Member Info for TigerByTheTail

Hi Colonel!
Yes, I noticed the tell-tale October 14th deadline as well.
The offer is basically at par - it implies a price of 20.89p per Solgold share based on CGP's closing price yesterday, current exchange rate and the 11:1 ratio.
CGP board obviously not in agreement with the offer, and I think they'll issue a statement confirming that shortly. IMO, the offer will fail.
But it will serve to smoke out other bids for Cornerstone. Barrick? BHP? Newcrest? Personally, I'm convinced that whoever ends up buying Cornerstone will end up taking over SOLG.
This is all moving much faster than I expected, and the end game is approaching.

The Solgold offer for Cornerstone will fail, of course.
But the offer will serve to smoke out other bidders. Cornerstone's reply to this obviously unwanted bid should be fascinating.

Hi All!
The price I'm interested in is the ask, not the bid.
I've been adding in small tranches on the way down, because this company is most surely worth more than this.
At some point it will be time to fire the big gun. But when? How low will it go?

Hi Swazers!
I don't like seeing people lose money.
You should probably reconsider your short position here. Seriously. Especially if you are using leverage, this could get painful fast. IMO, you're in the wrong place, possibly at exactly the wrong time.
I'm not really a TA guy, but I can see serious flaws in your charting as well.

IMO, the details don't really matter.
An offer for Cornerstone made in Solgold shares is not the equivalent of a cash offer from another party. Cash will always be preferable to fairly illiquid paper.
And Solgold certainly don't have the cash to rival a major's offer.
The only way Solgold get to buy Cornerstone's stake in Alpala + their SOLG shares is if no other bidders come forward.
I'm fairly sure that's not how this will play out.

Hi Quady!
I don't know the exact legal terms of the arrangement between Cornerstone and Solgold. That's probably inside information.
But my guess is that Solgold would need to match the terms of any potential offer - both for the 15% of Alpala and the Solgold shares. That would be typical.
Solgold just don't have the money to compete against a serious bid from a major. It's not even close. IMO, the first refusal condition is an empty formality.

Hi Broke Novice!
First refusal really means very little in this case.
Say a predator offers £100m for Cornerstone's stake in Alpala and its SOLG shares? (I.e. Roughly 1.5 times CGP's current mcap).
How on earth are SOLG going to match that? They just don't have the money.

Having floated the idea of a NC / BHP joint bid for SOLG today, it does occur to me that another scenario may be possible. That is:
Newcrest have withdrawn their director from SOLG as they have received an indicative bid for their shareholding (at a satisfactory price) from another major (possibly Barrick, but not certainly).
Whatever is going on behind the scenes, the first thing any potential buyer of SOLG will want to do is to take out Cornerstone's 15% share of Alpala and their shares in Solgold. Putting that together with NC's shares would give the potential buyer the right launch pad for a bid. So that's the next piece of news if I'm reading this right.
Obviously, any outside bidder would be looking to reach terms with BHP as well. Nobody wants to get into a bidding war if it can be avoided.
Personally, I don't see how Solgold can defend themselves against a takeover, given where we are now. I suppose the best hope is some absolutely stunning drill results from one of the new targets. But the "game" will get away from them very quickly now, and I don't think any results can come in time.

Hi Addicknt!
As regards the Barrick rumour, I've no idea if it's true or not. But Mark Bristow (CEO of Barrick) has said on many occasions that:
1. Barrick should only be interested in buying Tier One assets (like Alpala);
2. Barrick need to get into copper as well as gold;
3. Barrick need to follow the best deposits, and not be afraid of frontier jurisdictions.
Given that Mark Bristow invested a great deal of money in Congo, in his days at Randgold, I don't think Ecuador will scare him one bit!

I'd suspect that late-listed Friday deal is actually a sale from our big seller (Sustainable?), and part of the reason why HUM's share price is pinned at this (fundamentally low) level. Note how all the actual buys were at a higher price than it, even though the spread was very tight.
I agree it's maddeningly frustrating and like watching paint dry. But it is what it is!

Hi Colonel!
Good to see you're here as well.
"There's no way a world class asset like this (as well as the rest of the folio) will go to development without a bid offer by a major."
I agree 100% with this. Alpala is a Tier 1 world class copper-gold mine in the making. Of course a major will take it out - take-overs of prime assets like Alpala are a crucial element of their entire business model.
The only questions in my mind are "when" if happens and "how much" they are willing to pay.

