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I've just been having a look at the BHP subscription agreement from October 2018 where they agreed to the 2 year standstill, amongst other things.

The Completion Date for the subscription is defined as 19 October 2018. The standstill period is defined as ending 24 months after Completion (unless third party bids etc).

Therefore just reading the agreement on its own, the standstill should in fact run to 19 October 2020, as CGP have stated. There have been multiple subsequent releases by Solg giving the end date as 15 October. So I guess either there has been some subsequent agreement between Solg and BHP amending the date (seems rather trivial so why bother), or Solg have just made a mistake over the date.

Here are the relevant terms from the agreement (it's on Sedar uploaded 25 Oct 2018 if you want to have a look):

Completion means the completion of the issue and allotment of the Subscription Shares to the Subscriber on the Completion Date, and payment of the Subscription Price in accordance with this agreement, and Complete means the completion of the Subscription.

Completion Date means 19 October 2018, or such other date as is agreed between the parties in writing.

SolGold Standstill Period means the period commencing on the Execution Date and ending on the earlier of the date

(a) which falls 24 months after Completion;

...

Red, yes it is, thanks for the link!

https://www.visualcapitalist.com/12-stunning-visualizations-of-gold-bars-show-its-rarity/

Hi Colonel - do you think there's any chance of information overload if they release too much information too quickly? In terms of NM trying to get the SP as high as possible, will there be diminishing returns if he fires off an RNS pretty much daily? Does the market need time to digest each one and consolidate any gains? For example, release a juicy RNS each week for several weeks, rather than in bursts of several a week? Or do you think at this point it's a case of keep the news coming thick and fast, maybe the whole is greater than the sum of its parts so to speak?

Just in case there was any confusion, when I said there was fuzzy thinking in that claim, I was referring to the idea from pundits of US returning to gold standard to prevent devaluation.

Redknight I think we are on the same page. Gold is going higher and we don't want a return to the gold standard!

Regarding another major buying in to block NCM and BHP gaining control - seems pretty clear that the reason any major has or would invest in Solg is to try to gain full control of it. If you tried to get another major onboard you would basically be asking them to invest a chunk of their cash in order to make it impossible for themselves or any other major to get control of Solg. I don't think any major would go for that because they would essentially just be making an equity investment rather than lining up future mining reserves. If you wanted another large holder on the register wouldn't it be better to get a large commodities/resources fund, or sovereign wealth fund or pension fund to invest on the understanding they would be holding for the long run and not likely to accept the first buy out offer that comes along?

Either way I think that's a fairly moot argument now because we are well funded through the current drilling phase and the Porvenir "discovery" has changed the lanscape somewhat. Feels like Solg has the best defences possible, adding another 10% shareholder won't change much. It's now a case of NM playing the hand he has got as best as possible, which I have confidence he will.

Seems to be some fuzzy thinking in that claim. Firstly why would they want to stop the USD weakening? The only realistic way to pay off $trillions in debt is to inflate it away by devaluing the currency. If you fix the dollar you would face the problem that all the debt you accumulate today has to be paid back in the future at today's value. If you allow the currency to continually weaken then you can borrow today and pay back in devalued dollars in the future. The Fed has just committed to allowing inflation to run above the 2% target to achieve an average (over an unspecified time period, which is basically the authorities giving themselves the leeway to try to stoke material inflation as they please).

Also the logic of that plan doesn't make sense does it, because today an ounce of gold buys $1900. If you fix the rate to be one ounce of gold buys $10,000 then you have instantly devalued the dollar by over 5 times.

I think it's more likely that gold will reach $10,000 an oz precisely because there is NOT a gold standard, and the dollar will continue to be devalued by all the money printing currently taking place.

So if today's RNS had been released at 7am instead of intraday, would we still have had that sell off this morning? Would it have stopped the selling in its tracks?

Still not totally sure why people suddenly wanted to sell off large amounts of Solg shares today, having sat there all day yesterday fairly flag and not selling, but one day closer to another piece of news being announced (which duly happened this afternoon).

By the way, I'm not concerned in the slightest by one down day. Fundamentals have only changed for the better, healthy correction, shake out weak hands, needed a breather, ignore the short term noise etc etc. Just wondering about the day's trading out of curiosity.

A sale of ENSA would be a share transfer.

Addicknt - I was about to post the same thing. The Alpala concession and presumably all licences, permits etc are held by ENSA. I do not see why selling all or part of ENSA would cause any of those licences and permits to become invalid, unless there are change of control clauses within them. We have not seen any evidence of that.

That is not a thought experiment that can test his hypothesis because it is mainly speculative questions that can be answered with speculative answers.

