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Copper is up over 4% over the last week to $3.38/lb, well past the $3.3 used in the PEA, and gold at over $1800 is well over the $1300 used. The PEA figures gave us a $4.4 B NPV. For every $130 (10%) increase in the gold price the NPV rises by $300 so the gold price rise adds £1.2 B to the NPV. For every 10% rise in the copper price you get a $750m rise in the NPV.
Copper has just blasted through the 5 year high of $3.3lb next stop 10 year high of $4.5lb a rise of over 35% possible?
Just went back to the PEA to look at the impact of rising copper price, a 10% increase in the copper price gives an over 17% increase to the NPV of the project.
Also noticed that the PEA was first issued to Solgold by Wood Group on the 18/4/19 then subsequently modified to final issue on 7/5/19. Issue out via an RNS was on the 20/5/19.
Over a month between first issue to client (solgold) and issue to market (RNS).
I wonder where we are in this process for the PFS?
Copper is strongly up this morning, over $3.25/lb approaching 5 year high of $3.3/lb which is also the figure used in the PEA. Once this is breached there is a long way to go to the 10 year high of $4.50/lb. With the Chinese buying up copper next couple of years for copper will be interesting.
Last post on this from me.
What I am saying is that what you call a diverse book is not in fact a diverse book - having three holders (BHP, Newcrest, and CGP) that hold over 34% and are natural partners for a take over is not a diverse book.
Solgold do not have a diverse book at the moment no matter how many times you say it.
Quite simple but Quady won't listen or accept.
Most large porphyry deposits are run by some sort of consortium (often two or three majors) to balance both their country and asset risk. In this case if BHP and Newcrest decide that is the way forward they can have between them over 30% of the 'diverse book' without talking to anyone. We all know CGP will roll over for any reasonable offer - as long as it is not from Solgold.
So the diverse book does not stop BHP and Newcrest getting together and making a bid from a great start point.
Any suggestion that they are bitter rivals does not marry up with the evidence of many majors working together at large mines across the world
Plus also scheduled for this quarter is agreement with the Ecuador government on the fiscal arrangements for the project. Sets the government royalty rate, alongside tax take, and local and employee payments. This will also reduce investors perceived risk and so improve value of the project.
In one of the recent presentations, there has been so many can't remember which, when talking about the conditional finance package Nick mentioned that the equity raise side of this package would be based on project value not current equity price and would be project equity not corporate equity.
This is effectively saying Solgold will sell to someone a proportion of the Cascabel project (based on the PFS NPV) to allow Solgold to make it's contribution to the funding package.
Pretty much a direct indication of a joint venture , not necessarily with one of the existing major partners.
The northern edge of the Porvenir licenses pretty much match the southern boundary of the national park - all of the Porvenir license lies outside the national park. However this does mean that the discovery at Chacharposa creek is only a few km from the park boundary.
It also means that all the licenses that surround the discovery are owned by Solgold i.e. to the East, West and South as non will be given within the national park. In fact the next licenses to the North are on the northern boundary of the park and are also owned by Solgold - these are the Timbara target.
What I do like about today's RNS is the siting of rigs 3 & 4. Shows real confidence in the size of the system to put them 200m to the South and North of rig 1 - not just stepping out 100m. Means by Xmas visuals could show that the mineralisation extends over 1000m in depth, 700m in width and 400m long. If the intercepts to the South and North are long you can push that out to 600m long.
A huge resource and if assays are as good as the visuals with great grades.
General market is down 2% to levels last seen early April this year, looks like a retrace to 5000 is a possibility. We have a US election in less than a week and the incumbent is unlikely to accept the predicted loss. People are taking risk off the table and as this has risen sharply over the last month makes sense to take profits and hide for a week. The company is unlikely to announce significant news in this environment if they can help it. Just sensible risk management.
Latest presentation available on the redcloud website. Shows cash in the bank of over $115 million which makes more sense than last one. Various other little bits of info in there, like an idea of the up coming copper deficits.
