Member Info for rcgl2

Hi DBW - no on Norges website it still only lists 2.28% as of 31 Dec 21. Latest RNS from beginning of March had them over 3%.

Norges voted in favour of all resolutions. They helpfully publish their voting decisions on their website.

RK - yes exactly - I don't think it implies that they are desperate to trigger a change of control a week after the meeting because nothing much would have been awarded anyway at that point. Hardly surprising if DC and AH wanted some sort of insurance against them being out of a job shortly after starting in any event (under this or the previous arrangements).

Some people keep blatantly ignoring the fact the non-execs don't participate in the new arrangements because it doesn't suit their agenda, but bear in mind they could participate in the old arrangements... so if you're worried about the board of directors trying to feather their nests, this arrangement is better.

Anyway, despite trying to provide some factual based balance, I'm not sure how I feel about these new arrangements in terms of timing and also the fact that the maximum potential comp for the CEO is massive. I may just not vote either way and see how it plays out (aka see what the big shareholders decide since their votes will carry the day anyway).

Let's try to be clear here in the interests of balance. This is my interpretation so of course could be incorrect...

Several posts here and in other groups are coming at this from the perspective that the proposal is "if the company is sold or sells off 50% of its assets, the directors get a massive payday, and therefore they are incentivised to flog off the assets on the cheap asap in order to reap a large windfall." This is not what is being proposed in my opinion.

The annual short and long term incentive schemes consist of potential for cash, options, performance related options, restricted stock units (RSUs) and performance stock units (PSUs), most of which will have a vesting schedule over a period of time in order to incentivise the employee to stay with the company. I assume these will be, for example, a grant of RSUs that vest in 1/3 chunks over a 3 year period, or such like. If the employee quits before their awards have vested, they forfeit any unvested awards.

The change of control provision means that the vesting of already granted awards is brought forward:

"In the event that the Company undergoes a change of control by way of sale of greater than 50% of the voting shares
in the Company, or 30% [NOW 50%] of the assets of the Company, or any resolution to wind-up, dissolve, or liquidate the
Company, or there is a change greater than 50% of the Company’s directors as a result of a reorganisation, all Awards
will vest early."

This doesn't mean the employees get gratuitous bonuses that they were not otherwise entitled to. It means that the awards they have already earned but which haven't vested and which they would have received anyway if they had stayed with the company, will vest immediately under a change of control.

You could see this as an incentive to sell the company or the main assets, but then again it's also protection against likely losing your job and losing the value of compensation that you have been awarded for past years but not yet received. As an example, if Solg is bought out and taken private, it would be unfair for an employee to have part of their compensation for prior years vest next year in worthless delisted or non-existent Solg stock.

These incentive schemes are designed to withhold compensation over a period of time to ensure actual performance metrics are met and also try to engender loyalty to the company, rather than just paying it all up front in cash based on some short term metric and the employee just pockets it and leaves. Therefore it isn't unreasonable to have a vesting clause for earned but not yet paid compensation in the scenario that the company potentially ceases to exist or the employees lose their jobs.

I would also reiterate the point that non-executive directors are not eligible to participate in any of these schemes, which currently includes all of the directors except Darryl.

As Bozi and others are saying, isn't Cascabel something like 95% of the value of Solg anyway? Selling off some of the lesser licenses is hardly going to trouble the scorers. Whilst I'm not averse to having a market standard compensation and incentive plan that should attract decent talent and (IF administered properly) actually incentive the executives to unlock shareholder value, I agree 30% threshold for change of control when they could effectively retain almost 70% of Cascabel was ridiculous.

I for one didn't spot that, I just skimmed over the change of control definitions thinking they would be market standard, as the board claimed the whole package was... Guess it pays to read every word!

I also agree with what Lunch and others said, optically this looks poor - again. There was plenty of time to canvass the views of major holders before they released the EGM details. In fact I assume that's the only way they can get to a point where it's worth putting it to the vote, since it only takes a few of the larger holders to make things very difficult for the company so they have to get them onside in advance. No need... especially the day after a 15% whacking to the SP!

Hi Addicknt - this is not intended to be patronising or rude, but every trade is both a buy and a sell. One party is buying and one is selling. Which of course you know. The exchange doesn't publish a trade as a buy or a sell, it's just a trade. The websites such as LSE print them as buy or sell based on price in relation to the spread but I think it's meaningless really.

