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I agree with you sjn1980. I do think, however, that BHP's original acquisition in Solgold has put it in a very strong position. If China wants to outbid BHP for control of Solgold I would welcome it as we shareholders would make a big pay day
The point of this message is that I think BHP will be very keen to make sure it continues to diversify its portfolio and to build up its investment in copper, including, of course Alpala/Solgold. Some of the UK contributors to this board (and people from other countries) may not be closely aware of the daily, increasing hostility between China and Australia, particularly from China to Australia. It has become almost a daily issue in the press. The issue spiked recently with a comment by a senior Australian bureaucrat that the west should strive for peace but be ready for war. China has been becoming more aggressive recently in relation to Taiwan and there is an expectation it will move on it either during the Biden administration or at least in the next 10 years according to what has been published by US and Australian defence personnel. This hostility to Australia has apparently been caused by Australia's traditional military ties with the USA and by Australia calling for an investigation into how Covid 19 started. Australia, with other western countries, has objected to China's aggression in the South China Seas. China is also building a fishing port close to Australia in PNG. Its fishing fleets have military hardware. The ill will has manifested itself in China putting embargoes, or holding up shipments of barley, meat, wine, and coal. The one commodity it has not been able to hold up is iron ore. Currently China has no iron ore of its own. China currently takes about 80 to 85% of Australia's high quality iron ore. It has a huge demand for it. The price of iron ore just jumped to a near record level in the last week. China is working hard on developing an iron mine in Guinea in Africa at Simandou so it will have its own source. The perception in Australia is that once China has an alternative iron ore source (apart from Australia and Brazil) it will start to play the same games with Australian iron ore that it has been with other commodities. Rio Tinto is well placed as it has an option to continue building and opting in to the Simandou mining project. Fortescue Metals is currently a pure iron ore play (although it is looking at hydrogen projects etc) and is not a diversified producer. Simandou is expected to be producing in 2025. By way of contrast, BHP has been advertising itself as a copper producer. It still has major coal mines in Queensland but is apparently trying to keep this under the radar as coal is now a non popular commodity due to climate change politics. BHP has a large iron ore presence but stands to be adversely affected if China does succeed in establishing Simandou as an alternative to Australian iron ore. Hence BHP will want to be developing its presence in copper and other metals. When BHP advertises on Australian television it is always about copper, electric vehicles and the future economy. Just a thought for the weekend. But I think BHP would never let Alpala get away from it.
Does anyone have any insight into why the price is rising the last two days? There is no obvious reason. Would be interested in any thoughtful comments. They are looking for a new CEO. Nick is still on the board. The elections have not been held yet. So I am wondering if something has leaked?
Addicknt, I have not been following the board for a while. I agree with what you have set out below. A lot of what you write makes a lot of sense to me. I think the end game for small shareholders may be longer away rather than sooner.
Something that I think gets overlooked, and is relevant to your point, is that in many ways the fate of Solgold was sealed when Newcrest was allowed to come in at 14% and then BHP then bought in at 14%. Given that Newcrest and BHP are friendly with each other about Solgold, and given that Nick got on the wrong side of them (and Blackrock) it makes it very hard to have some kind of competitive bidding war where some outsider major comes in an bids up the price to take over the company. One also has to take into account the shares which NM controls directly or indirectly. Given rough numbers BHP, Newcrest and Blackrock own over 30% of the company. If another major were to want to get involved it would know it is facing a very difficult task and the need to pay a high price, and possibly not succeed. So I think our practical fate was sealed a long time ago. We had two major miners on the register with significant shareholdings (not just say 5%). Liquidity is not that great in terms of trading volumes. This is why it would always be unappetising, in my view, for RIO or Barrick, to decide to takeover the company. The foothold of Newcrest/BHP/Blackrock is too large. And they are not in the business of selling out of very significant discoveries which they have bought into. It also explains why some, like you and me, believe it was always very important for Nick to develop co-operative and healthy relationships with these companies. The comments that many make on these boards about BHP and Newcrest