Who would this concert group consist of? >> BHP and NCM. Or BHP and Vale. Or NCM and Barrick. Take your pick.
What would the Ecuadorian government make of this? >> With sufficient assurances from the new owners that all of the Solgold ESG commitments would be upheld and a guaranteed path to monetization of the resources, they would be happy.
Why would the companies you put in this concert group, be happy, with just a slice of Solgold, when most of the debate, is about a major owning them? >> Because Solgold has potentially 3 tier one assets and about 9 other unexplored licences as well. If they were interested in acquiring Solg on the basis of Alpala alone, they will be happy with 1/2 of Alpala, Povenir, La Hueca, Rio Amarillo and the rest. And sharing the financial burden reduces the risk overall to each party.
How would the agreement of blocks of shares, be acquired, from such a diverse book, and at what price and why? >> They would put a £3 a share offer to the market? Seems a pretty straightforward way to find out if a majority of holders are happy with it.

Hi Grundles

(iv) Anti Collusion

BHP agreed, for a period of two years (to 15 October 2020, and subject to certain exemptions), not to discuss or collude with other shareholders in relation to a change of control transaction of SolGold or an acquisition of additional shares in SolGold above the minimum permitted threshold, without SolGold consent.

It wouldn't be a great look for BHP to blatantly breach its contractual obligations in its shareholder agreement with Solg, by discussing and colluding in a deal with NCM during the anti-collusion period.

TheItalian I think you are right that even if BHP was super keen two years ago, they need to get the formalities such as PFS (at a minimum) and DFS sorted before they went any further. On that point, I think comments from CGP such as "BHP won't want to rely on Solg's PFS and will want to do their own" are a bit misleading. It was only end of 2019 when BHP made its last investment, and at the time it was announced:

"SolGold has invited, and BHP may provide, secondees for the technical effort for the completion of Feasibility Studies at SolGold's 85% owned Cascabel project in Northern Ecuador and regional exploration effort."

To me it suggests that BHP is fine to let Solg keep working away on the feasibility studies, while they keep an eye on it and provide any expertise they can. Does not suggest that they would have any intention of bidding prior to now, even if they do intend to get more heavily involved in Alpala after the resource is more fully proved up.

Earthling - correct, the offer is made to all CGP shareholders, each of whom is free to tender their CGP shares if they want to accept the offer. There is no single yes/no vote on the offer. The CGP board recommended that it be rejected, and apparently a 65% majority of holders already confirmed that they wouldn't tender their shares. Bob Sangha, Greg Chamandi and Irwin's funds between them own just over 40% anyway. Offer is conditional on 50%+ acceptances, so only takes a few more than those 3 to reject it anyway.

Hi smickster, I didn't mean BHP teaming up with CGP as such, I just meant onside as in willing to sell their Solg shares. If anyone made a bid for Solg it's an offer to all shareholders, what I meant was if BHP and NCM together have 27%, it would be a useful addition to know that they pretty much have another 7% of Solg shares in the bag from CGP. I was just basing that on the fact CGP seem to be desperate for Solg to get taken over asap rather than hold on for greater value down the line. Also that doesn't address the CGP 15% stake and looming capex requirement, I just meant purely in terms of them being a willing seller of 7% of Solg.

Thanks for the detailed explanation.

By the way, I'm inclined to agree with you on the register point. I think Earthling is correct, if BHP and NCM teamed up, with CGP onside too, it becomes much harder to defend. But if the two majors don't team up then I think you have multiple fairly substantial holders but none with a decisive base. Which means as I said the other day, if someone starts bidding, and knowing that they clearly want this, all the other holders just keep saying no until a sufficient price is achieved. And if that price isn't offered, just carry on to production.

Hey Quady. Just for discussion's sake (not argument's!!), why do you think that no one will pay full price for this? I have seen you make this statement several times. If you look at the history of corporate takeovers/mergers, they are actually more often than not unsuccessful, in the sense that the acquirer often overpays and fails to realise the value they expected to achieve. There are countless examples of companies overpaying for targets, often having thrown caution and DD to the wind and as a result of ego and di ck-swinging by the CEO.

Why wouldn't a major pay up big bucks to secure what is clearly an incredibly valuable portfolio? Adding a couple of billion to the takeover price would probably be paid back over the next 50 years many times over given what Solg has in the ground.

People thought Zuck was bonkers when he paid $1bn for Instagram back in the day. In hindsight it was a bargain.

Hansthedude - the potential rights issue / equity issue refers to Kier raising funds by issuing new shares into the market. Standard Life selling their shares doesn't affect the number of shares in issue, they have just changed hands in the market but no new funds have been raised for Kier.

I think the effect of ASL selling down their holdings is that it will have put downward pressure on the share price, which makes a rights issue less likely. The lower the share price, the more shares kier would have to issue to raise a given amount of money, which means more dilution for current holders. As the rights issue is offering the new shares to the existing holders it would be unlikely many would subscribe, which I think was the case with the previous disastrous rights issue that tanked the share price. Now that ASL have stopped selling, if the share price rises, I guess you could say it increases the possibility of a rights issue occurring. However, I personally think the effect is negligible and a rights issue anywhere near this price would be a disaster anyway. Others may disagree.

Well you'll be able to indulge in a lot of cars, stars and caviars when this achieves its full value.

I want £2+ now if it gets taken out. Have plenty of time on my side so happy to hold til production if it can achieve more than that. £7.40 would be my golden number (dreamland).