Member Info for rcgl2

*not interested

Covgaz (and slug), honestly I don't know. Could well be someone trying to lower the closing price. But my point is, if that is the case, it will be some prop shop or hedge fund doing it, not BlackRock. And not any other long only fund either.

Equally, it could be dealers and market makers just wanting to offload shares at the end of day to make sure they don't exceed overnight position limits. Market makers make their money on the spread remember, they are interested in taking price risk on the name.

Colonel. That's hardly the gotcha you think it is. It should be obvious from my posts that I work in financial services. Anyone working in markets for any large bank will have BlackRock as a client, they are everyone's client just as they are everyone's largest shareholder because frankly they are massive. It's no surprise that I have dealt with them over the years.

As usual on this board when anyone who actually works in finance at the moment (and not in the 70s and 80s) posts about markets based on their own experience, there are many people who would rather stick their fingers in their ears and say la la la I know best it's all a big conspiracy and the share is being manipulated.

Smith trader, spot on.

"Blackrock are likely working for BHP in same way Citi are working for SOLG. Standard stuff."

Colonel that's a ridiculous statement and you clearly don't understand the difference between the buy side and the sell side. Citi are an investment bank. Blackrock are an asset manager. Also having had various dealings with them over the years I can assure you that Blackrock are not doing BHP's or anyone else's bidding.

And no I don't work for BlackRock if that's what you're implying. I just find the constant scaremongering and conspiracy theories irritating because they perpetuate a lot of emotionally charged nonsense about how markets work.

SharketMare, you are right.

Blackrock has $9.5 trillion of AUM. If you really think they are wasting their time attempting to pin tiny little Solgold's share price down so be it. I'd rather confront my own decisions to buy and hold a share that the market generally is not buying (yet) rather than blame our lack of performance on some dark market forces working against us. Also, if they did have the ability to magically control the share price, which they don't, surely the better strategy would be to keep pushing the price up, not down. Either an acquirer would then have to pay more to buy the company, or Solg would be able to raise more capital from a position of strength with less dilution for existing holders, Blackrock included and perhaps actually achieve the goal of producing and unlocking greater value.

Why do they buy and sell? Rebalancing, index tracking, and due to fund inflows and outflows, I assume.

https://twitter.com/michaelbatnick/status/1477285542572314626

Thought this may be of interest to people who think that Solg's poor SP performance is due to Blackrock trading nefariously around the edges and say things like "well Blackrock has to make its money somehow". This is how they actually make their money. From the iShares S&P 500 ETF on which they charge a practically non-existent 0.03% management fee, they are making $100m a year in fees from $330bn of assets. That's $100m from a single ETF out of the hundreds of ETFs and funds they manage.

This is why I do not believe they are fiddling around with their few million Solg shares attempting to make a couple of thousand quid and definitely not trying to hold the share price down. The more AUM they have, the more they make in management fees. The better their funds perform, the more AUM they attract. They better the stocks in the funds perform, the better the funds perform.

Happy Christmas everyone!

Rich, addicknt, my guess on why BHP haven't made a move yet is that it's about de-risking as you said, and maintaining optionality. As it stands Solg is doing the work to de-risk Alpala through feasibility studies, and to prove up the other targets, but BHP isn't on the hook for funding all of that work itself which it would be if it bought Solg out. It's contributing its share of funding via periodic equity raises but only a share alongside other investors. In the meantime by sitting there on the register with its 13% of Solg it has one foot firmly in the door and it says to any other interested parties that if they want these assets then they are going to have to go around BHP to get hold of them.

If any of the assets turn out to be uneconomic then they may have to write off some of the option premium they've paid in the form of their Solg investments, but it's a lot less than if they had been funding the whole lot singlehandedly. Once the assets are suitably de-risked and they know they can mine them profitably then I don't think they mind paying more to secure them then, rather than paying less now to buy a load more risk. I'm guessing BHP would rather pay $3bn to acquire what they know will be a 50+ year mine that will generate many billions over decades, rather than have paid $1bn last year to get it as cheap as possible only to find that it isn't economic and they've wasted $1bn to discover that.

