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Thanks Pad. One thing that I do find frustrating with Solg is that we are never really sure exactly what is going on. We always seem to have to piece together what's happening on different parts of the company from random articles, interviews, answers to questions at conferences, notes in the MD&A and reading between the lines of drilling results which may or may not come in a rather stop/start fashion.
One minute drilling is on hold, the next we get half a set of results but then never get the second half. A presentation lists six priority targets one month, then it's 2 and then a year later is 5 different ones.
Third party companies have been and seem always will be "interested" in various licences, but we are still largely in the dark on that.
And Ingo forever seems to be "working on the financing and will update the market shortly", which never happens and we still really have zero idea what the financing will actually look like.
And saying they have updated investors but really just updating the big institutional investors one on one but not telling the wider market anything is frustrating.
I know they have to be careful and are probably playing cards close to their chest in order to achieve the best final outcome... But some regular official updates or clearly settings out strategy in the monthly presentation rather than in random interview snippets would be good.
Good. Solg was always going to need more funds to keep everything progressing. I want to see the regionals being drilled at a decent pace to add some value to the wider portfolio, currently they seem to have been on hold. I want to see the studies progressed on Porvenir and the additional work on Cascabel keep going as quickly as possible. Currently a lot of the research notes are assigning virtually no value to anything outside Cascabel and that needs to change.
If a bid is going to come soon then let's try to maximize the value of the whole company. And if it doesn't come, the rest of the portfolio needs continued funding. At this point with Alpala PFS in the bag and the company out on the road marketing to investors it seems like a good time to get a funding round away at or as close to market price as possible. I'd rather a smallish (in % terms) equity raise at this stage which is well received and is used to add more value, than alternative funding that gives a lot away and antagonizes the major shareholders. Don't think Solg needs the air of boardroom discontent and backroom drama hanging over it any more at this point.
Let's get funding sorted for the foreseeable and start adding more value across the portfolio, even if a corporate event is coming soon for Cascabel.
Good to see you so positive on Solg Ray ;-)
As mentioned by someone last night Solgold retweeted this.
https://twitter.com/humenm/status/1521483676374249472?t=5tl8o7c-CuPVrF-N-_NFWg&s=19
Quite an interesting thing to retweet no? Thoughts?
Fair play zoros I really do hope you get the return you are looking for here, as hopefully we all will.
I know you feel like Solg management have been flop ****ing about for ten years but you could say the opposite is true of GGP who seem to have gone balls to the wall with their progress and I'm sure people could equally well have started buying at 1.5p, kept buying up the spike and have an average of 28p there, and would now be sitting over 50% down... All in the space of two years.
Anyway let's not bang on about it, fingers crossed investors in both stocks get rewarded regardless of the timeline.
Z you are only bitter because you timed your purchases poorly in Solg. I think you said your average is high 30s or something? During the ten year period you refer to some people picked up their shares for single digit pennies. It's been possible to buy around 20p and sell in the high 30s or 40p on multiple occasions.
My Solg holding is up 25% in 2.5 years, it's not been a dog for everyone. I assume you were fortunate enough to get into GGP in the single pennies a few years ago, so even at 13p you're up almost 10x? No wonder you think it's a great investment, and are totally ignoring the fact that for anyone who bought it last year in the high 30s, when all of the cheerleaders were providing incredibly detailed analyses of how it could be worth 80p or £1, GGP has just incinerated almost 60% of their capital in less than 2 years.
In short, anyone can pick arbitrary time frames in any stock to proclaim whether it's been a good or bad investment. What I have an issue with is blaming the SP performance on the company. As I said the other day, buying Solg and holding assuming a buyout is taking a lot of risk over something that is not under the company's control. Particularly when they've been saying for years they intend to go to production and not sell or farm in the asset. This isn't the sort of stock anyone should hold for 10 years if they aren't expecting extreme volatility and a substantial period underwater as it progresses through the lassonde curve.
As mentioned earlier, picking up stocks like LGEN and Aviva in 2020 with 9-10% dividend yields which will massively compound over 20 years are the kind of stocks people should buy and never sell. I'm sure you know that though!
Rather than trying to figure out this "unjustified drop" in the SP and assuming it's some sort of reaction to or judgement on the PFS, maybe a better question would be why the unjustified rise from early March to just before PFS? Norges RNS says they crossed the 3% threshold end of Feb. Maybe they had done buying by then. The SP made two failed attempts to break through 30p and then third time it made it, I believe this is a good sign in TA so maybe at that point it was technical traders, momentum traders and hopium powering the SP rise. Those of us here who follow the minutiae of the Solg story may have assumed it was a true re-rate, expectation of PFS etc but perhaps it was just technical traders and a few pump merchants buying on low volumes which was pushing the SP up way beyond what was justified by the fundamentals. On low volumes of a few million a day it really wouldn't take much to push this SP around and get it moving... Then up into the mid-high 30s it went even before the PFS date was released, less sophisticated retail start to pile in thinking re-rate, and then the rise stops and the early birds start selling to pocket their gains, as we saw before the PFS even landed. And this sell off did start before the PFS... It's tempting to try to dress it up as a reaction to the PFS itself but I don't think it is....
Basically when the SP gets untethered from fundamentals it can go up hard and fast... But once that momentum stalled down it comes, possibly faster and harder... Maybe the PFS release was just a convenient backdrop for a few short term traders to start pushing the price, knowing that many less savvy or cynical investors would assume it was all PFS related.
Just a thought. And it also doesn't help that this is being sold off into a market that is generally dumping, probably exacerbating the decline by quite a bit.
