RE: He ain't happy but then who is?23 Dec 2020 18:43
Now that Solgold’s AGM has confirmed that – as suspected – major shareholder BHP has joined with Newcrest and long-standing critic Cornerstone Resources to vote their combined 36.2% against the re-election to the Board of CEO Nick Mather, the question is why?
Mather, of course, even if ousted as a director could have stayed on as CEO, where his talents as a discoverer could remain at Solgold’s disposal. No doubt his critics would want to retain that expertise although, given that he founded Solgold, it would be no surprise if in such an event Mather left in a huff and hawked his own key shareholding around those who are bound to scramble to get it.
Newcrest’s displeasure can be traced to Mather having turned to Franco Nevada for its $100-150m streaming deal to finalise Alpala’s feasibility studies before it can be financed, instead of to its own streaming expertise. And everyone knows that Cornerstone is over a barrel with a commitment that it can’t afford, to pay its share of Alpala’s development once the next feasibility study is complete.
But no-one knows yet why BHP has apparently changed its previous supporting stance. The only reason I can come up with is that big strategic one – how is Solgold going to maintain its ever expanding and more expensive exploration programme, while waiting a long time for its discoveries to start producing cash? Alpala is already 3-4 years into its own discovery process, yet it will be a minimum 6-7 years yet before it delivers its first copper-gold concentrate to customers.
Mather obviously has his own talents. But no-one necessarily has every talent needed to get a mineral discovery into production, and Mather has not impressed some observers with his failed attempts to get Solgold’s share price up (he says to ward off any bid but which, in any case, I don’t think is likely at this stage).
But it is mainly Mather’s stated (and stubborn) aim to take Alpala into production alone – and the approved AGM resolution to sharply increase his freedom to dilute shareholders by raising the funds to do it too soon – that I think has prompted BHP to join the growing ranks of those who don’t want him to follow that route. Until there is some resolution to that, I can’t see the shares breaking out from their doldrums.
Z
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