Member Info for mattlilly

If I can add to that addickt...

I believe it is now perfectly possible for SOLG to complete the prospective funding of Cascabel without resort to equity, either or both through:

Further offtake agreement(s) based on copper production and/or

Conventional debt funding.

I believe Cascabel has become immensely more 'bankable; as a result of the $750 million package including the imprimatur of major players FNV and Osisko.

And whether we have to wait for the balance $900m packahe to be announced or not, any prospective bidder and especially BHP, Newmont and Jiangxi with their 'material' stake, must now think very seriously about what their intentions are.

We already know that Newmont and indeed Barrick, want greater exposure to copper and therefore pure copper/gold porfyrys may well become the big game in town.

And SOLG may well have several of these beyond justv Cascabel...

You can be sure that once there is the first substantial hint of a bid, the SP will motor...

In the past, the SP was to some extent correlated with the gold price rather than the copper price but...

With the much greater visibility follwing the Funding Package, it seems inevitable that the SP has been impacted by both.

Going forward, as the metals bull market develops, I expect GDX, GDXJ and COPEX to have an effect on all Junior copper or gold explorers/miners. They have been massively left behind since the last bull market ended in late 2011.

Sprott and other gurus believe the next bull market is already underway...

However, although it was disappointing that we didn't motor through 13p and fell back as low as 11.20, I don't believe we can be insulated from the copper price decline to a 3 month low of $4.15 hit earlier today.

You only need to look at the likes of a pure copper producer like ATYM, down 27% yesterday from its 2 month high, to see the raw market effect...

Thanks to the Funding Package, we are up 18% in the same period, so IMO can expect good progress as copper begins to recover.

Interestingly, for much of the last couple of years the strength of the dollar has been a key factor in holding metals prices down, but it hit a 4 month low last week, so this is a pure metals arket correction, largely responding to perceived weakness in China and an increased supply of copper by Chinese smelters to the rest of the world, which has replenished especially LME warehouses after cyclical lows a few weeks ago.

So, drawing on affirm's valid bullish comments on the much better and secure story building at SOLG, I am also optimistic that, assuming the copper price has hit its low and with the developing BRICS gold base d currency story, that SOLG can continue its rerate over the next few weeks.

Beyond 13p, interim targets appear to be 14, 16 and 20p...

Enjoy!

Meanwhile the new Government wants to stimulate UK markets to finance corporate growth, but they could start by banning all shorting except by MMs...

On Alastair Darling's watch, Halifax was all but destroyed by greedy hedge funds shorting them to perdition...

Meanwhile politiciansof all colours make money in their hedge fund investments

The FCA is toothless BBG but full marks for trying...

I remember finding massive 'frauds' and accounting failures in the Accounts of an AIM company masquerading as a 'merchant bank' a few years ago...

FCA was anodyne...in the end I had to use my ICAEW credibility and the Irish equivalent just to get them to do proper accounting...

I pleaded with a friend of mine that it was a 'crock of sh*t" but he and another friend lost £100ks between therm as the 'Ponzi scheme' failed...

Simples...use the filter button...

It takes me far less time to catch up and I don'y have to wade through tripe...just bands of green sTRIPEs....

Having said that, neither BHP nor Newmont have experience in Ecuador. Newmont however has operations in Chile and Peru; has expertise in the block caves planned for Cascabel; and wants to increase its copper exposure (still less than 10% of its reserves) while running down its gold - from which it is divesting to raise some $2bn - half of which it plans to use to buy back its shares and the rest to increase its dividend.

But that $2bn would buy it Solgold' s $450m current market cap and add 50% to its existing copper resources while funding the remaining $900m Cascabel capex, as well as getting all Solgold's other promising Ecuadorian copper exploration portfolio.

On the above numbers, it could afford to pay double or treble Solg's current market cap, and still make a healthy long term profit. On top of it all, it has the cash, so won't need to discount its - as seen - future returns, as does the PFS, making them look even better.

