The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Ecuadorian Vice Minister of Mines visited Cascabel with some press and they've been tweeting about it. Very good coverage and great article is testament to the CSR work Solgold are pushing on with. Chris Temple (National Investor) is over in Ecuador at the moment and retweeted this article, be interesting to see if he pays Cascabel a visit and updates his subscribers.
https://www.recursosyenergia.gob.ec/autoridades-y-medios-de-comunicacion-constataron-avances-en-cascabel-el-proyecto-de-cobre-y-oro-mas-grande-de-ecuador/
Surely the approach of buying regular small chunks is a good way for institutions to accumulate shares as part of a larger order rather than a massive buy that could make the price soar before they've finished buying??
Quady this bit summaries the increase, you agree tier 1 no? "“We are very happy with the rapid and inexorable growth of this resource and progression of the Alpala project. The high grade, gold rich core of the deposit now contains double the copper and gold at a higher grade than in December 2017. The high grade resource has increased in size by 99% at a 0.96% CuEq cut off to 420Mt @ 1.47% CuEq. Overall, the resource metal content has increased by 77% at a 0.3 copper equivalent cut-off and by 108% at a 0.2% copper equivalent cut-off." This isn't bad is it?
KB007 I think you've got things mixed up between various agreements that are in place.
The agreement between BHP and Solgold has two standstill elements.
1. In increasing their stake in Solgold above the Newcrest level.
2. Buying any shares in Cornerstone or colluding with another organisation in a change of control transaction without Solgold's permission.
Have a read of the agreements (as I have) and correct me if I'm wrong and please let me know the clauses so I can review. Cheers
It's also a cheaper way of getting the 15% ENSA as CGP is currently valued at £114m and a takeover premium would need to be applied for shareholders to vote for it? So say £150m for the Solgold share and the 15% ENSA vs $4m....? I know which option I would try to aim for...
Yes I know that, the only way CGP can realise value from ENSA stake is by being taken over. If another company takes it over then they are not subject to the agreement.
Solgold only gets first refusal if CGP tries to sell the ENSA stake as an "asset for sale" -> Sorry I don't know what point you're trying to make? That Solgold would want BHP to have control? Surely BHP would want Solgold to consolidate the 15% ENSA interest into Solgold by buying out the NSR for a mere $4m after feasibility?
JS I reckon it enables a third party to enter as well as increases the chance for Solgold to take out Cornerstone via the NSR. Feasibility should be within the 2 year period. If BHP were being hostile they could've taken out CGP and Guyana's stake and then demanded a seat on the board with 16% as they'd be the largest single shareholder of Solgold.
Just in case anyone want a read of the BHP SSA - link to Solgold profile on Sedar is below. The document is the MAterial report published on October 25th.
https://www.sedar.com/DisplayCompanyDocuments.do?lang=EN&issuerNo=00043090
The SSA is a good ready as it pretty much outlines NM's strategy -> give us cash (and time) to do the next phase of drilling at Alpala to get PEA, MRE2 & 3 out, Pre-feasibility to prove up value. Don't touch CGP as we want to take them out as per the agreement via the NSR (plus there is no love lost given the underhand nature that Solgold shareholders jumped ship to CGP). Give us time to get drills into the 3 priority projects (especially Blanca) to enable value to be attributed to them, at present H&P attribute a mere $75m to all other tenements other than Cascabel!!!!! I wonder what value they would attribute to a bonanza grade epithermal gold project a mere 8km from Cascabel....
Just my own thoughts, GLA and DYOR
Otherwise why wouldn't BHP have taken out CGP straight off the bat, which would give it 15% ENSA straight away as well as a total of c16% of Solgold (with their Guyana Goldfields 6% and the c10% CGP holds). BHP wanted to cosy up to Solgold and get round the table rather than come in confrontationally.... just my own thoughts... GLA and DYOR
ludeck, BHP are prohibited from taking out CGP as outlined in their Share Subscription Agreement (SSA) with Solgold. Clause 7.3 states "During the Cornerstone standstill period the subscriber shall not, without prior consent of the company acquire an interest in any shares in Cornerstone." The standstill period is 24 months as per the standstill in Solgold above 13.5%.
I honestly think that NM wants to take this to feasibility to force CGP to repay their share of costs to date and then get them to contribute to development otherwise the CGP interest in ENSA drops to 0.5% Net Smelter return which Solgold can buy for a mere $3.5m.
The only ways CGP can raise that kind of cash is via a raising (diluting existing shareholders) or selling their Solgold stake.... NM has mentioned how happy he is with the agreement with CGP and then they are "pushing on" with it.
If CGP try to sell any of their stake in ENSA then Solgold have first refusal rights... GLA and DYOR
They are debt financed ohwhatanight, i.e. they have to repay their proportion of the costs spent up to feasibility (-$2.5m Solgold had to spend to take a stake in CGP) and contribute to development of they get diluted to a NSR which can be bought out for $3.5m :)
earthling, Solgold has been late on delivering a few key deliverables (only by weeks but nevertheless...) -> NM stated November for MRE2 and then it became December. Given we now have BHP, Blackrock, JPM etc on the books and a lot more attention, as well as the need to get the PEA delivered early 2019 (I've got January in my head for some reason) they had to cut off at some point to ensure they delivered on time to their self-imposed deadline.
This RNS is to manage expectations so people understand that the core included only goes up to end of October, and that the next phase of drilling has already started to move towards MRE3 (with some stonkingly good drill cores already ready to be included). However, to get a PEA out they have to have an established and compliant resource to base it on. If the PEA based on MRE2 is viable and exciting with good payback, IRR and NPV then imagine what MRE3 is going to give them as they move towards feasibility....
Just my two pence GLA and DYOR