I think it's worth bearing in mind that royalty deals are not some sort of free lunch. It may avoid equity dilution but it is permanently (or semi-permanently depending on the terms) impairing the asset from which returns are meant to flow to the equity holders. Franco took 1% NSR on Alpala for $100m so for $1bn it will mean a pretty material NSR. There are also some locked in minimum payments due from 2028. Considering Solg's cost of funding in any form is going to be higher than a supermajor's, they don't want to erode all the profits that would otherwise be generated by going to production. The whole point of going alone is to achieve more long term value for shareholders, not to get it to production and just about break even to prove a point.

CD - I agree, and I'm sure most of the fund managers curse ESG every time they have to think about it. But what I mean is, if BHP starts kicking up a public fuss over ESG, it's very difficult for the larger investment managers not to publicly agree with them. We don't want BHP to start putting anyone on the spot in public, so they feel obliged to agree irrespective of their real view.

Hi Lunch - the thing about the cash box mechanism is that it's a blatant workaround of the statutory pre-emption rights, which are there to protect all shareholders, small and large, against dilution. The pre-emption rights apply when shares are issued for cash consideration. The cash box structure uses an SPV and payment in redeemable preference shares, so it's technically not cash consideration which means that the pre-emption rights don't apply. It may be legal but IMHO it's not in the spirit of the rules and having looked into it a little after Solg's usage it seems the Pre-Emption Group doesn't see it as different from a normal placing and recommends that it should be used on a "soft pre-emptive" basis, which is what Solg did when BHP, NCM etc all participated. Which is to say that it was OK with the major shareholders' blessing, but if Solg tried to keep using repeatedly and without BHP's and NCM's agreement I think they would kick up a huge stink as Addicknt just said.

They are already using best governance practice as a stick to beat Solg with in terms of election of board directors and NM's influence. If Solg tried to get too cute and used a cash box placing against BHP's wishes I think they would make a huge noise about governance, shareholder dilution etc, which might be hard for all of our other institutional investors to ignore now that they all claim to make ESG part of the very fabric of their investment outlook. The last thing Solg need's is a more widespread shareholder revolt whipped up by BHP acting as the ESG white knights.

So seems only approx 1.25bn shares voted on most of these, about 55% of total voting rights. Seems quite low, I wonder how many are voting live? None?

FYI Lewis Hamilton pays tax in 9 different countries including the UK. According to HMRC data in 2019 he was in the top 5000 UK tax payers. Considering 31,000,000 people pay income tax in the UK that would put him in the top 0.016% of UK tax payers. And that's someone who isn't permanently resident here. So I suspect he's given back a lot more than any of us here. No doubt of course Melville a lot of your investments are held in ISAs or SIPPs so you will pay no tax on the gains or income for them? Or do you choose to hold all your investments in taxable accounts so that you can pay more tax than you need to for the good of the nation?

I guess we all have our own feelings about where the power lies and how it's distributed. I wonder how much influence BHP have on their own though. Combined with NCM they can exert quite a lot of influence because between them they can block special resolutions, meaning blocking the disapplication of pre-emption rights. Using the cashbox placing was a neat trick but to my mind was only possible with the blessing of the major holders, who participated. I don't think Solg can rely on those types of moves for all its future funding needs, which brings it back to the two majors on the register being willing to commit large amounts of capital in future fundraises. A combined 26% plus deep pockets gains a decent amount of influence.

However, if NCM aren't on side, is BHP's control actually so strong with only 13%? We are all just guessing but to me the fact Twigger went public againts BHP on the eve of the AGM suggests that maybe he is confident of passing all the resolutions he needs without them? Although who knows really...

Hi RK, I know it's a big bugbear of yours that a large proportion of the votes in favour of Mather were his own, but surely that's the whole point? The larger your shareholding, the greater influence you can exert over the decisions of the company, even if those decisions are in your own favour. It may be that "only" 24% of the non-Mather votes voted for him, but all those shareholders have chosen to make/maintain a holding in a company in which Mather controls 20% of the voting rights so that has to be factored into the ability anyone thinks they have to influence company control.

ToS - it's the votes cast at the meeting that count, not the total number of voting rights.

"In order to be passed, in accordance with the requirements of the Act, the ordinary resolutions proposed must be approved by a simple majority (i.e., greater than 50%) of the votes validly cast by Shareholders at the Meeting in person or by proxy."