So maybe Solgold's game-changer, and copper showing early signs of its expected surge, could persuade Newmont to rethink what to do with that $2bn. Share buy-back effectiveness can never be guaranteed, and shareholders might prefer Cascabel to a 2% extra dividend yield.

That is because majors looking to maintain their project flow have a much broader time scale than retail invvestors and, looking for a significant copper resource to take them into the 2040's, will surely be running their slide-rules over the numbers thrown up by the FNV deal, which does not dent the economics as badly as might have been feared. The 2023 (revised) Preliminary Feasibility study showed a $3.2bn NPV at 8% over a 28 year mine life, requiring $2.55bn upfront capex. Running the numbers with the FNV stream assuming the remaining $900m capex on the same terms as its $650m, shows a reduction to a $2.9bn NPV - but on the ultra conservative $1,750/oz and $3.55/lb gold and copper prices assumed in the PFS.

At todays prices some 25% higher, that NPV is $1bn greater at $3.9bn (even after the enormous extra 41% tax and royalties taken by the Ecuadorian Government) and is not the only way a potential bidder will be looking at it.

That is because the PFS NPV is run 'as of now' and not as it will be when a decision to mine is made in three-four years time and capex is committed. By then, the 8% discount rate will have been unwound while the capex a new owner will meet remains at $900m, so that his 'as seen' NPV to be earned after spending it will have risen by another 39%, from $4.8bn to $6.7bn. (if his cost of capital is less than 8%, it will be even bigger). That is the after-tax discounted return a long-term Cascabel owner will see at present prices after meeting the $900m capex, (and, of course, the cost of his bid). The figures of course are before any inflation whi

(For interest, although not totally relevant, the total undiscounted after-tax free cash flow during Cascabel's current planned 28 year life, at current metal prices will be over $15bn. So if a bidder uses a lower cost of capital than 8% or already has the cash, he will see a 'value' between $6.7bn and $15bn, and judge what he can pay to acquire it accordingly)

Another attraction is that half the total project cash flow is delivered in only the first 8 years (from the high grade porphyry core) meaning a lower long term risk.

Investors in the shares, in contrast to a major taking the long view looking to add to his copper pipeline and investing in the project, won't be looking at the numbers in that way, and will still be thinking delivery is too far away. But I would be surprised if the present key mining shareholders - BHP and Newmont, each with 10%, and the Chinese Jianxi Copper with 6%, - or others (reportedly 20 in number) in the wings - are not looking hard and pondering a strategy to acquire Cascabel, if not Solgold as a whole.

"Solgold's value is at last starting to be revealed. The deal with gold streaming specialist Franco Nevada to put up 42% of the estimated start-up capital for its proposed Cascabel mine in Ecuador is much better for Solgold than anyone expected - taking in return as FNV does 'only' $1.5bn of the $32.3m life-of-mine revenue projected in the latest pre-feasibility study, which assumes gold and copper prices some 25% lower than prevailing now.

The deal shows the key position 'streaming' companies like FNV, Wheaton Precious Metals, (and Trident Resources now under offer) have built among miners to replace the more traditional sources of construction finance such as banks, institutional investors, and offtakers. And although 'streaming' (over the life of a mine) usually proves considerably more expensive than bank finance (especially if the commodity concerned rises in price, whose benefit is transferred from the producer to the streamer) it has the merit of avoiding the issue of equity shares by the mine owner and the resulting value dilution for shareholders.

It's not yet a done deal because the $650m construction funds promised by FNV (plus another $100m working capital now) needs to be supplemented by another $900m which could come from traditional sources, so the risk of share dilution is still there. In other words the deal is merely a promise in advance of the normal 'financial closing' process when participants sign up to all pieces of the jigsaw - perhaps three years from now - to guarantee that production start will happen. In practice the company thinks the additional funds will come as off-take deals for its copper concentrate already proven as of the highest quality, so any further equity funding may not be necessary.

