The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
One thing to bear in mind, Wyloo actually started the bidding for Noront when they already held 24% of the company. When the competing bids started racking up Wyloo held over 37% of Noront.
So yes Wyloo did fend off BHP, but they were already the largest shareholder in the target.
I get the impression Darryl won't want to use wildly ambitious numbers in the PFS. He's not a typical bigmouth prospector/explorer who has spent his career talking up every rock sample and drill core. Since he spent most of his career at BHP I assume he knows exactly what will be seen as credible by majors and potential funders.
zoros/addicknt/SM - agreed and between you I think you just answered the question as to why BHP hasn't bid for the whole of Solg yet as everyone expected them to... because they simply don't want the whole of Solg. What they want is Alpala. I assume if Porv or Rio turn out to be economic mines they may want those too one day. But what I don't think they want is a large exploration portfolio across one frontier jurisdiction, which is what they'd be getting if they bought Solg outright.
They have said that exploration is one strand of their strategy to source future facing metals. But they are not an explorer, so why take on a shed load more licences in Ecuador that all need work and spend in order to maintain them. Solg's portfolio is already too big for Solg itself to concentrate on hence they are trying to JV a few of the low priority targets. Given that Solg is almost entirely valued on Alpala at the moment, why would BHP want to take on the rest of the portfolio for free only to have to spend a load of time and money divesting themselves of it. Being a global mega miner, they want a portfolio of global mega mines of which Alpala can be one. They don't want a whole load of little greenfield sites up mountains in Ecuador and hundreds of local employees to have to manage, imho.
As addicknt said, taking a stake in Solg has given them a foot in the door. Most people seem to think the assets are BHP's for the taking. They are happy to spend what to them is fairly small change to buy the optionality of virtually having first refusal on the key assets as they get derisked. And they are happy for Solg to undertake that derisking under BHP's watchful eye. Even if Porv and Rio turn out to be decent mines, are BHP really going to want more than 3 working mines in Ecuador in say 10 years time? That's quite concentrated country risk for Latam, especially in light of what's going on in Chile. I think they are happy to flag down each cab as it comes off the rank but I don't think they want all the hassle of owning their own taxi firm.
"I hope you've learned your lesson cleverthoughts as you're released from suspension tomorrow, that spamming this board and pog with negativity will be silently reported and next time you might be banned." That was you on the POLY board the other day Ray.
So basically if someone posts any negative comments on a share you're invested in such as GGP or POLY, you go running to teacher to get them banned for "spamming the board with negativity".
But if it's a share you're not holding such as SOLG, your constant negative comments are providing "balanced views"...
For someone who keeps bleating about not being bullied or silenced off the boards you seem to spend an awful lot of time telling tales on everyone else and trying to get them banned.
And I know you've got some cosy relationship with the site admins, I can see how fast posts are getting removed here... they even deleted some on Sunday, despite the fact they never bothered to do anything until Monday morning when this board was getting spammed to oblivion over the weekends last year. Can't even fight your own keyboard warrior battles...
Fine so how do you justify the fact that you got Miagi banned from LSE for daring to post the balanced view on the GGP board that it was overvalued at 35p and likely to come crashing down?
IIRC everyone there was so busy having a giant circle jerk that anyone who said it was over valued was hounded off for being a disruptor or a de-ramper. When in fact they were spot on seeing as it's now trading in the 13s.
We don't need a board sheriff here thanks, especially one who doesn't practice what he preaches.
Go ahead and report me anyway, since you seem to need to report everyone. I don't care.
I had just assumed (without having given it much thought or gone back over the timeline of posts, tweets and drill results in detail) that they drilled some cores which looked visually spectacular and they had very high hopes for the assay results, and in fact they turned out to not be as good as the visuals suggested. IIRC Jason Ward tweeted a picture of some cores with a comment along the lines of "here we go again" implying they looked like they could be as good as the headline Alpala holes... But I just assumed that when they were assayed they didn't live up to expectations.
I might be completely misremembering, but I didn't think it was intentionally misleading, more just loose talk that didn't turn out to be accurate.
Addicknt, a question I'm still not clear on: what is the likelihood of a bidder for the whole of Solg (BHP or BHP+NCM) being satisfied with not getting 100% of the company? A bidder needs 90% to squeeze out the minority. We know NM effectively controls almost 20%. How likely do you think it is that BHP or whoever will be happy with just obtaining majority control regardless of whether through an agreed or hostile bid? Is a going to be conditional on 90% takeup or will there be a lower threshold.
