talking about...

Its not "we're taking this to production" or "we're not taking this to production"...

Its "this is going to production" or "somebody's taking it to production.

FNV could do the deal and the next day SOLG could receive a knockout bid that Nick accepts. FNV don't care...its implicit in them doing the deal that FNV assume Alpala will go to production...if it doesn't, somebody has a liability for $100 million...

Using inflammatory language like "Which means that NM and Ingo and the BOD have been very naughty and have lied to us" doesn't exactly endear you to people.

My opinion is perfectly clear:

Either SOLG will JV Alpala or...

SOLG will get taken over...

FNV don't give a toss as long as they get either their gold or legal recompense for cancellation of the deal.

Your opinion is that SOLG will take Alpala to production and you assert any argument you can to support this, when the truth is, whatever Nick or Ingo said, you don't actually know...Nick has also said it would take a blockbuster bid for him to sell...that implies that there are circumstances where he would sell rather than take Alpala to production...

"Why would Franco Nevada give Solgold all that lovely money, if they were not confident that Alpala would get built."

Of course they are confident that Alpala will get built, but they don't care who owns it...

"if FNV thought NM was going to sell Solgold to the highest bidder they would not have given them 100 million dollars for the 1% NSR."

Once again they don't care if Solgold sells to the highest bidder...they still get their stream...

"My point is you don't give someone 100 million dollars, and the promise of 50 million more, if the conversation is we don't intend to take this to production, we are going to sell it.
On that basis FNV would have said no deal, your not getting the money."

SOLG would not have been dealing with FNV if they had any intimation of a bid...that would be illegal...but they DO NOT have to rule out selling the company at a future stage, so...

All your arguments about FNV DO NOT guarantee SOLG will take Alpala to production and CANNOT prevent a takeover before production is achieved...

My God you're obtuse...

Quady you keep making these statements as if they are gospel...

"if FNV thought NM was going to sell Solgold to the highest bidder, they would not have given them 100 million dollars for the 1% NSR."

They've done deals with Newmont...

https://s21.q4cdn.com/700333554/files/doc_news/2009/11-10-09.pdf

But Barrick bid for Newmont...

They entered into deals with Navigator Resources who then delisted...

In 2012 they did a $1 billion streaming deal with Inmet (owners of Cobre Panama), which was taken over by First Quantum in 2013...

They did a streaming deal with Teranga Gold which then merged with Endeavour Mining...

Frankly they don't care if SOLG gets taken over because they have a deal which would transcend such a transaction...

Shall I stop there or embarrass you with more such deals...?

Agreed...but some on here seem to believe we can finance $1 billion or even all the cost of Alpala through such deals...

Of course we CAN....but at what cost/opportunity cost...which is why `I'm happy with a truckload of WPM...

Of course Quady and why wouldn't they based on the enormous profits they will generate from just a $100m deal...let alone the $1 Billion Nick has previously alluded to...

How else do you think FNV have gone from $15.07CDN to $163CDN in just 13 years

And WPM from $0.10CDN (yes TEN CENTS) to $55 in the same period...?

iceberg...did you not compute the import of the following...

The FNV 'cost' is now $158 million (or more) and...

Wheaton's average price they are paying for gold streams is $400 an ounce, giving them a clear $1440 anouhncde clear profit as I write this...

I thought TBTT's was a neat analogy...

Not sure you want to be promulgating that it took BHP 25 years to become a producer Quady....

Hi iceberg...what Quady and others don't seem to realise is that these royalty agreements are a very expensive form of finance...

What we haven't heard is the agreed terms of the buying price for the stream...one of the main reasons why I'm so heavily invested in WPM is because they recently stated their average buy in price for gold on the deals they have ALREADY agreed is $400 an ounce...hence why they are a low risk, high cashflow entity...

Here is an extract from SOLG's 3rd Quarter Report:

"The Company has entered into a Net Smelter Royalty Financing agreement with Franco-Nevada. On day 1 the Company has revalued the instrument, and this has resulted in a loss of US$58 million. In line with IFRS 9 this has been deferred as an asset on the statement of financial position. This financing arrangement was initially measured at fair value with subsequent fair value re-measurement to be recorded in the profit or loss. "

From Note 10 we therefore already owe $158 million, not $100 million...

