We spoke to gas explorer and developer Sound Energy. Here are the latest updates from Executive Chairman Graham Lyon. Watch the full video here.
While I agree there are political risks operating here in Ecuador, that's all part and parcel of what got me interested in Solg in the first place. The prospect of a jurisdiction that is rich in resources but has very little history of mining due to historical opposition but which is now beginning to embrace mining just screams massive opportunity, albeit high risk for that high reward. And with a junior explorer having a dominant position in terms of licences rather than it just being the global majors dominating the scene, I'm happy to bear the political risk for such an undervalued entry point.
To be honest in the recent election, when even the left wing candidate is pro-mining and the right wing one is an ex banker and extremely pro FDI, could you ask for more? In my view if Perez supporters are going to spoil their ballots through sour grapes that their candidate didn't get through to the final round, then they are basically giving up their choice and putting their fate in the hands of everyone else who did vote properly.
I think someone said something the other day like "if Alpala was in Canada then we wouldn't be priced like this". Maybe, but if Alpala, Porvenir, Rio and all the rest were in Canada, they would not all be in the hands of a minnow like Solg and we would not be able to buy into this portfolio at this price.
So you've been looking at Solg for a while, trying to decide whether to pull the trigger at 22p when the new ISA allowance kicked in, but you dilly-dallied too long and now you regret not buying on Tuesday morning?
How does what Bozi set out preclude some sort of JV deal for Alpala? Item 1 on the list is complete feasibility studies on Alpala and bring it to an investment decision. How that is funded doesn't have to mean Solg funding it alone does it? Surely there are various ways it could go involving equity, debt, streaming and offtake, with one or both of BHP and NCM, and whether in a JV, farm in, whatever. Now that NM is no longer running the whole show it seems Solg will not have tunnel vision (no pun intended) in terms of how Alpala gets built... but the priority list set out below and a new CEO monetizing Alpala in a way that NM would not have don't seem to be mutually exclusive.
Let's stop wasting time discussing Bell Potter, as has been stated numerous times they are nominees holding on behalf of clients, potentially some of the very large holders such as NCM or NM.
The market screener website is not an accurate source of information, it's just blindly pulled data from various sources and made a mess of it. You can see it's not accurate because it has double counted Nick Mather's holdings, showing 90m in his own name and 89m in the name of Samuel Holdings which is his personal holding company. If you look on the Solg website they disclose their major shareholders as of 1 Feb 21, and Mather owns the 90m figure (he holds these through Samuel but it is him).
Guys it's quite likely you are all right. His determination and bloody-mindedness have got Solg to where it is today and also burned bridges and alienated people at the same time. Sometimes you need to scrap hard against the big boys to survive, sometimes you need to compromise and concede to win support. Being good at one doesn't necessarily mean you can do the other. Which is why, whether irrespective of whether it was voluntary or forced on him, he's standing aside to make way for someone with a different skill set.
Agreed Zoros. Right now my portfolio is going through one of those phases of doubt... things have come off a bit, profits and annual rates of return not looking quite so good, PMs down, miners down, things that went up loads through the backend of last year are flatlining, things I looked at but didn't buy have popped, adverts for Bitcoin are taunting me from the bus stop down the road... However, I mostly bought a lot of what I own before Covid even caused an extra 10 trillion+ dollars to be pumped into the world economy, the fundamentals haven't changed or have got better and the reasons I bought these things to hold for medium to long term are all still there. Just need to be patient and not try to snatch at gains through FOMO, and Solg seems to exemplify that at the moment. Something will happen with Alpala relatively soon, the fundamentals are getting better as other targets are drilled, bad news and board changes should be in the rearview mirror now.
Nick have a listen to this, courtesy of Zoros on another board. In particular the second half where he talks about grades and widths etc, although the whole thing is interesting.
GGP is not a good yardstick IMO because it's a unique set of circumstances. It's in Oz, literally next door to Telfer, where NCM's already fully constructed and operating processing facility is running out of ore and hungry for more. NCM have gone in large and hard, the speed at which they are developing and proving up Havieron is unusually fast. All of the stars aligned in a way that just won't be replicated in most other junior minors. Also an element of pure speculative frenzy took over IMO, how many holders who rode it up to 37p or even worse bought in the 30s have ridden it all the way back down to 20p or whatever it is now.
I'm in Solg and the constant comparisons with GGP cloud investors judgement and overdo their expectations. People look at GGP and think why aren't we doing what they are doing?
Anyway I am happy to wait patiently here, currently down quite a bit but I think this has great potential. I'm just not expecting it to "do a GGP", although obviously if it did I wouldn't complain lol.
Page 28, article about Cascabel.
In January the firm postponed the publication of a Pre-Feasibility Study (PFS) that had already been delayed. The share price understandably fell on the news but interim CEO, Keith Marshall, who was originally brought in to SolGold in November to analyse the PFS, says that investors need to be patient. “It’s very important to get the PFS right because once you move onto the Definitive Study it is very difficult to make any changes as you have lots of work streams going on in parallel.”
The old plan for the PFS was “high risk”, explains Marshall. “It was high risk in terms of execution because it was aiming to build the world’s largest underground mine in a record time and that rang alarm bells in my mind. The plan for a mine like this needs to be robust, so we can build it on-time and on-budget. Yet with the proposed PFS, I didn’t feel that was the case.”
The fact that Alpala’s ore body is deep underground, coupled with its environmentally sensitive location in a virgin mining jurisdiction, means that Cascabel needs to be a subterranean mine. Traditionally subterranean mines are far more expensive than open cast operations. The only way to make them competitive is to mine with block caving.
“Block caving is a particularly challenging mining method”, explains Marshall, “because it involves multiple different parameters. The basic concept is that you have a lattice of tunnels below the deposit, allowing access for loaders (boggers) that can move the ore to ore passes. Then you undercut the ore body by mining the undercut level. You basically mine a
great big slice of rock out from below the ore body and the orebody then starts to stress like the key stone in a bridge arch. Eventually the ore body is crushed, breaks and falls, and as you remove that material, the rock above breaks and falls and eventually you get a continuous supply of broken ore in the drawpoint. It sounds simple but as the rock mass breaks the stresses and tensions get redistributed around the cave and put stress on all the tunnels. There are mines that have lost
whole sections of the cave so it’s really important that the geotechs have the information they need."
It's certainly more complex than an open cast, or even a conventional underground mine, but there are significant benefits, says Marshall. “The big advantage of block caving is the operating cost. It’s the cheapest form of underground mining, with operating costs typically between $5 to $10 per tonne. In fact, it’s the only underground method that can compete with open pit mining on cost. But it brings a level of complexity that can’t be underestimated. I’ve developed a lot of block caving mines and there is normally a bit of pain at the beginning before you get it right. Once everything is working the cost advantage is phenomenal and it usually makes for a very profitable mine."
The SP is still more than double what it was 3 months ago! And plenty of news to come from other licenses. I wish I'd bought at this price instead of 1.20, but I bought at 1.20 expecting it to go much higher than that. That expectation hasn't changed.