My own reading of the situation here is that NCM withdrew their director in part because they were irritated by the recent fundraising, and in part so that they would not be legally compromised if they entered into talks with BHP and made other bid preparations.
My "most likely scenario" is that BHP and NCM make a joint bid in October - both sides will want to avoid a bidding war, and a 50/50 JV means less capital outlay and less country risk for both parties. At the same time it will be announced that they have bought out Cornerstone.
I think the Investor Chronicle "guesstimate" of a bid of 40p per share is about right. (Sorry, I know that may disappoint many long term investors here). This might need to be improved a little to ensure the bid succeeds, but not by all that much.
Solgold's best chance of a successful defence will be if they can announce either some stunning new drill results or the PFS before October 15th. I'm not sure they will meet that deadline, though.
As a new investor here, a takeover at 40p or so suits me fine - it's a 100% profit over a 3 month timeline! But I do understand that others might feel differently.

Hi Fifo!
I'm a fan of CMCL (Caledonian), a former investor there (I sold recently), and I've met some of their BOD.
In principle, CMCL is a far less appealing prospect than Hummingbird - Zimbabwe risk, lower production (54K ounces now rising to 80K in the future - of which they only own 64%).
BUT, CMCL's BOD have taken great care to make their stock appealing to investors - good PR, excellent reporting, regular small 3 monthly dividend, reverse share split to make sure price over $5 (i.e. not a penny stick to American eyes), and a listing on the NYSE, where gold stocks are better valued. The result? A worse prospect (in the abstract) is valued much more highly by the market.
I agree with you - Hummingbird could learn a lot from CMCL's example.

The US listing isn't really a proper listing (OTC:HUMRF). It's an Over-The-Counter (OTC) stock - i.e. with tiny volume and a huge spread, with a market made by a single unofficial broker. In short, it's a lobster pot - easy to get into, hard to get out of. Frankly, only an idiot would buy any stock under such circumstances.
(Note: the chief deramper of HUM on ADVFN is exactly such an idiot!)
I believe (not quite sure) that much the same is true of the German listing.
If HUM is ever going to list on a second stock exchange, it needs to be done properly - with a marketing budget and with serious brokerage to create proper trading volume. HUM would probably need to report in greater detail each quarter, as well, but that could be managed.

Way too high a risk of bankruptcy here.
Also, underwriters will want to offload all those newly issued shares that they had to buy at 40p asap. That means there is no upside for the foreseeable future, even if a V shaped economic recovery arrives.
I can't say it isn't deserved, considering the disgraceful conspiracy against Flybe. Hoping Virgin Atlantic goes down as well.

Hi BearsAndBulls!
Have a look at the board at around 10.24 am - including a delayed sale of 100,000 reported later.
That's more than 300K shares dumped into the market in rapid round number sells, suppressing any upward momentum in the share price and killing any investor enthusiasm.
The simple explanation is that Sustainable Capital are still reducing their position, and that they are willing to use any liquidity that appears to do it, even if that means they are selling on the cheap.
I can also make a more complex case for the share price being held down by a potential hostile takeover bidder, but perhaps that is just me being paranoid.
Certainly, the share price here makes no sense at all based on fundamentals. And it hasn't for quite some time now. Make of that what you will!

Thanks for the explanation, SGD27.
Those drill holes really are excellent grades.
It just goes to show how hard life has been for explorers that Cassidy couldn't progress the project themselves. As the old adage goes, it's hard to find gold, but finding money to go look for it is even harder.

Does anybody know the correct conversion rate for conversion of gram meters to the usual grams per tonne?
Is it as simple as 1m3 of standard rock usual weights around 3 tonnes, and therefore we should be dividing the gram meter grades by about 3 to get g/t?
All help genuinely appreciated.
Meanwhile, I note that the news was immediately sold into this morning. Am I being paranoid, or is this share price being deliberately held down?

I've got to agree that at this market cap it's crazy for Hummingbird not to buy back their own shares.
Where else can they get this kind of implicit return on their free cash flow? And with absolutely no execution risk?

Hi SlickHarry!
I'm not so sure. The financing that Cora have announced is only limited. I haven't looked at this closely, but I assume that it's only enough for a heap-leach plant, rather than a CIL arrangement. A gravity concentration process plus a residual heap-leach plant might make better business sense than just a stand-alone heap leach arrangement. It all depends on the gold yield.
Maybe some Cora shareholders who know more than I can comment?