At best you could say that an O trade with a market maker represents shares being bought by the street or sold from the street... But the A trades are just direct trades between two participants so not sure how you can characterise such a trade as being a buy or a sell, since it is both.

Looking at todays trades there have been approx 1120, of which about 900 were A trades.

How do we explain a 14% drop? Because there are sellers on the book who are willing to sell their shares at 14% less than what they could have been sold for yesterday!

The last GDXJ holdings stated are as of 16 June. So Solg wasn't in it yesterday, but if it has been included in today's rebalance and they just bought all those shares then we should see it when the the latest holdings are published.

Reminder: contrary to what some people keep repeating, none of the current board other than Darryl are eligible to participate in these incentive and bonus schemes. This is not a case of "the board feathering their own nests."

Why do I think they're having the vote now? Because they want the new arrangements in place firstly for when the new CFO starts and secondly so they can start hiring some senior execs with the relevant skills needed to progress the various parts of the portfolio, in particular Cascabel.

Quady, your view is that production is the most likely outcome. On many occasions people have suggested that Solg doesn't have the required experience to build a complex underground mine. You have been pretty consistent in your view that Solg will be able to hire in the necessary experience, which I assume would include quite a lot of managers and execs to oversee everything on the company side. Therefore if I may be so bold, I would have thought you should be voting in favour of the new executive compensation arrangements, as I think they will be key to attracting the necessary talent to run the Cascabel operation (IF no takeover or sale occurs of course).

Tuju, it's the same thing. A general meeting is a general meeting. If it's not the annual general meeting, then it's an extraordinary general meeting. This is an EGM because it's not the AGM. Both types are general meetings of shareholders.

CD didn't break the rules. He just went on the GGP board and repeatedly told them that it was overvalued and that it was going to go lower. The hysterical disciples there don't like to hear that, they prefer to think that their beloved GGP is massively undervalued and that it's only trading at 10p due to an evil conspiracy involving JP Morgan and other nefarious short sellers.

However, what you need to remember is that the LSE site admins have positions in GGP, so they don't tolerate anyone making the case that it could be overvalued in case it spooks the idiots whose money they need to pump it back up. In particular MassiveRay doesn't like this talk, and since he is an admin he bans people who post things he doesn't like. You will also remember that Miagi went on the GGP board and said it was overvalued at 30p, and was also banned for saying it.

My thoughts on the proposed motions, in no particular order:

- "The Non-Executive Directors are not eligible to participate in the Company’s performance-related incentive plans". So all of this huffing and puffing about the board filling their boots with loads of options before a takeover is incorrect imho. Currently there is only one Executive Director, and that is Darryl. I assume once the CFO starts, there will be two. But ALL of the rest of the board are NEDs and therefore do not receive the long term or short term performance incentives.

- Seems to me the main point of this new performance plan is to attract NEW executive directors and executive employees, i.e. all of the experienced management that Solg is going to need if it plans to construct Alpala and develop the other targets (bearing in mind that regardless of what any of us think of the likelihood of that, that is the company's stated goal). The company has no revenue, it can't just keep handing over large guaranteed salaries regardless of performance. Therefore it has to use performance based incentives, equity compensation etc to attract talent. And that is the key point, if you want to attract the best talent to run the company, you need to offer competitive compensation packages. Look at how good Darryl has been since he joined, do you think he would have taken the role if they offered below-market comp?

- The strike price of any options to be issued is not 56p. That is the weighted average exercise price of the outstanding options under the current arrangements (the Existing Plan). The new Long Term Incentive Plan Rules and the Performance Bonus Plan will replace the Existing Plan. There is no set price specified for any future option awards.

- Obviously any unvested long term awards will vest upon change of control. It's a known fact that Solg is seen as a takeover target. Why would any serious candidate take an executive role at the company if they thought they could lose their job and their unvested awards in less than a few years? Also what this means is that any awards already granted but not vested are accelerated. It is not saying that if a takeover occurs every director will be gratuitously showered with cash which they hadn't otherwise earned or become entitled to.

- Having said all of the above, the CEO and Executive Director maximum awards do seem very high to me. Multiples of base salary seems a lot. How are we supposed to assess how likely it is that these maximum targets would ever be met? What is the likelihood of awards being minimum, target or maximum in any given year? Does the name suggest that the board expects most execs to reach target most of the time?

