Redcloud maintain BUY rating and 46p target despite Jiangxi offer20 Dec 2025 00:56
Why would Redcloud maintain their BUY rating and 46p target if the Jiangxi offer is a done deal at 28p? Or do they know this is just the start of a bidding war to achieve true value?
REDCLOUD RESEARCH REPORT
Jiangxi Copper Sweetens Its All-Cash Offer to £0.28/sh
Impact: Positive
SolGold has received a revised non-binding indicative cash offer from Jiangxi Copper Company Ltd (JCC; SEHK:358, Not Rated). The revised all-cash offer of £0.28/sh (£842M) represents a premium of 7.7% from its previous £0.26/sh bid that was rejected last month. JCC has won support from shareholders collectively owning 40.7% of shares, and SolGold has indicated that it would recommend its shareholders to accept the offer if JCC makes a firm offer on those terms. This offer still represents a significant discount to our target price of £0.45/sh (60% lift), which we continue to believe SolGold is well positioned to achieve on its own. However, it validates our view that SolGold’s asset portfolio, anchored by the 18Mt CuEq Alpala deposit at its Cascabel project in Ecuador, is highly desirable to larger miners. We believe this bid for SolGold adds to our takeout thesis for the company that is centred on its critical mass, deposit scarcity (there are not that many deposits of this scale in the hands of a junior), and management’s experience in capital markets and M&A transactions. Alpala is a world-class Cu-Au porphyry project in the hands of a junior, and we believe it could be of interest to miners looking to expand their portfolios and resources
JCC is increasing its offer by 7.7%. The offer values SolGold at £842M or 0.35x P/NAV (based on RCS estimates) vs its peers currently trading at 0.43x. We continue to believe that SolGold remains undervalued
Valuation:
We maintain our BUY rating and our target price of £0.45/sh. Our target is largely based on a DCF model of Cascabel to determine our post-financing NAVPS8% of US$1.09/sh (unchanged), upon which we apply a 0.50x multiple. We plan to update our estimates once the UG resource at TAM is published as well. Upcoming Catalysts: 1) Cascabel DFS (Q4/25-Q1/26), 2) ESIA submission (Q4/25), and 3) Portfolio optimization and formation of an ExploreCo (Q4/25).
https://redcloudresearch.com/solgold-plc-lsesolg-jiangxi-copper-sweetens-its-all-cash-offer-to-0-28-sh/
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