For me this whole debate about approved vs hostile bids is a bit of a red herring. It all boils down to will enough shareholders accept the bid to get it over whatever threshold the bidder wants to achieve. Will this be 90% or not?
Out of interest does anyone hear from Fawzi these days? At times last year it seemed like there was almost constant dialogue between some posters here and the company. For the last couple of months I've hardly seen anyone mention anything. Has he stopped responding? Have you guys stopped asking? Did he ask you to not post replies on here?
CD not sure if you were replying to me or Copperpot but yes agreed, that's what I meant. 4 years ago may have been early when BHP bought in. Now with PFS a few months away and DFS not far behind I think it's the time to buy the asset and get mining.
Yes I read that as carrying out exploration (either under their own name or via investments in companies like Solg) to turn up new discoveries, or making early stage investments the likes of which they already made in Solg 3 or 4 years ago, isn't going to move the needle. Now they need to acquire some producing, or perhaps de-risked shovel-ready, assets.
For the takeover enthusiasts... https://www.ft.com/content/5cf59e4c-c79d-4cba-9ed4-cd549b3c5e1f
Christopher LaFemina, analyst at Jefferies, said exploration and early-stage investments would not move the needle for a company the size of BHP and therefore it needed to “go big” with M&A and move soon.
“We believe that the longer it waits, the higher the price it will need to pay. The potential targets have likely been identified by the company. The talk of M&A is not just idle chatter.”
Looking at the MD&A it reminded me how surprised I am that Jason Ward came within a whisker of getting booted from the board, 56 to 44 or thereabouts.
I know large shareholders were not thrilled with management and I expected Moller to go, but I always thought it was generally accepted that Solg were doing all of their exploration right at least and that was JW's area.
Twigger was re-elected comfortably by comparison so his public swipe at BHP was obviously fine with everyone else.
BNc your 7.48 post I totally agree with and recommended. Those are the facts.
Your 9.22 is just speculation though. For all these theories about BHP wanting to get this on the cheap, the facts just don't support it. We know what shares they have bought because we are always told when they participated in a placing. In fact if you look at the large stakes they acquired a few years ago they were willing to pay a premium and accept a lock up.
From the horse's mouth:
"BHP has agreed to pay 45 pence per SolGold share, which represents a 32 per cent premium to the 20 day volume-weighted average London Stock Exchange price of 34 pence per share as determined on 15 October 2018."
"BHP has agreed to pay 22.15 pence per SolGold share, which represents a 9.3 per cent premium to the 20 day volume-weighted average London Stock Exchange price of 20.26 pence per share as determined as at last close on 22 November 2019."
Of course they'd rather pay as little as possible for any acquisition, but I just don't think it's plausible that one of the world's biggest mining companies is going to engage in shady market manipulation to suppress the share price of a target. If you spot suspicious transactions in the closing auction (someone offered 200,000 shares 0.5p below the bid, shock horror!!) it's much more likely to be some wannabe Hound of Hounslow sitting in his parents spare bedroom thinking he's a trading genius. It's not BHP fiddling around over pennies. If they really wanted to tank the share price they wouldn't have laid down a marker of 45p a share a few years ago.
If someone is acquiring the whole company the DD isn't just limited to assessing what's in the ground and the economics of extracting it. They will also need to do all the other stuff like tax, corporate subsidiary structure, checking all the licences, permissions, authorisations etc making sure nothing adverse is triggered by a change of control, all the employment law stuff around employees in Aus, UK and Ecuador, pension arrangements, office and other real estate leases etc etc.
Is a lot of this stuff mind numbingly tedious for all the juniors who have to trawl through everything and compile all the DD reports? Yes. Does anyone realistically expect that the deal will be abandoned by some minor employment law issue? No. But there are best practice processes that should be followed so it's extremely unlikely anyone is going to make a bid that isn't conditional on DD being satisfactorily undertaken imo.
It's not clear how much of this could be done in advance, depends if Solg is running a data room and giving access to anyone I guess.
There are examples of takeovers where DD was either not done or wasn't done properly, usually as a result of hubris and ego. RBS's consortium taking over ABN Amro is a well known one, which basically bankrupted RBS.
So despite people complaining that they hadn't heard from DC, shocking lack of news etc etc, it turns out that in his first 2 months in the job he's met with NCM, met with BHP, met with CGP, flown to Ecuador and visited the sites, met with President Lasso and other Ecuadorean representatives, has now flown to London judging by the decor in that hotel room, and is now doing a series of print and online media interviews with plenty of things to talk about and a pretty coherent plan for how he wants the next year to unfold. I think he's doing ok.