Member Info for rcgl2

Not the RNS we were expecting. Expecting a hefty drop but won't be selling... Might top up once I can recharge my ISA on 6 April if the price is still down then.

Red are you not in tin as well? I thought you mentioned that a few months back, I notice this week Moneyweek has picked up on the potential for high tin demand as well.

So what actually happened in the end with the potential "world class gold deposit" at Fauro? That's all way back before I'd heard of Solg.

Interesting they confirmed they do monitor BBs... It's a topic of debate I've seen on a few others as to whether the companies read these boards or not.

I don't know mate, doesn't feel like Solg is currently in much of a position to be dictating generous terms for its next fundraise. The SP now is around 22p. Solg is going to have to offer any equity raise to all current shareholders, because they don't have any wiggle room to disapply the pre-emption rights. They can't do a cheeky $5m with Valuestone alone like they did last year. If they went to all shareholders and tried to place shares at 30p and the major holders all said no thanks, would you or I or anyone else be willing to throw more money in at a substantial premium in order to take up our allocations? And it would be pretty disastrous if they did an equity issue that wasn't even fully subscribed, I think it would look like a sinking ship.

I'm not being negative about Solg generally, the assets are still there, the studies are progressing, the regional news will come in and the investment case is still largely as it was when I invested. I just think now the days of Solg sticking two fingers up at the majors are over and if we have a fundraise later this year, it will be at or around the then current SP and I think the majors will take up all of their rights and a lot of us won't, so a little bit of dilution but not massive at this stage.

I don't really see them taking up the FNV option unless they want an angry Sandeep Biswas all over them in the press.

Well, they pulled them once they became aware that BHP et al were going to vote against them, either directly or from their proxy advisor. Otherwise they wouldn't have tabled them in the first place would they. The outcome is the same.

The major shareholders were clearly not happy with how things had been run, and NM himself said as much after the AGM. NCM were very vocal in their opposition to the FNV deal. So if the board was actually offering an olive branch to the majors, and wanting to work collaboratively with them on future financing decisions, why extend the FNV option?

Sorry we annoyed you, we want to avoid annoying you even more, but we reserve the right to do exactly the same thing again...?

Also if we subscribe to the view that BHP and NCM are now pulling the strings and getting things their own way, having ousted NM and blocked the special resolutions, why would the additional FNV funding option even have been extended? Wouldn't BHP and NCM just have shut it down completely and let it expire on the original deadline if they are now exerting so much influence on funding decisions?

Regarding news, haven't they explicitly said that they are going to provide more comprehensive drilling updates and release news in complete batches, rather than releasing results hole by hole, assay by assay? So no news does not equal bad news. We will just get a much bigger drilling update from the current campaigns when they release the results.

Sorry, to be clear, I was just plucking random round numbers from thin air to illustrate the point. You can instead read X, Y and Z.

Where X is the cost of the block cave. Y is potential net revenue from open cut as the build goes along. And Z is the reduced cost of the block cave (X-Y) assuming Solg does not pay Y out as a dividend.

Isn't the point here that if Solg goes full block cave, as per initial plan, then they have a huge upfront Capex to build it before it begins producing. Given that they have to tunnel down underground anyway, and can potentially do so through mineralisation that would otherwise not be within the block cave, I thought they now wanted to mine that as they go in order to generate quicker and cheaper revenue so as to offset the cost of building the block cave itself?

As in, they could spend $5bn to build block cave; or they could spend $5bn to build block cave but generate $1bn revenue by open pit mining along the way, to reduce the net cost to $4bn.

Am I thinking too simplistically here? What I don't think they will do is spend $5bn to build the block cave and spew out any revenue along the way as dividends, therefore not reducing the net build costs.

Lochranzalad - absolutely spot on. ORR is due to release news Q1. I saw someone said the other day "Q1 does not mean end of Q1" - on what basis can you say that? Q1 means any day up to and including end of March. Still weeks to go. Why you would buy into this and then sell out now when loads of news is due I do not know. What was the point of buying in then?

Anyway, mining sector generally showing a lot of red today. All is fine, I'm just holding patiently waiting for the news.

https://shareprices.com/sectors/mining

RK I think "Debt is a capital item...profits and losses are a revenue item..." is the key point here.

The distinction needs to be made between the balance sheet and the income statement (or profit and loss account).

If I understand correctly, when the company borrows money this debt will be entered as a liability on the balance sheet with a corresponding entry of the principal amount as cash on the asset side. The principal amount borrowed is not shown as income on the income statement.

When Solg is constructing the mine at Alpala I assume it will just show a loss on the income statement for some time as it will be spending a lot of money on construction and not generating any revenue. Regardless of this being funded by debt, that debt principal will not be shown as income and therefore Solg will only be generating losses to start with.

If the income statement is only showing a loss, there will be no profits to pay a dividend out of. And also no profits will have been transferred onto the balance sheet as retained earnings (which I assume is what a company can pay a dividend out of even if it makes a loss for the current period in the income statement). Solg will have no profits and no retained profits to pay any dividend for some time, I am guessing.

The relevant point for commercial banks under Basel 3 is the NSFR, for which purpose of gold will be classified 85% required stable funding factor, increased from 50%. This makes it more costly to hold gold as an asset because the funding requirement is higher. The US position under Basel 2 and 3 is that gold can be 0% RSF if the holding is offset by gold liabilities, so holding physical and selling paper short.

I think the interesting thing is that central banks have been buying gold for several years now. Don't think Basel 3 is going to cause commercial banks to suddenly start buying gold, as it will be costlier to fund.

By the way is there an ORR telegram group?

Are you serious? I was watching this share last year but didn't have any free funds in my ISA, it was pretty much £1.20 - £1.50 for a good chunk of the time. It's now over £3 and I'm kicking myself for not having sold something else and snapped it up around £1.20. And you're panicking because it's come off 20p or so in the last few days? This is a transport company not some FOMO tech stock. Also full re-opening isn't happening for several months yet. Imagine if you went back to 2019 and told the market NEX was effectively shutting its business for just 2 months out of a year...

* when it doesn't arrive, that should say!

Haha nice analogy, let's just hope we don't wake up with a nasty hangover.

In all seriousness, I'm not worried about the SP day to day because so much news is due. While we await the news it might hiss a bit of air... I'm sure the market is half expecting news each day so when it arrives a few more holders might lose interest and head off elsewhere. Q1 still has a whole month to go so we just need to sit tight and wait patiently, the news will come when it comes.

I'm also in Solg and it feels like we are forever waiting for an RNS there while the SP slowly declines - or, falls off a cliff over the last month or two. Just need to stick the course, junior resource stocks are volatile and speculative, that's why the rewards are higher if they come through.

Z it's 4/9 new isn't it? And NM is staying on as a NED. Or are you expecting him to be completely defenestrated from Solg towers once he steps down as CEO?

I'm surprised the election result was weighing this down that much, if indeed the relief of the run off confirmation is what has caused this rise over the last few days. I was obviously way too blase about the election because to be honest there never seemed any realistic chance of Perez getting in and whichever of the other two got in was going to be pro-mining.

Considering all the very real risks that have been effectively chucked out the window in other segments of the markets, seems odd that Solg investors were so cautious over the election...

BN.c haha! Great minds...

Nice pyjamas by the way