Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Thanks Bozi! Just wanted to be sure I understood correctly.
Can someone explain to me what this means: "SolGold has a buy-back option, exercisable at SolGold's election for four years from closing, for one-third of the NSR interest."? Does it mean we can only buy back 0.2% out of the 0.6% royalty? I.e. Osisko will have 0.4% no matter what?
Seanhunter, the small trades can also have to do how orders are being filled. I bought 50.000 shares yesterday on a limit order and it was automatically filled in six trades in the quantity of: 10 000, 20 000, 1353, 4 , 5776, 12 867. This was in the course of 1 hour.
My theory is that some people sell/buy on a certain amount of money that gives a 'weird' number of shares and then there could be small leftovers. These mismatches then can leave small numbers like my yesterday's 4 share trade.
So I am not paying too much attention to these small trades.
Colonel, besides Solgold Coffee would we get Solgold Sake as well? :-)
I guess when you are out of the company you also lose your options. And the latest MD&A (13th of May, 2022) says:
"At 31 March 2022 and at the date of this report the Company had outstanding options to purchase an aggregate of 32,250,000 ordinary shares with exercise prices ranging from £0.25 to £0.37 per share and expiry dates ranging from 26 April 2023 and 2 December 2024."
So if some of the people want to exercise these options they better get the share price up before they are out of the company. This could have some people to want corporate action before the AGM. But others without options and normal shareholders might not be in such a hurry.
You are right and I am not suggesting we continue with all of the license blocks, but basically having no exploration at the moment is not what I like to see. Many discussions and this board have already been held how we should move forward with the license blocks and hopefully we get some news regarding this in the near future.
Fortissimo, my wording has been poor. I admit. I do agree with addicknt and Ortherncopper that another royalty deal is not favourable at this moment. At least not to get some working capital. But I have limited knowledge of corporate finance compared to yourself and others on this board.
You make valid points about dividing the South and the North. I would like to see regional exploration to restart to hopefully get some additional excitement in this company.
But in the end my original question was about the required government royalty for Alpala. But somehow we started discussing other things. Which is perfectly fine of course.
Cash is needed at some point, but I also think we can't keep on giving away slices of the pie.
However, my question was if the government royalty will be 5% or 3% as used in the PFS. 2% makes quite difference the if it comes off the revenue.
I was pondering over the difference between an equity raise and a royalty deal as with Franco Nevada. In Alpala's PFS a 3% government royalty was assumed. And I was thinking that adding to the total of currently 4% royalty (3% government and 1% FN) would make Alpala less attractive for potential buyers of the project.
But then I was reading on Solgold's own website the government royalty might be between 5-8% !!! It states: "In addition to the taxes outlined above, the holder of the licence must pay to the State a royalty of no less than 5% of the value of all sales and no more than 8% for the sale of gold, silver and copper (large-scale mining)."
source: https://www.solgold.com.au/ecuador/
Does anyone have more clarity regarding this or is the assumption of 3% government royalty not valid anymore?
Addicknt, I see Boliden as looking for an off-take agreement. Not a full-blown takeover.
Would love to put a face to some other posters here.
I am actually a bit worried about people being forced to leave in key roles without any clear reason for us outsiders. Is it some power play games in a corporate restructuring or is there something more seriously wrong?
(btw, RK1 you might have given away your identity with your comments regarding and on LinkedIn.)
addicknt: your explanation makes sense, but I am trying not to get too excited yet. Anticipation is growing though.
Thanks coldcut! Great find and thanks for sharing. Looking forward to finding out what this EGM will be all about.
Zoros, I think RK1 means VWAP (Volume Weighted Average Price) and that he used Cobalt Share Price Definition (https://www.lawinsider.com/dictionary/cobalt-share-price).
Boliden produces from mines only a small percentage of what they smelt. So they are used to buying copper concentrate. Btw, fun fact is that Boliden once owned the Lomas Bayas copper mine in Chile.
Regarding the Boliden's copper business (https://www.boliden.com/news/copper) :
Boliden holds a strong position in Europe as a producer of copper concentrate. At the same time, Europe imports 80% of copper concentrates from other continents. On a global scale, Boliden is consequently a small player. In 2019, Boliden produced a total of 121 ktonnes copper in concentrates in the Aitik, Kevitsa, Kylylahti, Kristineberg, Renström and Maurliden mines. The Rönnskär and Harjavalta copper smelters also purchase mined concentrates and secondary raw materials from external suppliers. The smelters produced 322 ktonnes of copper, of which recycling accounted for 20% in 2018. Industrial customers, in particular manufacturers of wire rod, rods and copper alloys in Europe, purchase the majority of the metal.
I think there is interest, but there is no news to digest / discuss. Let's hope some assay results will come soon.
It is also good to look back at the share performance of GGP. It didn't explode when they reported the results from HAD001 on 25th of June 2018. Share price didn't do anything really when they mentioned a large system in the 1st of October 2018 RNS. It had a decent gain when the famous HAD005 hole was reported on the 19th of November 2018. However, share price was still below that of when HAD001 was reported. The farm-in agreement with Newcrest on 12th of March got the price moving a little bit. But only 9 months later in January 2020 the price started moving from 2p to all they way to 37p in December 2020.
Maybe some investors are watching ARV from the sideline to step in at a good moment, but probably there is time to enter if the first assays turn up good.
LunchMoney, always nice to see people's reasoning and/ or calculations on the valuation. It helps me to put perspective to my own thinking. Although I really would love to believe the people that are claiming £2+.
LunchMoney, wouldn't the NPV be taken down by the cost of purchasing SolGold/Alpala? If the NPV of the 85% of Solgold would be 3.5 billion and they purchase us for 1.5 billion that would make the NPV 2 billion. Of course they would get all the other projects as well for the 1.5 billion. But just for simplicity I only counted the Alpala project.
1.5 billion $ is 1.15 billion £. With 2.4 billion fully diluted shares this would give 48p per share.
Now the question is if the 2 billion NPV after purchase is too much / little and if a risk factor or premium should be applied to that. But to put it in perspective: if a buyer needs to invest 2.5 billion plus 1.5 billion for purchasing for a total of 4 billion a 2 billion NPV would mean a ROI of 50%. Quite acceptable in my opinion.
DBW, just a link to the mining journal article.
Solgold made two attempts to get the whole of ENSA/ Cornerstone. The last attempt was in June 2020 (see RNS 30.6.2020) and failed (see RNS 16.10.2020) . Since then things have changed and now both companies work together (see RNS 2.6.2021).
I am sure if a buyer comes for Solgold it wants the whole of Alpala so it will either also buy Cornerstone or it's share from ENSA. Time will tell.