But the key to take from this deal is that predicting the eventual capital structure and therefore true value to shareholders of Solgold's Cascabel project is now a lot easier, and more important, that a switch from Solgold's recent lowly rating at the hands of a retail market not interested in production eight years ahead and uncertain where capex will come from, to one dominated by the much broader picture seen by majors, is now likely and will showcase Solgold's true value to everybody.

Speculation has always been that a bidder will eventually emerge for what will be a major long life copper asset. However, little sign of a bidder over the last few years (resulting from poor Solgold management strategies) has replaced that perception by near-certainty that Solgold will have to develop Cascabel itself, because a new owner would have had to persuade the current 3-4 major shareholders, while finding even the earlier and smaller $100m streaming deal with FNV unacceptable.

However, that 42% cornerstone arriving now is a big, unexpected, endorsement of the project, and, as much more beneficial to Solgold than feared, makes a mining major bid for Cascabel (if not for Solgold) much more likely.

Darryl would have busted us...starting with his very public maverick cashbox attempt...

Affirm...no harm in beibg positive but you neeed to tone it down mate...

At 12.19 you said:

"12 p will be surpassed imminently and then it won't have much resistance to 13p..."

And it pretty much fell from there on to close with the lowest Bid of the day...11.10...

13, 14p will come but not yet...

Best wishes...

Trust me...SOLG have had informal approaches and told them what the starting price was...

Thats why nothing has accrued so far...but...

Manufacturers ti buy nines?

https://seekingalpha.com/news/4126158-copper-drops-to-new-three-month-low-on-weak-demand-surging-stockpiles?mailingid=36139912&messageid=2900&serial=36139912.20414&source=email_2900&utm_campaign=rta-stock-news&utm_content=link-1&utm_medium=email&utm_source=seeking_alpha&utm_term=36139912.20414

Totally agree DBW but no JV for Cascabel...

Bah humbug!

Hit 13...taken down to 11.5...12% drop...weak metals...

So the SP hit 13p today with 55k shares bought at the price...

More to come after consilidationj IMO but I fear 14p will be a harder nut to crack...

At 13p they were 123% higher than the intraday low of 5.85 on 1st March...

Lets be clear...except for the occasional few days, SOLG has relatively poor liquidity...

The total shares traded since the $750 million is c100 million, which is just over 3% of total equity.

How can any institution build up or make a significant addition to their holding with these volumes.

In reality the only way they have been able to in the past has been by subscription to equity issues or buying in the immediate after market.

Remember this from the 25th October 2023 RNS

https://www.lse.co.uk/rns/SOLG/solgold-company-update-9h3z0m67zgcb3rd.html

"As part of our ongoing shareholder engagement efforts, we have had numerous discussions with institutional and retail shareholders. Most of our shareholders are long-term investors with only a small percentage actively trading. Over the past six months, the average daily traded volume was only 0.1% of the SolGold shares outstanding. To put this in perspective, on average, it would take over 10 full trading days to trade only 1% of SolGold shares (assuming the same shares are not being recycled). "

So OK volumes have increased recently but that won't be sustained unless PIs buy more. So, other things being equal and in the absence of news and/or a bid etc. the SP might very well progress only slowly.

Ironically a key reason why the SP didn't progress much earlier this year was because nobody much was selling, whether PI or Insti. You can't make an active market on those sort of volumes.

To put it in context, in the 73 days from May 1st there were only four where over 5 million shares were traded and the average daily volume was 3.75 million or c£300k. The total was only c6% of the equity in more than 10 weeks.

So...few should need persuading to hold on for the inevitable bonanza, but only steady net buying will drive a much needed rerate...(in the absence of bullish news).

So theres no point even in a prospective bidder trying to buy shares. At the end of the day they will only be able to increase their holding by persuading one or more other major shareholders to sell and more than liely that would either trigger or be in the aftermath of a bid.

BHP only had 3% of Noront's shares when they bid 75c/share (4 times the price only 9 months earlier). And they still lost out to Wyloo...

But heres the thing...

When SOLG dropped out of the MSCI Index the SP fell from 10.84 to 6p as tracker funds divested up to 50 million shares...

