Firering Strategic Minerals: From explorer to producer. Watch the video here.
Earthling i think they've said it is c$500 per meter drilled so 17,000 m x $500 is $8.5m to spend for the drilling. Look at the drilling cost diagram in the presentations. Plus back office cash burn, exploration of other tenements, PEA (using salaried individual) plus updated MRE (which I assume will use SRK again) will cost as well... DYOR and GLA
I'd say 30m AVG per day for the drill rigs X 10 for the 10 at Alpala = 300m per day = 56 days to get the 17km drilling done. I'd say updated MRE in November / early December. PEA is in progress an I'd guess they are using the live model to gives strong indications to get the PEA together so they just have to tweak once the updated MRE is out. I'd say end of the year for the PEA. Just my own ramblings, DYOR and GLA
... seems to now be open in Quito which should help speed up the assaying as per the last few RNS. Let's hope they can push through the c25km of core ASAP. Just a FYI
https://www.alsglobal.com/locations/americas/south-america/ecuador/quito/quito-geochemistry
...from the Diggers and Dealers conference over in Oz where Nick presented earlier this week. The presenter is Newcrest's General Exploration manager so thought it may be of interest here. I have emailed Solgold asking if they are going to share the presentation that Nick gave as well.
Apologies if already shared.
http://www.newcrest.com.au/media/presentations/2018/Diggers_and_Dealers_080818.pdf
Don't forget Maxit Capital have c19.6m options, half at 14p and half at 28p which expire mid October which will bring in some additional cash if exercised. There are also 22m options at 28p which expire mid October for employees which may not get exercised, depends of what happens between now and then and, more importantly, the SP. GLA
Agreed Earthling the updated MRE will be required to feed into the PEA. That's not to say that they wouldn't release them in quick succession given they are working with a "live model" that enables them to keep updating their resource model with assay results as and when they come in.
I would say that a PEA is a hefty piece of work, with standard elements that need to be included to ensure that they are 43-101 compliant.
GLA and DYOR
Solgold have been saying during 2018 and one of the Analysts coverage notes (think it was NBC) has said H2 2018 so by New Years.... The study Manager only started in April I think? It does sound like a lot of the thinking has already been done.
I would think that they are awaiting the c20km of core assays back so they can remodel and upgrade the MRE. An upgraded MRE (especially with a significant increase to the high grade core) would significantly help a PEA which I think we need to be of the "smash it out of the park" variety.
GLA and DYOR
Hi Pad, great find. Got access to it and rough timeline Jason outlined in the article specifically for Alpala:
2018 - PEA / updates to MRE
2019 - Pre-feasibility
2020 - Feasibility and starting permitting and construction (construction and permitting estimated at 1-year based on Fruta Del Norte experience)
2021 - Production
Annual processing of 55,000 t/d eventually going up to 110,000 t/d
Within 3 years costs would be amortized with 20 mt p/a initially rising to 40 mt p/a
Don't forget this article was from when Jason Ward presented at the CRU conference in Chile back in April. This was before some of the rock chip samples at places like Blanca Nieves that may provide a quicker and easier project to generate revenue to help fund the BC for Alpala... It is an ever evolving project.
GLA and DYOR
Hi FTJNY, the valuations they put on average for each stage from exploration to producing using a spread of companies that were taken over and attribute a per lb of copper equivalent in US $. it's a useful guide and does show a significant increase from phase to phase which is why NM is keen to move this through feasibility and development to get more value from what's in the ground. For those interested the takeover prices per lb in US $ based on industry averages are: Exploration/PEA/Prefeasibility phase: US$0.05 per lb CuEq Feasibility phase: US$0.08 per lb CuEq Development phase: US$0.25 Per lb CuEq Producing phase: US$0.31 per lb CuEq So biggest jump in valuation is to get to development phase which is where NM has been talking about getting to with funding etc.... DYOR and GLA
That is an AWESOME article! Love this - "We've got an emerging ‘go for gold' strategy," Mather explains. "The quickest way to low capex, rapid cash flow is high-grade gold" ... Blanca Nieves potentially? Especially if epithermal high grade open pit...? This may be a stupid question but what is a "conditional total funding package"? GLA
Been research what is contained within a PEA and it seems to be fairly comprehensive. Found a Copper example from last year to give a flavour of what is contained to show the work required to get this report out if of interest to the geeks out there like me.
https://d1io3yog0oux5.cloudfront.net/usgoldcorp/files/docs/43-101_CopperKing_2017_v4.pdf
Sorry and here are the links to the two analyst notes I mention in my ramblings below...
http://www.redcloudks.com/RCKS%20Talk/doc/2018/July%202018/20180718%20-%20SOLG%20-%20Exploration.pdf
https://static1.squarespace.com/static/560a5feee4b0a63bf47c76f5/t/58ae2849be659461bb6bc31f/1487808614947/EchelonReportFeb2017.pdf
The value of what is in the ground is no where near what can be realised by an exploration company due to risk, CapEx requirements, time, country/political risk, commodity prices etc etc etc....