Sean, I agree with a lot of what you've posted recently but I don't think the placing or inside knowledge of it is what's driving the SP here. The PFS isn't the trigger for needing funds, the extensive drill programme across the portfolio and further work on Cascabel studies were always there before 20 April and after. We were all just so excited about PFS we didn't really think about the next fundraise much I guess.
Solg's need for a fundraise soon was exactly the same 2 weeks ago when the SP was at 40p as it is today.
CD yes true... And the one in April last year at around a 10% discount was apparently 2.5 times oversubscribed...
Totally agree a fund raise of some sorts was always going to be necessary at some point this year. Got to fund the exploration somehow.
In the PFS presentation Ingo said "we get constantly approached for funding" and "we have no doubt there's funding available in the short and in the long run."
This doesn't sound to me like a company that needs to go cap in hand to the market trying to get a raise away at a discount.
Z - your stake in the company is probably worth more than the value of the last marginal trade that went through on the tape.
And people are right, the SP volatility is just noise. Look at the volumes and the sizes of trades going through. It's just PIs and short term traders paddling around in the shallows. For a decent sustained rise in price we need proper institutions buying. Funds, P&I etc, like when Norges was buying in a little while ago. There were people on here yesterday morning before 11am (!!!) claiming that the SP reaction was what the market thought of the PFS. As if any professional fund manager is going to make an investment decision in 4 hours based on a brief summary they read over their cereal at 7am.
PFS was an important milestone in unlocking value from Alpala and it was a good one. It's good for Solg as it stands, and it has a lot of upside and optionality, especially for bigger players. Better that than some monstrously over-ambitious and capex heavy plan that Solg had zero chance of funding, because then they would just be left to wither on the vine by the big boys until they dropped dead, and then the assets would be picked up for a song a la Sirius Minerals.
Personally I'm very happy to maintain my holding now. I have some things on my side that unfortunately don't apply to a lot of posters on here. I'm nowhere near retirement, I first bought in about 2.5 years ago and my average is 23p. So right now I'm still almost 40% up and I'm happy to hold for a good few years yet if needs be. I'm not all-in here, it's a part of my wider portfolio so whilst the swings from 20p to 40p and back can be temporarily very exciting and/or annoying, I can largely ignore them. With yesterday's PFS I feel Solg has a Tier 1 mine that it can likely fund itself and bring on-stream in the next 5-10 years, which if it does will then deliver me a great return on my investment. And all the while between now and then there is a strong chance a bid will be made or a deal done for Alpala which I will be in for and I will reap a nice premium from the current price if it happens. And on top of that, I've got a stake in whatever benefits might come from all the other regional cabs on the rank.
No offence but there are a lot of quite old people who have no one but themselves to blame for being stuck in Solg for years. If you're going to invest in a high risk exploration junior around the time of a discovery just because you expect that "this will get bought out" then you're giving a hostage to fortune. Not getting bought out isn't anything the company itself can do much about unless we want a cheap fire sale. And as Quady says, listen to the company, they've been saying all along they want to go to production and not get bought. And to expect a junior to get from discovery to production in less than 10 years is also madness. Even majors aren't managing that these days.
Yes addicknt I know what you mean. Some people think the PFS is going to put rocket fuel under the SP and it will be 55p by Friday. What seems more likely is that the PFS is very good but not in a way that is easily digestible by short term traders and algos. The NPV may be lower and some bot-produced articles might appear saying that Solg has disappointed with a lower than expected NPV. When in fact as others have already said the important things will be the capex, IRR and overall deliverability. So wouldn't be surprised if the SP rises a bit tomorrow morning and ends up finishing down on the day tbh.
If Solg gets taken over tomorrow and you are left with a few hundred K in cash, what exactly are you going to invest it in Assuming you don't spend it on booze, birds and fast cars, or just squander it.
Given that we are all here in Solg I would assume that many of us are of the view that money printing and debt levels are too high, inflation is now all but baked in, and the place to invest for the next few years is real assets, commodities and the companies that extract them. I might further assume that many would be on the look out for some promising junior copper plays and gold miners, perhaps in up and coming mining jurisdictions such as Ecuador, hoping to get a leveraged return on the likely boom in industrial and precious metal prices.
In fact it would it be going too far to say that many here would be looking for an opportunity very similar to... Solgold?
If GS is right and copper goes up 3x, 4x, 7x or whatever, isn't every small copper miner and anything with copper in its name going to go bananas regardless? Which is why it seems strange to me for people to want to "get Solg sold asap" for anything less than £1 now.
Maybe I'm missing something but to me there's a key point being omitted from Mike Henry's stance that we keep seeing repeated in article after article. He keeps making the point that BHP is not going to go out and just rely on M&A in order to increase their copper resources, but will prioritise exploration and early stage entry into projects. Which is fine, and what they have done by taking and maintaining a 13% stake in Solgold. But at some point, there has to be a transition of the project/resources to BHP itself. They could just let Solg develop Alpala but BHP isn't in it just to own 13.6% of 85% of Alpala while it's developed by someone else. I assume they want all (or most) of Alpala for themselves.
They may not go flying into mega M&A deals, but from the perspective of Solg it feels like some sort of corporate event has to occur, whether it be takeover, asset sale, JV, whatever.
On the one hand, it's of course a good endorsement to have Norges IM on the register. However, I would caution against assuming they have a specific focus on Solg in particular... they currently hold positions in 9,338 companies in their equity portfolio. They pretty much own a chunk of any large and mid cap company you can think of in most developed and a lot of EM markets.
One thing that's interesting on their website is that you can see how they voted at shareholder meetings, including at the last Solg AGM. They voted against the remuneration report and against Moller, unsurprisingly.
https://www.nbim.no/en/the-fund/responsible-investment/our-voting-records/meeting/?m=1583883