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The reality is that people who is anticipating that a major 'must' do something by next week will be disappointed. BHP or any other major does not have to pull the trigger on the day the stand still agreement ends.
However, for next week, I hope to be pleasantly surprised by further advancement of commodity prices, offtake agreements, drill results, decline of CGP shares and finally some positive news of CGP's takeover bid (acceptance or bid revision).
If I were Citi, this is the move I would advise Nick to make. This is to generate a positive market response whilst avoiding potential low ball bids. If a major makes a bid beforehand, I'll be disappointed as it would be a missed opportunity to protect and maximise shareholder value.
Northern Star/Saracen $16bn mega merger makes it the 2nd largest Aust gold miner.
Does Newcrest need to a bit of an enhancement of its own? Or will it be like gold and be soft in the merger department?
Bed time reading (For me):
stockhead.com.au/resources/gold-digger-looks-like-ma-is-back-on-the-menu-boys/
I think Trump being high on drugs and coughing during interviews is causing gold (and Solgold) prices to go up.
Still waiting for him to announce the next US stimulus to give Gold prices a bit of a injection booster ...
And for China to swallow more copper to remedy its economy.
Timing on our side peeps
Crystal ball says the sequence of RNS announcement will be:
- Offtake agreements finalised
- Additional drilling results
- CGP accepts offer
- PFS completed
- Major makes offer - By mid-2021 (Considering COVID restrictions for due diligence)
FYI I saw a photo of him doing a site visit at Solgold couple years back (when they were friendly). They've also hire more hispanic personnel (corporate) and even at one stage had a social group providing spanish lessons (didn't go very far). Partnered with Cornerstone on a project etc.
So yes, he's keen in Ecuador
Although current gold prices have dipped, my crystal ball is tipping that the prices will rise by years end, and that Solg will have their ducks in a row. This will align nicely with Citi's defense/shareholder value add strategies.
Note: As a simple investor, my gut feel is all I have. So most definitely do your own research!
Although the market expected delays, to formally update the market all part of good governance. Especially when they've discussed it in a webinar... Eg I'm in the wrong time zone to watch the webinars and would have missed it if weren't discussed in this forum
Was this strategically timed? With the delay of the PFS and hopefully some positive drilling results to be released soon, wouldn't this pressure for CGP to sell? This would tie things up nicely before a major makes a move. Either way, this RNS doesn't negatively impact Solg/Citi's overall strategy.
Hi Zoro,
These are just my wild theories.
CGP will have to consolidated by Solgold or a major regardless. If Nick makes the move to increase his bid, it in effect increase the valuation of Solgold as well.
The offtake agreements will be non-binding. So if the major acts quick enough, they can cancel this.
All this does I think, is to create time constraints for the majors to make a move to make the deal workable for them and hopefully a good deal for Solgolders. And if they don't want it, then Nick will continue as planned, to production.
Also can somebody explain Solgold's option with Franco "to buy-back 50% of the NSR for a period of time"? Does this mean Solgold (or the new owner) can minimise royalties by backing out of the deal early but for a fee?
If I was Nick, I would not wait for BHP to do something on the 15th Oct. Any one else care to punt on Nick's next steps? I would have to place a bet that Nick will announce the results on the finalisation of offtake agreements and an increase of Cornerstone bid. I will also place a side bet that he will announce a potential a Farm in agreement on any one of Solgold sites.
Just setting some expectations... I hope people don't expect fireworks on that magical date. BHP will have their own timing strategy. I'm just saying this so people don't over react and get disappointed if nothing happens within this year... But I do hope Nick will have some strategies of his own to invoke a reaction from the majors or financiers.
@TBTT, cash is king. And this is great leverage to increase share holder value. The other alternative is to burn cash and the majors pick up shares on the low. FNV is experienced at picking companies (to increase their royalties), so we should find comfort there likihood of SOLG succeeding. Also with COVID and its impact to the economy, I think the gold copper price will increase over the next few years, so the payback period will be quicker.
@ColonelDrake, FNV can provide upto $1billion. So we need to find another $1.6b while firming up feasibility. I hope Nick will have started cracking to take advantage of high gold price. This will also be great leverage for us and I think the majors will have to under time constraints to put in a bid sooner rather than later (so they can potentially minimise additional royalties and buyback royalty options) . Great chess move.
I just googled the fella. His other company, PCF has strong links with Zhaojin (via Golden Gate JV), one of China's largest gold producers. The purpose of the JV is to find investment opportunities for Chinese companies to invest in Australian mining.... Strong chance the Chinese are kicking some tires? No doubt Nick will be tapping on his networks.