I know people have been going on say 1% of in-ground value but I prefer to go on what some of the analysts (whose day job is to research, research, research etc.... and will have greater insight than a lot of us PIs).
Red Cloud Klondike have a long position in Solgold, have visited the site, provided advice and helped with the raising. Therefore it is a good bet that they may be positive about Solgold. Plus they have a wealth of experience in Exploration plays.
If you go on the latest research note based on the 10 Priority target RNS released on 18th July and scroll to the last page they show a comparison of how the market is rating (through share price) of peers in the Exploration sector.
Now they state that the current inferred (i.e. lower level of confidence) resource estimate release was 16.18 lb of Copper Equivalent (1.08 bt @ 0.68% CuEq). Which, when taking 85% of it and attributing the # of lbs to the market cap, it gives the company a value of C$0.037 per lb of copper equivalent compared to a peer average valuation of C$0.026 with ABSOLUTELY NO VALUE PLACED ON THE WIDER LAND PACKAGE. Solgold are the LARGEST LAND PACKAGE HOLDER IN ECUADOR as an explorer....
Other analysts like Echelon have used a target of $0.04 per lb of Copper equivalent for a valuation of other exploration companies.
I think, at least in terms of short term, when looking at the updates to the Mineral Resource Estimate that is probably a more evidence based approach to the valuation gap (just looking at the Alpala resource and not taking into consideration any of the other tenements...) that investors in the know, or certainly those that subscribe to the Investment analysts over in Canada or the US, will use for a value case.
As numerous people have said there are a huge amount of catalysts that can help:
- Updated MRE = more tonnage and, according to the RNS, upgrades to the high grade core
- The regulation change in Ecuador that means we can drill earlier may be something we want to expedite at Porvenir or Blanca Nieves which could provide some decent core
- The PEA will give the market the first indications of the financial viability of this and start to put headline numbers. There have been a number of takeovers that come AFTER the PEA is released...don't forget that Major Company Boards still have to make things stack up for their Directors and Shareholders, they don't have Carte Blanche to do what they want
- I am intrigued about the delay in the Spinout that Cornerstone are undertaking to spinout all non-Solgold share or ENSA assets into a seperate vehicle, basically packaging the Cascabel and Solgold value for takeover. If this is taken out imagine what it could do for us...
GLA and DYOR... the sky could be limit eventually....but has to be evide
If you're talking about a takeover offer for the whole of Solgold then £4b /1,696,245,686 = Pipedream (or £2.36 per share).
£4b would be too much for Cascabel/ENSA in its' own right, any major would want the land package and potential upside from that as well.
Just my own thoughts, GLA and DYOR
It's Hannam and Partners that visited the site a couple of months back DG1 :)
https://www.hannam.partners/
Forgot to add that the Company has said they produce c10,000 meters of drill core a month so, unless they reduce the number of drills to reduce cash burn, with their 10 rigs (so ((10,000 / 12)) * 10 = 8,333 meters drilled at Alpala a month) they could drill the rest of the meters required in ((177,750-69884) / 8,333 = 12.9) roughly 13 months....
But I think a lot has changed since the SRK report with them finding more and more mineralisation outside of the original inferred and indicated blocks used in the MRE.... plus the find to the north-west with Trivinio may have changed their thinking...
We won't know till we know, basically :)
GLA and DYOR
Hi Pad, they refer to the technical report dated 18th December for detail on the drilling programme.
I've taken a look on SEDAR (https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00043090) and found the 43-101 technical report which was released on the 19th February.
Pages 144-145 relate to the recommendations by SRK relating to the ongoing drill programme at Alpala and the updates to the MRE.
It is pretty specific and outlines specific meters drilled for 2018/19 (i.e. from the date of the MRE) and proposes:
- 7,500 further meters at Alpala Central
- 19,500 further meters at Alpala South East
- 46,725 further meters at Alpala North West
- 104,025 further meters on the greater Alpala Resource Area
This totals 177,750 meters to be drilled on Alpala and, on top of this, it proposes 39,000 meters at other targets in the Cascabel concession.
From today's RNS we have drilled 123,500 meters, subtract the original meters drilled for the Maiden MRE (53,616 meters) and that gives us 69,884 meters drilled of proposed 2018/19 (2-year) drill programme. I.e. c39% complete. Estimated budget is $89.7m plus c$5m for the PEA for the 2 year programme to the end of 2019.
They will need to draw a line at some point as cut off for an update to the MRE. I would suggest that it would need to coincide with the completion of the PEA and needing a concrete (43-101 compliant) MRE to help with speaking to investment banks and to properly look at the initial high grade core to fund CapEx and cover costs in the first 3-5 years.
I would encourage people to re-visit the 43-101 technical report released with the MRE, it has a lot of detail that people may find useful.
GLA and DYOR