Member Info for Strider4

Schlem - nobody has their eyes closed to the risk - it's been at the forefront of discussion on here, and NM has been quite open about it.

With your take, you may as well write off the whole of South America, Africa, the Middle East, Eastern Europe, Russia and a good part of Asia while you're at it! What does that leave? North America, western Europe and Australia pretty much. Rather limiting your options...

Empire building absolutely does not always end in disaster. That's just not true - ALL empires started small.

Schlem - debt when well used is the BEST way to achieve rapid expansion. It has been demonstrated spectacularly countless times previously.

Debt terms will be influenced by sovereign risk, but I would argue that primary drivers will be the economic ones (IRR, NPV, payback etc); some of the more conservative lenders will have Ecuador, and many other countries besides, on the black list - big deal, there will be plenty of others that won't. Ecuador has been demostrating positive intent over the past few years with regulatory changes to back it up. The underlying sovereign risk, due to Ecuador being a South American country, is clearly never going to change.

Addicknt, I don't think anyone is saying that raising $3 billion CAPEX is going to be a "walk in the park". However, on the flip side, it won't be as hard, if we get to that stage, as some people are portraying. The investment case will be compelling. Sovereign risk will always be there, as it is in most South American, African and many Asian countries (so probably more than half the world's land mass!). Once at BFS stage we will have the permits (if all goes smoothly), and Alpala is mooted to have a 3 year payback - so the lenders only need political stability for 3 years and they've got their capital back, nevermind the enusing gravy train.

I don't think it's going to last. The promises from the Chinese side to buy more American goods are yet to be hammered out. And quite what they are going to put in place to stop cyber theft of American intellectual property remains to be seen.

I don't agree with many of the things that Trump says and does, but I think he's got a valid point with respect to China. It's well known that they thieve intellectual property wherever they can. And there is a massive trade defecit with America (i.e. America imports a lot more from China than vice versa). That is why the trade war hurt China a lot, but hasn't really impacted the US much.

FR, firstly the delay of the PEA has been noted by 3 or 4 posters in the last few days, so you've not been following the comments closely. And there has been discussion around it.

I agree that NM seemed a little lacklustre when it came to further drilling at Alpala. And yes it is important to keep those drill rigs busy. But after that I think your interpretation has gone a bit haywire.

There is plenty of additional value at Alpala (NW, Trivinio, SE, centre) - increasing the core, converting to indicated, increasing the overall resource. The point is that NM appears to think none of it is likely to be spectacular, useful yes, spectacular no. That is by contrast with their evident excitement about the other 5 prospects which will be brand spanking new discoveries, with all that that entails. They could even be bigger than Alpala.

Personally, listening to Steve Garwin, I think there's a decent chance of a second core to the NW, and we may be pleasantly surprised yet. Either way the drill bits at Alpala will be solidly adding millions to the value of SOLG.

JS, I'm almost certain that £1/share does not qualify as a "fabulous" price in NM's eyes. Now, I also don't think that £2 is quite what he has in mind either, as he would wnat to hold on for a couple of years to realise much higher. However, that said, £2/share would require some serious thought from the BOD and might well get through.

£4/share is actually reasonably realistic for Cascabel at the end of BFS stage. Ref previous takeovers. Obviously, not going to realize that at PEA stage.

Yes, we've been commenting on it for the last few days.

Schlem - I know that you prefer the takeover route because of your investment timeframe. But, I don't think it will happen in the very short-term unless the majors can come up with a "fabulous" price.

Meanwhile, SOLG are increasing that "fabulous" price by the day with the drill bit and advancing studies. Actually, IF we get to BFS two years down the line, without having been taken over, then I think the fair price for SOLG will be well in excess of £1.5-2/share.

As for the costs, well it's quite possible the CAPEX is going to come in at substantially below $3 billion. That's cheap, cheap for a large porphyry - investors may well be lining up in an orderly queue for a chunk at project level.

As for operating costs - that's what the copper is for! The mine will be hugely profitable, with NM having said he expects a payback period of about 3 years (from memory). So, al in all I don't think the barriers are as great as you suggest.