These were eagerly gobbled up by the market as the SP recovered to 10.6p in under a month.

The next rerate will see SOLG re-enter the MSCI Index in September and unless there is a sharp fall, just imagine where the SP might get to as Tracker Funds scramble to get those shares back...20p..25p...

Depends what happens before then.

So...PIs hold the key here...hold on to what you've got...maybe buy some more...because the SP is only going one way until either Cascabel is sold or thefirst bid comes for Solgold...

No I'm not rampi

"after the welcome news of three quarters of a billion dollars from top gold loan investors.

After a thorough scrutiny of the company, it passed their high standards before agreeing to the money in tranches"

THAT is a very good point Mathers....they will have done massive and detailed due diligence...on Cascabel...

I respect your view DartFrog but I am afraid, based on information gleaned from various sources, you couldn't be more wrong...

SOLG is not taking Cascabel to production, either directly or through a JV.

They only have 6 senior staff...you can't direct a mining project on that, even this far out...

Also have you not read the 'mitigation' clauses for a potential buyer?

And even the steaming deals can be repaid including 12% interest...

Best wishes but you'll get your return much quicker than you think...

We wont even get to the medium term.

As long as we PIs keep our nerve the SP will steadily improve on better liquidity.

If we get as far as late August the MSCI Index Review should see Tracker Funds scrambling to buy up to $50 million of shares in a market where few are selling and Institutions cant get the shares they want.

Im sure they will have had informal approaches rebuffed with saying "youre wasting your time below..."

And I'm now convinced only a final bid well north of 80p has any chance but a $2.5 billion bid for Cascabel might have a chance...

Fully funded for the future with a possible further $159 million copper based for regional exploration, SOLG is sitting pretty...and so are we...

Hold on or even add while you can...you won't regret it...

I was caught out a couple of years ago because Ingo had told me about "the best hole ever drilled in South America..."

Eventually it was suggested that it was the bonanza hole that kicked off the Alpala 'bonanza' gold rush...

I now believe that the said hole was drilled at Rio Amarillo...

Among the relevant RNS's, this one hints at greater things:

https://www.lse.co.uk/rns/SOLG/regional-exploration-update-rio-amarillo-mmwsia5kvrx1r90.html

And why hasn't Rio Amarillo been taken forward?

My belief is that it is prospectively even better/bigger than Cascabel and they have simply 'plugged' it while Cascabel's potential is realised.

And we haven't even mentioned Blanca Nieves and other probable exciting prospects. For all we know there may be several Cascabels out there...or even better/bigger...

So why sell them, either directly or indirectly.

It is crystal clear at the current Solgold share orice that zero value has been assigned to any of these..even Porvenir, which ranks in the top 20 of current global prospects.

So why let someobody buy the whole of SOLG and reap those benefoits for years to come.

However, scenario 2 is for a successful takeover. And the only question is at what price.

I frankly do not believe the company has had no approaches for a full takeover.

We know BHP attempted it when they settled for a stake; and it is a racing certainty that Jiangxi will have asked the question informally...and that does not have to be declared.

So...because I believe the core strategy should be to sell Cascabel and use the funds to develop our astonishing regional portfolio, any successful bid would have to be in excess of £1 in my opinion.

Why?

Because depending on what numbers you use, Cascabel is worth between 60/80p.

And the regional portfolio os NOT worth zero.

I am confident that the Board/CGO shareholders would be happy to sell Cascabel; sell some shares at what would be aSP of at least 60p IMO and continue to manage one of the most exciting psospecting protfolios on the planet.

But we the PIs hold the key.

We shuld continue to believe; continue to tarde and buy to improve liquidity.

We all know the share is long overdue a rerate...well into the 20s..and that alone will stimulate interest and liquidity.

I do not believe in a lowball bid.

I do believe the Board has had informal approaches and have said what the minimum price would be and/or have said they are only interested in selling Cascabel if the price is right.

Whichever scenario plays out, we are going to make a very great deal of money here; getting more exciting.

And I shall continue to present this argument until my shares are worth over £2 million