"In order to be passed, the special resolutions must be approved by not less than 75% of the votes validly cast by the Shareholders at the Meeting in person or by proxy."

Last year I think approx 45% of votes cast were against NM's re-election. In the press this was reported as "nearly half of shareholders voted against". In reality it was 45% of the approx 80% of shareholders who voted at the meeting, so around 36% of total votes. So really closer to 1/3 voted against and 2/3 either voted for or didn't bother to vote.

I see what you mean Red... if the news is released now it might just be discounted like all the other undervalued parts of the portfolio. Parachute it into the battlefield of a live bid situation and it could rally the troops for a big push to victory.

I think they already know they have enough votes to carry the resolutions they care about. We saw what happened last year when it was borderline, huge effort to encourage smaller shareholders to vote. No such outreach this year other than Twigger sending his rather provocative letter, so I guess they already know the voting intentions of enough larger shareholders.

Re holding back news as a bid defence, why? If the news would cause the share price to rise which would defend against an offer anchored at today's price, why not just release it anyway and get the share price higher, and head off a lower offer before it comes? Isn't holding back a bit like covering up the true size of your army so that if your enemy launches an invasion, you can suddenly reveal your true strength and scare them off? It would be better just to openly show or even exaggerate your own strength so that your enemy wouldn't risk an invasion in the first place.

Darren, here's some interesting weekend reading about closing auctions from everyone's favourite pantomime villains Blackrock. They talk about the growth in closing market participation which can provide better liquidity than the normal continuous session.

https://www.blackrock.com/corporate/literature/whitepaper/viewpoint-a-global-perspective-on-market-on-close-activity-july-2020.pdf

By the way Slug, I wonder if the part on p6 under Banking Activity Post-Financial Crisis could provide some explanation to your point the other day about people jamming orders into the book at the last minute, presumably with the intention of making sure they get filled regardless... People seem to forget on these boards that market makers make their money on the spread, they aren't generally taking directional bets (risk) on the stock so they may want to end the day flat. Overnight funding costs could be a factor as well. Plus maybe not such a factor on Solg but generally if a dealer is buying to hedge another position they will have already factored their pnl into the pricing of the other position, if dumping your hedge into the close lowers the closing price it doesn't matter if it was the closing price you were hedging....

I know some people are very annoyed at the previous delays to the PFS, especially those who've been invested a lot longer than I have and been waiting longer for it. Personally I've been OK with the last two delays. The first was necessary to re-write the PFS to avoid rushing out a plan that was inefficient, high capex and over-simplistic (KM described it as just an inverted open pit I think). That delay seems worth it if the PFS comes out much more favourably. Also the recent delay is understandable if there are still ongoing optimizations that can be factored in by delaying a few months, especially since the resource at TAM is still growing.

However I feel like any more substantive delays now would be beyond the limit and I'd actually get quite worried then. It would suggest that the whole thing is actually too big for Solg if they can't manage to get the feasibility studies completed despite numerous attempts over many years. Or to be less charitable, it would start to look even to patient investors like the clown show that some already feel it is. It would seriously undermine any lingering credibility of Solg's claim they intend to develop and produce at Cascabel themselves.

So for me this needs to be the last delay I think and not a particularly long one.

Also I think it was ToS (apols if it wasn't) said the other day that now they want to see a more detail plan of how Solg are going to finance this and progress all the assets. This is very much how I feel. When I first invested a couple of years ago, the vague plan that we have been given seemed more acceptable. The point where some meaningful decisions needed to be made seemed a bit of a way off. Well now it seems like it's just around the corner and I want to know what the details are. I've voted in favour of the resolutions but I want to know now how things are going to look over the next year or two. How exactly will Cascabel be financed (not just "we are in talks with interested parties")? How will the rest of the exploration portfolio be funded considering we are drilling like crazy which will be burning through the cash pile? How will the lower priority targets be handled? How will the whole lot be monetised? We can't just keep drilling forever, I want to see a much clearer roadmap of the way ahead for the next 5 years. If a takeover bid comes, it will come, but a much clearer picture of how Solg intends to go on will enable us to assess whether accepting any bid is actually a better option than rejecting it.