Zeus, I think he's stepped up the PR to prevent a low ball hostile takeover. Note that BHP's first move was definitely aggressive, and was considered so by analysts too - they took Goldfield's stake without even consulting SOLG.

Then what do we see? NM comes out not long after and says he expects MRE2 to be double MRE1. And he starts talking up the project big-time with the whole team coming out to do presentations (NM, JW, SG, AL). Then MRE2 is released quite a bit earlier than expected. All this looks to me as a defensive move, to notch value up and to attempt to get the share price to reflect it a bit more.

Now, it's interesting to note that NM has now eased off on the gas - moved PEA to end Q1 (we'll see.. as it may yet come early). Does he feel like the pressure has come off a bit? Perhaps. Or, hopefully, the extra time will be used to incorporate additional drill results into it to make it truly spectacular.

Ok, so minus $3 billion CAPEX and Barrick paid $10 billion for a resource that is 3x smaller than Alpala in it's current incarnation (due to increase perhaps by 20%).

The last two seem most comparable to Alpala. Alpala is already better than Las Bambas (so better than $5.85 billion). And it is close to 3x as large as Lumwana, but Lumwana was operational. So knock off $3 billion CAPEX and they paid $4.65 billion for something 3x smaller than Alpala! But KB007, you're saying they also took on $13 billion of debt for Lumwana as well...

Have I got this right?! By those numbers we're looking at knocking on $7-8 billion for Alpala alone once we get to BFS stage.

From a brief scan this is what I came up with. Feel free to fill in the blanks/correct.

Los Bronces - 8 billion tons at roughly 0.6% Cu (source dated 2015). Mine not yet built?
51% AAL, Mitsubishi paid $5.4 billion for 24.5% stake?

Olympic Dam - 4 billion tons at 1.1% Cu., 0.4kg/T Uranium, 0.4g/T Au. Mine not yet built?
BHP takeover of WMC for $7.3 billion (Source dated 2006).

Las Bambas - 1.7 billion at 0.6% Cu, cuttoff 0.2% Cu. Mine not yet built?
MMB takeover? of Xtrata for $5.85 billion (Source dated 2014).

Lumwana - 1.1 billion tons at 0.5% Cu. Operating mine.
Barrick takeover of EQN for $7.65 billion (Source dated 2014).

Ok - interesting reading. I will pick out the exact numbers and post later if I get round to it.

FR, now you're talking!

It all comes down to this: unless the majors offer a "fabulous" price for SOLG (and let's not rule that out by any means), NM will do everything in his power to keep it independent and keep adding value. NM doesn't want to be ripped off basically.

I expect price appreciation next year with the PEA, RE updates, PFS etc. But there are two wildcards that have the potential to make this go wild:

1) Takeover
and my preference actually:
2) One or more of the cores from the 5 priority targets come back with some fantastic results. Then let's keep doing that and the "fabulous" price for takeover will get ever more fabulous.

Newcrest's standstill finishes at the end of August 2019...

MM sold BMN at about 8p, when he went quiet. Yes, GLR was quite a rollercoaster wasn't it. I made a pretty penny out of it by jumping late, but not too late. Missed the top unfortunately.

Still, it was good to me so I'll always think of it fondly!

I'm hoping one of the 11 is gong to turn out to be an absolute whopper - the next Escondida. There's a chance, and it's a half decent one given the length of surface outcrop and the grades at surface.

Just imagine that for a bit of weekend dreaming. Nevermind Alpala, let's think GIANT!

KB007 - interesting stuff. CAn you put a bit more flesh on those numbers? What were the resource sizes and grades? All copper or a variety of commodities?

Ah good old minorminer...those were the days. He had three long term holds. He sold the best one too early (BMN) and held on to GLR and JLP.

So you were in GLR then. I guess you might remember me from there too then? Did you get out unscathed?

They do say that turd floats to the top. And what do turds like to promote? They like to promote other turds, just like them.