Nothing new in his comments. Again stating that they will aim to provide an update on the conditional financing alongside the PFS. When it came to Porvenir still very excited. Seemed to get a bit loose tounged when he said hole two would be going down to 1500m, then corrected himself and said an initial target depth of 750m and see how it goes from there.
Thanks to pob69 who pointed out Cornerstone have updated their website.
On it they have a list of the first 17 holes drilled at Alpala and the grades from each of them on their website. The list also gives the highest intervals recorded down each hole.
Over the first 17 holes the highest copper grade recorded was in drill 16 were there was 60m at 2.01% copper, this happens to compare to the first hole at Porvenir were they say it maxed out at 6% by volume chalcopyrite (34% w/w Cu) - also gives about 2% copper. Not saying the first hole at Porvenir will have anything like 60m at 2% copper but it not a bad start to find anything at that level in the first hole.
PS. the gold content for those 60m in hole 16 at Alpala was 3.4g/t giving a %Cu eq of over 5%
The gold figure comes from the last few RNSs, in the detail at the back they quote the method of calculating the %Cu eq. It is based on Cu price of $3.3/lb and $1700 /oz gold. I am assuming this is being quoted as it will be the PFS basis. - As has been said this is a chat board and everything on here is at best an opinion.
Just wanted to summarise the changes SOLG have already hinted at between the PEA and the PFS and the impact that will have on the NPV.
Copper price - PEA $3.3/lb - PFS $3.3/lb - no impact
Gold price - PEA $1300/oz - PFS $1700/oz - Increases NPV by $0.9b
Gold recovery - increased by approx 10% PFS vs PEA - Increases NPV by $0.5b
Discount rate - PEA 8% vs PFS 5% (more developed, funded and now a lower interest rate world) - Increases NPV by $3b
Capex - PEA $2.7b vs PFS $3b (keep on talking about funding $3b) - reduces NPV by $0.3b
Plant throughput PEA 50mt/a fast vs PFS 60mt/a increased resource size MRE3 - increase NPV by $0.2b
Overall NPV increases from $4.4b to $8.7b - effectively doubled a huge change in the headline figure.
I know as many of you will point out the increase in NPV is largely due to changes in assumptions regarding discount rate and Gold price taking these out the NPV goes from $4.4b to $4.8b. Not such an eye-catching improvement but still woth having.
This was largely a technicality, you can't have two contradictory documents logged onto the system. As the MRE3 replaced the MRE2 that the PEA was based on these PEA and the MRE3 are contradictory (even though MRE3 shows more resources at a greater degree of certainty). The RNS listed the some of the differences in assumptions and data between MRE2 and MRE3.
As a result Solgold can no longer quote figures from the PEA in any future statements e.g. the calculated NPVs (so the presentations from Sept onwards do not give the NPV values - instead quote broker note valuations from just after the PEA release). On the 15th Sept RNS they said the PFS would be out by end of Sept - but then changed this at end of Sept to ??
The fall back in the 15th Sept RNS was that the PFS would be registered by the end Dec 2020. From issue to the market to registering on the system a company has a maximum of 45 days - hence the 17th November date that Ned quoted. However they don't have to leave 45 days from public release to registration so could be anytime until the end of the year.
As the porvenir discovery is within 5km of the national park boundary does this rule out an open pit as an option?
Is the very high incidence of quartz veins (28%) in drill core 2 indicative of the top of mineralised core?
Is there any idea of timelines to get permits to drill the Bartolo prospect of the Porvenir license?
Did anyone else notice that when Jason started his presentation yesterday he put up the slide overlaying Ecuador over northern Chile and then highlighted that whilst Alpala was big 10mT Cu it was nothing compared to the big beasts in Chile of 40-50mT Cu. Then said they expected to find similarly large beasts in Ecuador. Was he hinting at something. He went on to talk about Porvenir and Rio?