trying to steal the company from small shareholders do not make a lot of sense to me. Once they had about 30% Solgold was in a delicate position and it needed egos to be set aside and a collaborative approach. I think we will end up getting a very good price for our shares without Nick in charge of the company. They are genuinely searching for a capable CEO. The current board is professional and would be conscious of their duties. The assets are fabulous. I just think it will take time. But BHP and Newcrest are not "fly by nighters". They are here to stay and would know the value of this company better than people on this board. Hopefully Nick can settle down now and remember his critical role which is to work in the interests of all shareholders. The last thing we need is for this to turn into a ****ing contest
I have been reading the board but have not commented recently as I have had nothing useful to add
As usual I find your comments very sensible
On the issue of Newcrest and BHP I believe they are singing from the same hymn sheet and were well before the AGM
Can I ask you please to clarify whether you are talking about a JV as an alternative to a takeover or something you think may occur after a takeover? Sorry if I have misunderstood
My strong wish is that the new board (with the new additions) is working professionally and any kind of low ball takeover can be avoided
I have been invested in Solgold for about 9 years (I have lost count precisely). I have added to my holdings from 3.5 p, 8.5 p and then 22 p (before it fell to 11 p). I am very disappointed with the recent performance of the company and the latest RNS. But I have not been selling shares or trading in and out of this stock. I am a long term holder who bought in progressively on the basis of the quality assets they were finding. I am very disappointed that the PFS seems to have been (at least what I can gather from the RNS) incompetently done, and done late. So I don't fit the category of the kind of person you are talking about but I am very disappointed at present.
Newtoit you are correct
To me that was the most disappointing RNS I have seen over numerous years
One consolation is that a good mate of mine who is very experienced and senior at Rio Tinto rates Kevin Marshall very highly for technical expertise with mining. I am a bit bewildered by this mess and feel long term shareholders deserved better planning, proper skills being deployed and time frames at least being realistic. If we are vulnerable to BHP and co now it seems because a lot of poor and slow decisions were made in the past and the PFS which Nick recently promised did not pass a thorough analysis
To be frank I don’t know what has happened. But I hope the new committee is professional and more importantly that the pi’s don’t get shafted over the next month/year
Have a good weekend all
Spot on Montecristo. This company would test the patience of Job. And this latest RNS seems like the last years they have been scratching around like over enthusiastic amateurs. Or worse, that BHP and Newcrest are just stalling now to get the company cheaply. Nick has lost any credibility in relation to mine development
Have to agree ATG. The most recent RNS on Porvenir was probably put out first to attempt to raise expectations. It didn't succeed. And then they have delivered this "let's start again" on the PFS on Apala. Not sure how Nick M can stay in the position of CEO even a day longer given this is such a major stuff up
This RNS basically says everything except that they are going back to square one. Really disappointing to get to this stage, yard down the track, and have some genius start talking about hydro power for the first time and new footprints that a kilometres away. This is really stretching patience of all people who have kept faith with this company
It will be interesting to see how this plays out on the market
This is no doubt my oversight but I had not realised that RIO was not actually being drilled yet. The statements about Blanca are encouraging but pretty non specific. I notice the announcement uses the word "encouraging" for what they have found at Porvenir but uses the words "highly encouraging" for holes 5 to 8 (assays pending). So hopefully this is a big deal. I am not sure this will be enough to move the the Sp significantly. I wonder if this is more subdued language due to the change in dynamics at board level.
If Nick mended any fences it would have been a first for him
He has a long list of ex friends some of whom were his steadfast allies and who have nothing to do with BHP or Newcrest and some of whom are reasonable and successful people invested in Solgold
He has a lot of tenacity and drive but we seem to be at the crossroads well and truly now
Let’s hope the so rises if we can get some certainty and look forward to a great outcome for all pi’s.
Phat there have been politics and internal conflict going on for a considerable time. Nothing new. The AGM just made it manifest. If it is correct that Nick is going to step aside it is an opportunity for the company to stop being paralysed in my view and get on with business. I expect the share price to go up. Nick has not lost his shares and most pi’s will be watching for when he sells. He won’t sell cheaply