Member Info for rcgl2

Happy to be proven wrong on that of course!

If you look at the list of items that still needed to be completed to finalise the PFS, it looks more like 2-3 months' work rather than 2-3 weeks. Maybe sometime end of November, early December is more likely.

I guess the reason offtake/streaming is more expensive is exactly because you are paying in the future and not paying anything upfront, and paying up front is what I am struggling to see Solg doing.

I'm not convinced there is a huge market, if any, for ultra high yield zero coupon bonds. Also that is again pushing the problem down the road as it involves paying it all at maturity... basically the number of claims on the revenues once production started would be such that the return to Solg itself would be so reduced or delayed that you question if it would actually be worth taking it to production anyway, with all the associated risk.

What you don't want is for Alpala to go from being the flagship project that Solg was riding high on, to becoming the albatross around its neck that sinks it and takes all the value from the other targets down with it.

Anyway, I guess we will find out in due course if Ingo works his magic...

Anyone with more experience of such matters able to shed some light on how debt funding would work because tbh I can't see how it flies. Let's just say for sake of argument Solg isn't taken over, doesn't do a JV and doesn't sell Alpala. So it finances the construction itself, through a mixture of debt and offtake/streaming finance. Total capex is approx $3bn, so for example if $1bn of this was debt and the rest streaming, I still don't see how Solg would service that debt between drawdown and eventual payback.

Apparently Alpala will take 5 years to build and start producing. Payback period for financing is what 4/5 years according to the PEA? But that still means a very long period where there is some if not all of the debt outstanding. Just prior to production commencing in the above example there would be $1bn debt. As a crude yardstick, Newcrest sold a 10 year note in May this year at 3.25%. NCM is BBB rated so just IG, Solg obviously would be junk so I don't know what rate would be demanded for it to borrow a billion but let's be generous and say 5%. So that would equate to an annual interest payment of $50,000,000. Where does an explorer that has no revenue and is burning cash to keep exploring come up with $50m a year?

This is just my very crude brainstorming so likely to be missing some key elements of how this could all work. Opinions and greater expertise welcome please.

After feeling mildly disappointed each day this week when there wasn't an RNS, I'm now kind of hoping there isn't one tomorrow if the markets are all having a massive wobble. Would prefer markets to stabilise before they release the next piece of stonking piece of news.

Miagi yes agreed. I meant that given $2.2trn was already committed in the first package and approx $2trn more will be coming in the second, the argument over the $400bn difference seems a bit pointless at this stage... as you say, it's pure politics.

No stimulus now just means even more stimulus in a couple of months time doesn't it. Ridiculous that the two sides in the US can't agree whether it should be $1.8tn or $2.2tn... seriously! And Fed balance sheet went from $4tn to $7tn in 3 months...

IMO there's only one end game here and that's more massive money printing and govt spending, and much higher precious metals prices.

Was Solg sitting on a Tier 1 copper/gold asset when you invested? Yes.
Is Solg still sitting on a Tier 1 copper/gold asset now? Yes.
Is Solg due to release the PFS for this asset in the next few weeks? Yes.
Since you invested, has Solg discovered another potential Tier 1 copper/gold asset? Yes.
Is Solg likely to release news very soon of further visuals and assays from this new discovery? Yes.
Does Solg also have multiple other highly prospective targets that it is currently drilling? Yes.
Is the share price today 34% higher than it was a month ago? Yes.
Is today's price drop anything to worry about? Nope.

To clarify, that wasn't an attack on what has been posted! Just trying to wrap my head around the possible options if we want to progress Alpala without selling it, doing a JV or being taken over wholesale. Especially as Solg itself keeps mentioning they are working on this as the financing solution.

What sort of split between debt and streaming finance are you envisaging? Total required is approx $3bn isn't it?

At what rate would Solg be able to raise debt funding and how would it service the interest payments if Alpala production is 5+ years away?

Liking it Red. Silver, Solg and Merian G&S now accounting for something ridiculous like 85% of my entire profits ever. Fortunately got keen on PMs before covid arrived and triggered even more money printing.

Hi Red, however don't forget TINA (there is no alternative). In a world of ZIRP and QE many investors have nowhere else to go except overpriced equities such as FANG etc.