- "payments on termination for Executive Directors are restricted to the value of salary and contractual benefits for the duration of the notice period." Is this an admission that Nick Mather's severance payment was egregious and that sort of thing cannot happen again?

Berry Street Capital sent the letter.

I assume Bell Potter are custodians holding for DGR and Samuel (Mather), hence approx 12.5%.

Hi SM, thanks for the ALL example which I haven't really paid any attention to. Obviously opportunities exist in the market due to shares being incorrectly valued, going back to the original tweet the question is whether this is one of those cases. I think I agree Solg in undervalued, any way you look at it that seems to be the case... However the market hasn't really begin correcting that undervaluation in a sustained way. Yet. Let's hope the right catalyst occurs soon to kick off that process.

Hi Sharketmare. My concern is mainly about valuation. Right now Solg is pretty much valued on Cascabel with very little attributed to anything else. So if they were to sell their stake in ENSA, doesn't that raise the question why should we expect it to be worth more than what Solg itself is currently worth?

If 85% of ENSA is worth more than ~£700m, then why isn't Solg worth more than that now, given that virtually no one seems to believe Solg will actually mine it themselves, i.e. a sale is likely. If 85% of ENSA is only worth £700m and that cash was received by Solg how will that help me as a shareholder today? I'll still be holding Solg shares that are worth around 32p which is mostly attributable to the cash they would be sitting on. If they keep some back to fund exploration and dividend some out, I would assume the value of the shares would decrease by the amount of the dividend. So where does that leave us? We've disposed of the most advanced asset, a proven tier 1 target and looks like economic mine, and are left with a load of assets that may or may not become economic mines and will consume a lot of cash to get to a state where value might be released. And some cash on the side. Admittedly the remainder of Solg would then be cashed up and require much less new equity funding which should mean avoiding dilution for holders as those other assets are proved up.

But I guess that brings me back to the question, is Solg undervalued right now and if so, why? And what if it's not undervalued, in which case would selling off the jewel in the crown actually be sensible at this point rather than trying to increase that value by securing funding or JV to build it and retain an interest, locking in future revenue streams?

There's no free lunch here. I feel like we need to avoid assuming that Solg can just sell its main asset and expect to receive more for it than it is currently valued at. If so, why would that be the case.

Not being negative here, I'm just trying to wrap my head around the possibilities and make sure I've thought through all the outcomes properly.

Saw this on twitter from Michael Kao, who I would recommend following. Could have been written for Solg

"3 questions I ask myself for any idiosyncratic investment right now:

1. WHY is it undervalued and WHY am I so lucky to have uncovered it?
2. HOW is the company financing itself and what happens if it can't raise $?
3. WHAT is the catalyst for value realization?"

From the PFS RNS in April: "SolGold intends to release a National Instrument 43-101 ("NI 43-101") technical report on Cascabel within 45 days of this release (the "Technical Report")."

So we knew this was coming since the PFS release.

It's the recent Odd Lots podcast on copper. Would recommend everyone listen to it.

On the upside the GS guy is saying copper will be an incredibly tight market over the next decade and prices could go bananas.

On a more cautionary note he also made a good point about the long term lack of talented engineers and skilled labour in the mining industry over the last decade, which will likely constrain bringing new copper mines into production and push costs up. In fact he said based on the last big boom in the early 2000s there is likely to be a lot of input cost and capex inflation on large copper mining projects. In other words highlighting the high degree of risk in Solg's official "build it ourselves" line.

Surprised at the notification process. Why not give notice on Friday by RNS for London and SEDAR for Canada at the same time. Assume the notice will come by RNS tomorrow morning.

Don't think it's anything to do with a bid for the whole company. We'd have had an RNS telling us bid received and I would expect a tender process with prospectus etc etc. I wouldn't expect the company itself to call an EGM in relation to a takeover bid received.

Whilst I want to get excited here, I'm just hoping whatever it is doesn't involve a large dilutive equity issue, which will be strongly supported by major institutional holders and just dilute us PIs down.

Looking forward to tomorrow morning and an RNS.

DBW I was referring to Colonel Drake's comment "shows how easy it is to manipulate the price or keep it in check."

You would expect their holdings to fluctuate a bit as investors buy or sell the funds and ETFs that hold the shares, or when the indexes that the ETFs track are periodically rebalanced.

Why would BlackRock want to keep the price in check? They're an asset manager, they buy assets with the intention of them going up in value.