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It is good to see the price slowly starting to creep up towards NAV. Now that we are almost fully invested I am pleased to see the managers are becoming more active in presenting the investment case. It seems like a lot of investment trusts are doing cash raises at the moment, so I wouldn't be surprised to see the same from DORE in the coming months. The first dividend is also due in September so hopefully that should get some interest whilst at a discount.
Hi magoo, I am glad I checked this board today as for some reason I had not received the RNS despite it being in my subscriptions. It is a good update and very positive. Despite being less than a year since the IPO this has not stopped a number of other ITs trading at a premium, so I am surprised that this is still a rare outlier. It may be that the dividend is still low and in the renewable / infrastructure space everyone seems to want 5%+ yield.
Fishy, I am going through the same thought process. This has been a dud pretty much since launch. In part I think this is due to a complete lack of information. There is no dedicated website unlike most investment trusts, very little news or coverage and nothing out there giving people a reason to even look at this let alone buy. It is why I am surpised they even thought they'd be able to raise more capital - why would anyone want in when the trust has delivered nothing?
I am starting to wonder myself devonplay. This is one of only two funds in the renewables sector that is trading at a discount. I think that tells us something. The dividend is low compared to the peer group and we are still priced lower than the IPO. Unfortunately this looks like a poor buy - personally I think I'll monitor over the next few months then decide if it is time to sell.
It is worth signing up on the website for news. Three recent articles linked below:
It was also covered in the FT but you have to be a subscriber to read it (I am not):
The company previously discussed spinning off LCCM on the ASX, what are the thoughts on doing this for Redmoor (UK listing)? The company does not have the funds to do much with it unless they raise capital so this might be an attractive option unless someone is keen to JV. In the interview today they very much highlighted Cornwall Resources rather than SML, which made we wonder. With Cornish Metals floating and valued at 30m it could be a good move.
This guy has always been vocal on SOLG as his firm are holders. He posted the tweet below and I asked him if he thought this meant SOLG giving up on their plans of becoming a producer. I assume the response to himself is supposed to be in reply to my question, but his answer was "nope".
Our only hope is that Elon Musk tweets about how people need to focus their investment on strategic minerals as this is needed for the future. Maybe then we can get some of the Signal effect - loads of idiots piling in because they didn't understand that he meant the resources not our company. We can then all quickly exit and never think about this mob again.
Fira, if I was looking at SML now as a new investment I would see a company that has been a disaster for a few years. You are really looking at this as a recovery play, but that typically happens when you get a new CEO who cleans house, restructures and brings new impetuous to the company.
The price seems to have found a natural floor so there is some potential for profit. My concern is that LCCM won't really provide us with an awful lot of cash when we take our cut (and pay any tax). This money will be needed to buy another resource or to pay towards something on Redmoor. On the subject of Redmoor, is anyone going to seriously offer a good deal when we have a market cap of £8m? We can't afford to pay towards bringing it to production so either we sign a JV that gives us a tiny slice (with our costs covered) or we sell it for a million or two profit (and then have nothing other than Cobre and LCCM).
If you look around there are so many good opportunities in the UK market right now, particularly amongst miners, pharma and O&G - prices of some are going crazy. There firms are making positive progress and their share prices are moving accordingly. So... in answer to your question I think I'd have a look again at SML in 6 months but I don't see it as a good investment today.
To be fair, if the RNS had said that they had received feedback and were urgently trying to address all questions/feedback and resubmit as soon as possible with a view to getting final approval by x month 2021 I would have been happier. From the last update I came away expecting (or more truthfully hoping) that Jan or Feb would finally see some positive news to pick up the share price. Would any of us still be here if we weren't holding on to losses that we would like to recoup some of? We know that the potential is there but the BoD currently seem incapable of delivering.
"Generally, the process takes around three to four months from lodgement of the draft PEPR to the granting of the approval"
So we are already at nearly 8 months, giving ourselves another 2.5 to update and then who knows how long for final approval. We are on track for a year+. Fair enough covid will have slowed things but someone may need to call Norris McWhirter for the slowest ever approval of a PEPR.
Ultimately the market has spoken and the price shows us that people are not impressed with the RNS. I am sure we all hoped the next RNS would be to tell us the PEPR had been approved and then steps to agree financing concluded. Instead we now have up to 2.5 months wait until a new submission followed by a few months (?) for approval or perhaps further questions. I've just scanned through the PEPR requirements on the SA website and if they need a few months to respond it would suggest the initial submission was poor or had significant gaps.
In a time when investor time horizons seem to be getting shorter and shorter my concern is what is the attractive investment case here to attract new investors? Basically we are probably talking end Q2 now before we get approval, more questions or a rejection. Then Q3 for financing? So if anything does start at LCCM it is likely to be deep in Q4 or 2022. As for Redmoor, who knows - there are plenty of attractive mines out there looking for deals so fingers crossed we get one. For us long suffering shareholders I don't think today offers much cheer other than knowing Cobre continues to pay the wages of the board..
I'm waiting to see if one of the BoD make an appearance on Proactive today. I sometimes find the interviews provide a little more clarity if you ignore statements like a tsunami of cash and focus on detail. Given that JP is in Australia I'm assuming nothing today though as I would have expected to see it posted early / mid morning.
As has been the case with SML for some time now, we have another RNS that on the surface looks positive but in reality kicks the can down the road again. I think the expectation for an agreement on LCCM financing has been pushed back more times that I can count. Whilst it is good to see expected costs reduced, we obviously don't have anyone biting off our hand to get in on good terms. The simple fact is that if this RNS was viewed as good news the price would be up - instead we are down 11%
The mention of an IPO in this RNS makes me think this is the route they are considering most strongly. The fact that this has dragged on so long makes me think financing discussions so far have not been on favourable terms to SML. We are tiny and need cash so offers will have reflected this with control going to the other player. There are a few ways that they could do an IPO that could work.
TILS have recently done something similar with Accustem, spinning out the latter as an IPO (all shareholders getting one share in the new company for every share they held in TILS) - the assumption being that the plan is to monetise and sell. Perhaps this is the plan for LCCM? As a standalone it's value will be more apparent and easier to sell, hence bringing in a decent amount of cash for SML to progress Redmoor and maybe add some new projects. Alternatively they run as a separate company but this means a BoD with salaries, etc etc...
Another option could be more of a subsidiary whereby SML hold say 50-80% of the shares and sell the other 20-50% as part of the IPO to raise the cash required. This may be preferable economically to a JV or dilution of SML. It also opens more of a possibility of a buy out.
Thanks JungleJane, that is more in line what I was asking. Whilst understandably most people are obsessed with what price we may get, there are three aspects to this, (1) we want the highest price possible, (2) any major wants the lowest price possible, (3) Ecuador wants the best result possible for them to realise and unlock the resources they have whilst keeping the people happy and creating jobs.
Quady, this was not a question about Apala as I fully understand the timescales involved. This is about the entire portfolio owned by Solgold and to what extent the government may sway how this ends up. As we know, Alpala is just the first one.