Utilico Insights - Jacqueline Broers assesses why Vietnam could be the darling of Asia for investors. Watch the full video here.
Forte, I think you are reading too much into the Blackrock side of things. A dear friend of mine is a MD at BR and he told me that most fund allocations are managed by the algos, based on a combination of macro and micro risk drivers, usually it's just a dry and impersonal risk weighting driven decision.
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I have been researching for some link between Xib and Solg or Maxit, other than the address I have not yet found anything, anyone else can see some personal connections?
Apologies for the dumb question, but can someone more informed clarify what does the "% short" value represent? The 0.50% from XIB is 0.50% of what exactly, total issuance or something else?
About the price per lb in case of M&A, if only we obtained an average 0.08 / 0.09, we would be in the 70p thereabouts.
At at the 0.03 we paid for Cornerstone we would be worth 25p, general sentiment and some corporate progress allowing.
Why do I bother....
Sometimes I digress about general sentiment and macro picture, to highlight how much the current SOLG share price, like many other juniors and exploration companies, is depressed for reasons outside of the specific SOLG circumstances.
You can listen to Michael Oliver's analysis on this as well, but to give you an idea of how much sentiment and other externalities like the gold price can influence the price of this share, and others for that matter, let's try and price it.
Let's first take the gold price and the GDXJ price. At times of bullish sentiment (for gold) the ratio between the two reaches 0.035, while at times of bearish sentiment it can reach down to 0.014. The historic average is 0.023. We are currently at 0.0174.
Now if gold was to reach say 2550 (Mr Oliver docet, not me!) and the ratio reached 0.03, not even the maximum, it would imply a 120.4% surge in GDXJ. SOLG is correlated with that even if it does not produce yet. On that basis SOLG should reprice to 19.99p, that is with nothing new happening in the company, just because the sentiment changes, gold goes up, equity investors reallocate into mining from other asset classes and since it's a small asset class the inflow has a material multiplying effect.
Make of that what you want, I am not trying to open up a debate, but I thought I would share some positive thoughts on the back of the Michael Oliver interview that Eish kindly shared with us.
Some of you may already know this, but the USA value their gold holdings at a value of $42.22 per troy ounce, which is obviously well below market value. One speculation from various parties is that the USA are getting ready for a plan-B scenario where the dollar loses the de facto world reserve currency status, the dollar is replaced by SDRs and at that point the gold holdings are revalued, killing the value of the dollar and the federal debt.
If we consider that dollar domination is already waning and all big economies are accumulating gold, it is possible that eventually we will transition to a new monetary world order supported by gold.
It's not a conspiracy, these topics are debated by central bankers worldwide and there are studies about the mechanics of it. But obviously if it ever happens, it will happen by international agreement, not because there is some crazy event, and under the right circumstances the USA can support it as it would in fact resolve their public debt problem.
Thank you Eish.
The debate about gold and its potential rerating has indeed gone on and on for a long time, Willem Middelkoop is another advocate for the topic and to be honest it gets also officially debated at central banks' meetings.
With global debt ballooning, it's possible that even the Fed might eventually orchestrate a gold/dollar rerate to devalue the federal debt.
Now, the interesting part of the interview and a good reason to listen to it is the logic around where capital flows might go and how that could benefit the exploration companies. Even if he is half right we should see an uplift here.
Just to reiterate, Scott said I was reading too much into the "special" part of the AGM, as this was going to be a normal AGM and all the directors were going to be up for confirmation.
Thank you guys for the article, I remember it now, the infamous article with the chest thumping and the "fast and smart" statement that has not really helped our cause.
But I agree and it is my understanding from Scott's comments that the priority set on moving the project along with the permits and the exploitation agreement and recalibrating the technical and financial side of Cascabel into the phased approach must have come out of necessity since the fast and smart did not happen until this time. And the necessity must have been the result of the conversations with the potentially interested parties.
If I had to guess, going for a smaller project at the inset points to no big sale but rather a different financing profile linked to Solg going solo with a royalty, debt and equity package, of course unless someone finally shows up to take us out of our misery.
Add, have you got a link to that AFR article by any chance?