Personally I think there is an alternative, and it's GSM (gold, silver and miners).

It was a Moneyweek tip that put me onto Solg in the first place. The way they described it was: Ecuador is the only country on the Andean copper belt that hasn't exploited mining; that is now changing and the Ecuadorean mining industry is just beginning to establish itself; Solgold is pretty much the leading explorer and licence holder in the country; it's rare for investors to have such an opportunity to get in on the ground floor when an entire new market opens up like this. And for good measure you could buy in at half the price BHP did.

Let's not forget that regardless of whether Solg gets taken over or not, it's a very good opportunity with great potential upside whichever way it pans out.

Exactly. The FN money was not for the regional exploration unless their was leftover. They have already said they are doing work for the BFS now even while PFS is still being finalised. Spending the FN money means progressing the PFS and BFS.

Hi Mathers, they were trying to buy CGP in its entirety. They offered 11 Solg shares for each CGP share. They would have acquired CGP's Solg and ENSA shares as a result of buying CGP. Jerry's point is that they would also have acquired all of CGP's other assets and liabilities as well.

If Irwin (not unreasonably) expected Alpala or Solg and CGP to get taken over by a major prior to construction, maybe he thought CGP was a better choice because of their "free ride" until BFS, whereas Solg had to keep financing everything. So more chance of being diluted in Solg to get to this stage and potential takeover/sale? But CGP can sit there just ticking over but not financing anything, racking up a debt to Solg that would never have to be paid cos the whole lot was taken out.

Unfortunately now NM has gone off the usual track and is serious about taking Alpala to production.

If CGP are so confident of getting taken over by someone other than Solg, why are they engaging in such a public "for sale" campaign? They have sponsored newsletter articles, done interviews, published a lot of infographic things on twitter and regularly updated their corporate tear sheet. All of which keep reiterating what a good buy CGP would be for anyone wanting a way into Alpala or Solg.

As far as I know that's how you sell a second hand bike. It's not how you engineer a $150m+ takeover. Surely if you want to sell your company you engage your investment bankers to get out there and find prospective buyers. I'd expect Bob Sangha and Maxit to be using all their experience and contacts in the industry to bring in the interested buyers, and I'd expect conversations to be had discretely and privately.

Was the recent publicity campaign just aimed at retail investors to try to get the CGP share price up a bit to make the Solg offer less attractive? If they already had a deal in principle with NCM I doubt they'd want them pumping the share price now.

Their recent strategy doesn't feel to me like a company that already has another buyer lined up. The board and insiders already own about 50% of the shares. If they had a buyer lined up they could have just recommend rejecting the Solg offer as too cheap and quietly kept their heads down knowing that it would fail and a better one was coming. Why go to the bother of releasing their statement yesterday if they already knew someone else was coming in for them?

Feel like they have no one lined up and are still desperately hoping to attract someone.

As Miagi said, CGP's point 2) isn't even relevant! Solg has not claimed there is a ROFR on CGP itself, so half of their rebuttal isn't even a rebuttal of anything.

To me it's also only telling half the story to refer to the original earn in agreement because as smickster posted, that agreement is amended by the later termsheet.

We were discussing that clause from the termsheet a few months back, personally I don't think it's entirely clear if CGP can or can't use their ENSA shares as security. It looks like they are now encumbered, but can't say for sure. Could CGP or any potential acquiror of CGP get a clean legal opinion?

Go on Scrat... it's the internet, causing offence never stopped anyone.

Quady - as Redknight has said, the article you posted refers to the situation under US law and is not applicable in the case of Solgold. The UK takeover code is very clear that shareholders should have the ultimate choice of whether to accept or reject a bid, irrespective of the board's opinion. The board makes a recommendation to shareholders as to whether they should accept or reject, but each shareholder can decide whether to tender their shares. If a sufficient majority is achieved as per the terms of the offer, it will succeed.

The article is talking about a situation that occurred under Delaware law as confirmed by a court ruling in Delaware. The reason many large US companies are registered/constituted under Delaware law is that it is very favourable to corporations for various reasons... as exemplified by that ruling.