Member Info for zoros

Phew!
Z

Regional Portfolio
Portfolio rationalised to focus on best targets and reduce costs
SolGold has recently trimmed its concessions to 62 (from 72) for ~37k Ha within
the company’s four 100% owned subsidiaries having deemed them of lower
geological prospectivity. The relinquishment allows SolGold to both reduce
exploration commitments of ~US$75.6m and streamline the exploration pipeline
having demonstrated mineralisation through the drillbit at Porvenir and Rio
Amarillo (Partial assays from Hole 1 to 1,052m at Varela: 72m @ 2.16 g/t Au, incl.
24m @ 5.77 g/t Au with visible gold identified at 1,216m). The Company has also
reported it is seeking strategic partners to advance certain projects with
discussions underway with several interested parties.
Drilling at Cascabel, Porvenir, Sharug and Rio Amarillo in 2021
SolGold continues to pursue its strategy as an integrated explorer and developer
and the Company maintains its plan of applying its exploration blueprint of
systematic evaluation of its assets across Ecuador. In 2021 SolGold carried out
exploration drilling at Cascabel, Porvenir, Sharug and Rio Amarillo projects, and
is soon to commence at the Cisne Loja project. Field exploration activities
continue to focus on Helipuerto, Cisne-Victoria and Chical

Value potentially masked by the world-class Alpala
Whilst we believe SolGold is well positioned to continue extracting value from the
regional portfolio, the corporate history of NGEx Minerals could highlight an
attractive value proposition for Porvenir in time as it fledges its wings. NGEx
spun-out Filo del Sol project into Filo Mining Corp in 2016 and began engineering
studies culminating in the Jan 2019 US$1.3bn NPV PFS. Remarkably, the market
capitalisation of the spin-out quickly mirrored that of NGEx, effectively doubling
the value of the two companies for shareholders.
NGEx Resources then changed its name to Josemaria Resources in August 2019
and spun out the Los Helados project into NGEx Minerals, also picking up several
exploration packages. Again, the sum of the parts was quickly greater than the
previous whole. In October 2020 Josemaria announced a positive FS and
submitted an ESIA in Feb 2021 alongside a camp expansion before proposed
acquisition by Lundin Mining in Dec 2021. Filo Mining has also arguably
benefitted from its separation from its sister companies and sole focus on Filo del
Sol, with recent exploration results highlighting extraordinary potential to
significantly boost the 2019 PFS valuation

cont'd...

Porvenir - Cacharposa
The Cacharposa porphyry copper-gold target in southern Ecuador is part of a
1,700m long northerly-trending mineralised corridor, up to 1,000m wide project.
The neighbourhood also hosts the 9.48Moz Fruta Del Norte deposit (Lundin
Gold) 100km to the south and contains copper-gold mineralisation indicative of a
well-preserved, vertically extensive porphyry system.
Maiden MRE demonstrates bulk tonnage porphyry mineralisation
Recent results and a maiden MRE have highlighted economic potential with
396.8Mt @ 0.44% CuEq for 1.40 Mt Cu and 1.80 Moz Au in the Indicated
category, plus 96.9 Mt @ 0.37% CuEq for 0.28 Mt Cu, and 0.38 Moz Au in the
Inferred category. Mineralisation exposed at surface over a 650m long strike
length has materialised into a potential 44.0Mt @ 0.64% CuEq starter pit,
providing an economic jumpstart to any bulk-scale open pit development.

cont'd...

...and substantially derisk Alpala’s block cave development
Whilst TAM has potential to add cream to Alpala’s NPV, we believe the benefits go
beyond our hypothetical mine plan. In our modelled scenario, with TAM giving
way to Alpala’s higher grade feed from FY29 and reduced to nil in FY31, there
remains potential to extract a further 141Mt @ 0.29% CuEq based on Indicated
material within the maiden MRE. This could support a further five years of mine
plan based upon a 30Mtpa plant, providing flexibility and cash flow ‘insurance’ as
the block cave develops. TAM’s underground mineralisation also appears
promising and we believe is likely to grow substantially from the current resource
(Indicated: 32.0Mt @ 0.35% CuEq and Inferred: 135.2Mt @ 0.37% CuEq).

cont'd.....