Forte, for one thing, neither Scott or SOLG have actually failed, you are over-dramatizing there. It's no doubt that with the benefit of hindsight SOLG's management, past and present, could have taken some decisions in a different way, including possibly selling at a lower price (still higher than today's) than the NAV or the multiples of current price that Nick loved to talk about.
But the company is running, priorities have been set to not waste money and delay the need to further funding, refocus and progress the project from a technical point of view, and re-engage the parties that are likely to be the good candidates for takeovers or JVs.
While I hate this myself, one has to understand that the time that matters is the one that companies need to fulfill their tasks, not the one that investors would like.
Forte, I also try to measure companies and management just based on bottom line and performance, and usually nothing beats the share price as a proxy of that.
However, and that might be just my opinion, SOLG would be priced at 2 to 2.5 times the current level just based on the macro outlook changing positively, and then whatever else on top based on the specific performance of the company.
So I would not blame him 100% for being at 10p.
And by the way, when we were talking about the share price and the shares he bought, upon me asking he seemed quite genuine for his comment that he thought the worst may be over for the price and while he could not guarantee a given share price for obvious reasons, SOLG was so fundamentally undervalued and its fair value would eventually be realized. Now, he pointed out again, which he does at these calls, that the catalysts are the revised phased plan, which should align the technical feasibility aspects of Alpala with the financial aspects and the marketability of the project, and the completion of the necessary permits and government agreements.
It might just be me, but having worked in corporations in C-level capacity with CEOs for many years, Scott just seems like a considerate and pragmatic man trying to bring all the relevant drivers of growth and shareholder value to the level where they need to be. Whether he succeeds or not is a different story, but I don't think he is making significant mistakes outside of the comms strategy (which I also covered with him, he said he was taking notes.....)
Dream, Scott did say something during my call about the close period but I did not take a note about it. I just remember that he talked about the shares he bought via his broker in Canada for his retirement account while he could, then he could not buy more because of the close period, but then he was planning to buy more after the AGM when the window was open again. I had other questions to ask him so I did not go in more detail about it.
Eloro, he was always on the case, what are you on about? Perhaps you should spend less time in your head or in this BB and engage the company directly yourself.
I asked him a few things, very available and personable as usual. I will just post the answers go my questions.
1) With the new government incoming, expects continuity of business when it comes to the permits and the agreements since we deal mostly with non-elected personnel, even though it's impossible to speculate if government priorities and time will result in quicker or slower delivery.
2) We are reading too much into the "special" part of the AGM, it's a regular AGM and all directors are up for re-election.
3) There is no risk that Cascabel is a technically undeliverable project, it can and will be caved. The recalibration of the PFS with the phased approach will mitigate all the risks (technical and financial) from such a big project and that's the envisioned way to achieve shareholder value.
4) Thinks that SOLG management has never really been too greedy when it came to a price tag, there is some hard data backing up the idea that a fair value could be the around the NAV that was advertised, but then of course it still depends on whether any interested party decides to take a bite of not. There have been multiple engagements, site visits and a couple of follow-up visits as well.
5) I shared Barrick's feedback with him, I think he played chilled but it must have annoyed him from the way he came back to that 2-3 times during the call.
6) Thinks that the price has dropped as far as it can, believes we have seen the worst and upcoming news should lift the price. He could buy his shares in the open market easily and plans to buy more after the AGM, has been wandering who has been selling but thinks it's not the big guys.
7) With the cadastre closed, thinks we have a valuable asset and there has been a lot of interest. We have the largest concession area but we are not the only ones. Is very selective, even at this point in time when we think that things are desperate, and expects some JV-type news in the not too distant future, let's see if that comes through.
8) The Comms strategy could definitely be better, expects to be able to come out in a clearer fashion about the strategy soon, putting the "review" to bed.
I think I captured the spirit of the call. Having put some pressure on him, my impression is that he is a believer and is trying to get SOLG to the finish line, the company has a great in-country reputation and progress is being made. There is definitely activities in the background that cannot be disclosed at this time, but he seemed closer than usual to being able to provide some positive news, let's see how the next weeks pan out.
GLA
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