Net Smelter Royalty Financing

Balance at beginning of reporting period 0
Additions – funds received under the loan 84,380,422
Additions – funds utilised in repaying Bridging Loan 15,619,578 I
nitial fair value revaluation 58,000,000
Balance at end of reporting period 158,000,000

So do we REALLY want to enter into $1 Billion of these...and you can see why BHP/NCM/CGP have a case...

Quady...that's the whole point...there aren't any...that is a complete list of all mining related finance deals over the last few years...

Newcrest's $65 million farm in agreement for Havieron gives them the opportunity to earn up to 79% of the project...that alone has driven the GGP SP from 1.8p to 34.5p in just 22 months...just imagine what a NCM or BHP JV could do here...

https://www.mining.com/newcrest-bets-big-on-greatlands-havieron-gold-copper-project/

If we don't take the FNV $50 million Quady, how does Nick get this through to early 2022 for the CFP without further equity issuance...?

Excellent iceberg...interesting addition...owned by a hedge fund...speciialises in derivatives...

https://en.wikipedia.org/wiki/Marex_Spectron

CRU expects block caves to account for more than a fifth of the growth in potential copper supply by 2025 and to represent around 10% of the unadjusted copper mine supply by 2025.

https://www.fitchratings.com/research/corporate-finance/rio-tinto-mine-delay-shows-block-caving-copper-supply-risk-24-07-2019

https://www.reuters.com/article/metals-lmeweek-newcrest/lmeweek-newcrest-eyes-deeper-mines-smaller-footprint-with-block-caving-idUSL8N27D07Y

https://www.proactiveinvestors.co.uk/companies/news/11020/rio-tinto-hires-new-partners-to-develop-new-block-cave-mining-technology-13643.html

http://www.caveminingforum.com/the-team/technical-advisory-board/

Dartfrog, Quady and others have argued that SOLG would have no difficulty financing Alpala to production on their own. This is probably based on bullish statements by Nick and Ingo, especially about streaming finance...

Others are more sanguine, believing that there would have to be an element of equity...I tend to that view, because in all my experience, where bankers are invited to provide debt finance, they expect an equity element and indeed convertible debt finance is not uncommon...

While streaming has come very much into vogue in the last few years (Franco Nevada are the leader...I have a substantial amount invested in Wheaton Precious Metals who have the same business model), you are usually mortgaging a percentage of your entire production for cash now. (55 years in the case of Alpala).

While I can see this is very attractive for a project like Alpala with a 5 year prospective payback, we should not get carried away with the idea that there is a wall of finance waiting for Solgold, at attractive prices.

It would in my view be ideal to fund through debt (say 5 and 10 year), with yields where they are at the present, but the terms would be more onerous than you think. Remember...the putative rate to FNV is 12% for a short term loan...

Try searching for Mining Finance deals in the last few years and you won't hardly find any...

https://www.mining-journal.com/stocks-market-insight/news/category/mets-investor/deals-finance/page/2

While I am in no doubt that the majors can raise debt finance if they need it, a Junior Miner like Solgold would struggle to get anywhere near the original $2.8 billion on their own, (which may now be increased significantly over $3 billion based on Nick's referenced 'reworks'). Remember we're talking about a company capitalised at less than £800 million...it would barely make the FTSE350 if it went for a full listing...

And yet ironically I believe it would be far easier if SOLG already had a major mine in production, especially at the rate Alpala will be throwing off cash in 7 years time...

So I am drawn back to my core opinion that Solgold CANNOT finance Alpala to production on its own, even at onerous terms that would imperil its SP...and therefore only two options remain:

1 JV Alpala with BHP or NCM, thereby vicariously accessing mining finance markets that the majors can easily tap, or

2 SOLG gets taken over

So, in conclusion, and surely more likely given Nick's new 'charm offensive', he needs to negotiate a JV PDQ otherwise Solgold's days as an independent are numbered IMO...

All comments welcome, but "Solgold will be able to take this to production on its own" doesn't wash with me, despite Nick's stated bullishness...if you're going to keep insisting that, please state a case supported by hard facts.

Plenty of people have opined on the detail of mining resources here, so please tell us SPECIFICAlLY how and at what cost Solgold will independently finance its way to pro