Member Info for rcgl2

I don't understand why doing an IPO of ENSA would help the funding situation in any way? Solg is currently valued pretty much entirely on Cascabel with very little value attributed to anything else. How would a spun out ENSA have an easier time raising nearly $3bn capex than Solg currently would?

And what would be the benefit to us as shareholders to sell off part of the asset and presumably end up holding shares in another listed company? Why not just raise finance in Solg as it is today? How would it please the two major shareholders who want Cascabel for themselves? Wouldn't it be easier just to sell it to them or to let them earn into it by funding the development or something?

Also on a practical level how would the spun out entity operate? Who would run it and manage it? There's enough moaning on here about Solg management not being up to the job and key appointments taking a long time to fill. How would the split work between Solg and ENSA? It's not like it's a profitable operating division than can be spun out as a standalone business. ENSA is just a holding company through which Solg operates Cascabel. It would be easier to sell it in a private transaction than IPO wouldn't it?

If Solg wanted to spin out anything I'd have thought some of the less advanced licences in other subsidiaries that could just be floated as small early stage junior explorers?

I think it's wishful thinking to conclude that the fact Solg has discovered financial impropriety and taken various steps to avoid it happening again means they are about to be taken over. If anything it suggests they are not intending to get taken over any time soon, hence they want their house in order. Why would they hire a load of additional local finance and accounting staff if BHP were about to take them over and all local finances etc would then be under BHP's existing systems and controls.

When you discover a fraud in a public listed company you need to do something about it and make sure it doesn't happen again whether you're getting taken over or not.

Add, agree that's a slightly odd reason to give about why JW stepped down, considering they already pretty much gave a different reason in the MD&A when they addressed the votes at the last AGM. They have said major shareholders want to see a more independent board, so having DC, NM and JW all on the board was tipping it too far the wrong way. They've committed to putting all directors up for re-election at the next AGM as per the code and JW got a lot of votes against last time anyway, therefore had essential no chance of getting re-elected at this year's AGM.

To me it sounds like local companies or individuals have been invoicing for services or labour that they didn't provide. I assume in running the exploration camps and drilling rigs etc they use a lot of contract labour and services. Sounds like alongside all the legit invoices some made up ones have persistently been finding their way through the payments system.

Is it just people spotting an opportunity for a bit of grift? Or is it greasing the wheels with the locals? Would it surprise you if the village bigwigs who live around the areas where Solg has its camps might have sons or nephews who were taken on as contractors but might possibly have accidentally forgotten to ever show up to work?

I notice the action steps include better procurement processes and ABAC assessment and training as well as hiring some better local finance and accounting personnel.

It sounds like (and is) a large amount of money, but over the course of 4 years probably non of the spurious invoices was ever so large as to set off an alarm bell.

I'm not condoning this of course, this would just be my guess at what's being going on, rather than some rogue employee just stealing $4m by themselves.

Thanks Shippy. I'm not in direct contact with the company but was going to say anyway feel free to cut and paste that if you are.

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 ;-)

Thanks buddy

Buddy the retail refers to the investors, not the businesses they invest in. Retail is indivual private investors like ourselves. As opposed to professional institutional investors.

Lunch - "It's almost as if a process is about to kick off"

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!

RK how do you hold your gilts, do you buy them directly or through an ETF or something? What's your yield on them?

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.

That would be almost 400,000 times more gold than has ever been mined, so the price of gold would drop to about 0.5 cents an ounce.

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.