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Hi Italian - agreed on 1) - it was always going to fall back from high 30s in the absence of good news, I just thought it would bounce up and down in the 30s... although external market forces obvs came to the fore.
On 2) I'm still hopeful of a decent payday if Solg can produce a cracking PFS in conjunction with a good MRE for Porv... Even with this new entente cordiale, I doubt the big holders of CGP like WI and Bob Sangha are going to want to see Alpala or Solg itself slip away on the cheap, and neither will the other big holders of Solg aside from BHP.
Hi Snuggtopz - out of interest, when you called 28p a little while ago, what were you basing that on? At the time you made the call my very limited charting ability suggested Solg was in an uptrend channel that peaked on 3 June when you called it, and should have found support around 30-31p if the lower bound had held. I don't think anyone was expecting the Fed's comments this week (which I actually think are fairly meaningless and about as far from hawkish as you could get without being dovish) to suddenly trigger a huge unwind of the inflation trade in 2 days, which seems to be what hit PMs and miners hard and knocked Solg down through the previous support.
Either way it's all short term noise, 28p or 33p today is kind of irrelevant to me in the long run. Just interested to know what you saw that led you to predict 28s again? Thanks.
Reading the comments on here there are so many people who either plan to sell a load as soon as this gets above 35p or people who announce that they sold last time the share was over 35p... And yet once it comes down again we get the usual complaining about "it's being held down", "it's being manipulated", "MMs having a laugh" etc.
I love the way everyone thinks that "top-slicing" or "taking some profits off the table" is somehow different from just plain old selling, and that their own selling isn't in any way related to price formation.
Could you not also take the view that "a period where the FED and other central banks may well cap interest rates, smooth the yield curve and let inflation fly" is the perfect time to borrow a ton of money, use it to build a mine and then begin selling gold and copper and paying back the debt in say 5 years time? At which point the metals prices will be higher in dollar terms and the debt will be worth much less.
EWT - exactly. So many PIs literally just looking at the bare numbers with no context. If it's a few g/t and they see double digit metre lengths they assume good, if not bad. As someone pointed out yesterday, the company could have stuck a drill right down the throat of one of those veins and reported 100m at 4g/t and everyone would be going bananas. But that would in no way indicate a commercial resource any more than what was reported yesterday indicates it isn't commercial. It's way too early to call that just on these results.
An outcome will occur with each of Solg's assets. It seems like people forget that. If you look at the landscape generally, it takes a very long time these days to progress from discovery to producing mine, often 10 years plus. There are exceptions such as Havieron or wherever which people constantly bring up, but these are actually the exceptions that prove the rule. Most discoveries take much longer now, due to geography, geology, politics etc.
Easy to form the opinion that Solg has been working on Alpala for years, the SP is still bouncing up and down between 20p and 40p, nothing will ever happen... this is not true. It has taken many years to get to this stage, but now they are near the end of the road imo, and in a much more favourable metals market to boot. The PFS will arrive, as will the DFS. An investment decision will be made. If it's favourable, then regardless whether it's Solg or BHP or the Chinese or any or all of them, the mine will begin construction at some point.
Of course there are risks of an unfavourable outcome. Uneconomical, poor deal terms, too much dilution, lowball takeover, whatever. But we have invested on the basis that the risk of such an outcome is lower than the likelihood of a favourable outcome which will unlock substantial value for us all.
Ultimately Solg isn't just going to sit there constantly drilling its targets for the next 30 years while we all just endlessly debate whether it will go to production or get taken over. At some point with each asset, it will either sell it, JV it, or start mining it. Or it may get taken over lock stock and barrel. But it's a process that takes time. Just because it hasn't happened in the last 10 years doesn't mean it never will.
Genuinely asking, not having a pop, but what exactly did you invest in 200k Solgold shares for, if not for what's about to unfold over the next year or two? Why sell out now, after holding for years in anticipation of the company realising massive value from Alpala and its other prospects... which in relative terms it seems to be on the brink of doing.
The closing price was 34.70. There was a late reported cancelled trade at 32.50 after the close which is causing some of the websites to incorrectly display the closing price or daily change. Don't worry, it closed up over 10% as RK said.
FTSE 250 and FTSE 350 are indexes, not market segments. Solg isn't included in any of the FTSE indexes because it's listed on the standard segment of the LSE main market. I think a company has to be listed in the premium segment to be eligible for inclusion in the FTSE indexes. However, there is a revenue requirement for obtaining a premium listing and Solg has no revenues (for some time to come).
Solg's market cap is already larger than a few of the smaller FTSE 250 constituents. Unfortunately I assume that having no revenues, it won't be included in the index any time soon. Which is a shame because obviously then it doesn't get automatically bought by all the index tracking funds. FTSE 350 is FTSE 100 plus FTSE 250 by the way.
Thing is about Blackrock, they are just reporting a total number, we don't know the breakdown of which funds or in what capacity they hold all their Solg shares. Some of them are in iShares ETFs so they have no real discretion about buying or selling there they are just going to track whatever the underlying index is. There's a chunk in their world mining trust. The rest could be active funds, passive funds, managed pension funds, managed institutional accounts... There is not just one big Blackrock pot that they manage for their own benefit. I don't really see them co-ordinating some devious trading strategy when their holdings are probably split across numerous funds and accounts with different managers. If they're trying to cap the price for the benefit of one fund they'd be robbing Peter to pay Paul imo.
They are one of the largest shareholders in BHP and NCM and all their competitors and for that matter most large listed companies. For BHP, acquiring Solg and all of its licences could be a key part of securing their future facing metals business for decades to come. If they ultimately buy Solg for $2bn or $3bn I don't think it's really going to move the needle on the BHP share price as such. But that difference would represent multiples higher return on Solg shares acquired for pennies. In the long run BHP will get Solg, but I'm sure a lot of Blackrock fund managers would rather see Solg bought for a higher price than a lowball.
It is not manipulated, there just isn't enough money buying the share at the moment to drive the price up. People say there are these large blocks on the ask of 500k or 1m shares at 30p or 31p. The idea that were it not for those blockers, the price would rise, and then more institutional investors would pile in at a higher price in order to sustain the upward price movement doesn't make sense to me. Why would fund managers be willing to invest substantial amounts of money at 40p but they aren't willing to buy 25% cheaper at 30p? If investors felt that Solg was such a great investment and was definitely going to be worth much more in the future than it is today, they would be buying up the shares right now and those large blocks of shares would get snapped up.
As it is, this is still a high risk share. The assets in the ground are incredibly valuable but they need to be de-risked further. More definition of the resources at the regionals is needed and the PFS and a realistic funding plan is needed for Alpala. News, PFS and funding plan will move the share price, we just need to wait for them.
Some blocks on the ask may deter day traders and short term traders but I don't think a significant share price rise is going to be driven and sustained by day traders, it will require more volume from longer term investors.
It's too easy to blame some nefarious manipulator when a share doesn't go up after you bought it. Reality is that more buyers are needed for the price to go up. Solg is hardly doing badly anyway. They just issued an extra 10% of the share capital of the company and the share price is actually higher today than it was on the day they announced the placing! The market cap of the company is about £71m higher today than it was when they announced the placing, so you could say the market is valuing Solg higher.