TAM open-pit mineral inventory could boost NPV...
Whilst at this stage it is unclear whether TAM will be included in the Cascabel
PFS, we believe the deposit shows clear potential for eventual incorporation into
the mine plan at this early stage. SolGold has also stated planned work including
assessment of potential near-surface mining options at the Cascabel project. The
premise appears compelling with production able to be brought forward and
reduced risk, in our view, as TAM offers cashflow whilst SolGold initiates the cave
at Alpala. We therefore model a conceptual scenario below to highlight potential
upsides. Capital costs associated with infrastructure and EPCM are brought
forward to FY25 (one year earlier than our Alpala only model) and an additional
~US$150m of growth capex is assumed including US$60m of pre-production
mining at TAM, in line with other near-surface porphyry projects in Latam.
We then leverage TAM’s higher-grade near-surface zone containing 10.6Mt @
0.41% CuEq and 5.2Mt @ 0.45% CuEq to kickstart production in FY27, ramping
up into a complimentary mine schedule with Alpala in FY29. Recoveries are
marginally lowered to 90% for Cu and 80% for Au + Ag as a result of the lower-
grade feed, and opex costs are assumed flat with lower open pit mining costs
offset by an uptick in transport costs to the Alpala hosted plant. The result is a
US$263m increase in our Jun’22E NPV to US$4,493m and a 2% increase in IRR
to an attractive 25%

cont'd.....

TAM maiden MRE offers a near surface porphyry 3km from Alpala
The Tandayama-America (“TAM”) porphyry copper-gold deposit sits within the
Cascabel project in northern Ecuador. TAM contains potentially open-pittable
mineral resources of 201Mt @ 0.33% CuEq in the Indicated category, including a
higher-grade near-surface zone containing 10.6Mt @ 0.41% CuEq and 5.2Mt @
0.45% CuEq. Significantly, the MRE is only based on assays from the first 18
holes, with Holes 19-30 either drilled or underway, offering scope for a significant
upgrade in due course, particularly to the east and southeast. Hole 13 has also
demonstrated potential for higher-grades, returning 1,010m @ 0.55% CuEq with
a high-grade core of 132m at 1.09% CuEq. Initial examination indicates the
project is amenable to both open-pit and bulk underground mining methods. As
such we are optimistic of a substantial upgrade to the resource prior to advancing
Alpala to full feasibility, where we expect TAM can be included within the study.

cont'd

Alpala trades at an attractive discount heading into PFS
As a result of delays to the PFS timeline, which is now expected to be published in
Q2’22, SolGold currently trades at a compelling EV/M&I Resource of US$0.02/lb
CuEq, amongst the lowest of its peers, on an Alpala-only basis and the lowest
when considering TAM and Porvenir maiden MRE’s in our estimates. We believe
this provides an opportunity for a significant rerating once the document is
released, with Darryl Cuzzubbo’s recent appointment as CEO allowing SolGold to
home in on delivery.

cont'd

Rio Amarillo could be next as regional drive continues
Ecuador’s sub-tropical climate has resulted in most of the riches being
concealed, but we believe the country has the potential to be just as prolific as
Northern Chile. As well as early success identifying the mineralised porphyry at
Cacharposa, SolGold has also discovered significant geochemical and
geophysical hallmarks of large porphyry systems at Rio Amarillo, Cisne Loja,
Sharug and Helipuerto. Drill testing and further geological work could translate
into another major porphyry discovery. Partial assays from a maiden hole at Rio
Amarillo’s Varela returned 72m @ 2.16 g/t Au, including 24m @ 5.77 g/t Au with
visible gold identified at 1,216m.
Valuation: Alpala start date rolled but TAM could bring forward again
We continue to base our valuation on a 30Mtpa block cave operation with an 8%
WACC, US$8,500/t copper price and US$1,850/oz gold price. We conservatively
roll our production start date to FY29 (initial capex occurs in FY25), resulting in
a ~7% like-for-like decrease in our risked SOTP to GBp98/sh. We are yet to
factor in the tangible value that optimisations such as TAM could provide to
Alpala in our base case; our initial estimates indicate a potential 6p/sh increase,
alongside compelling risk dynamics. Following a maiden MRE at Cacharposa, we
partition the project from our regional basket and apply a US$75m valuation
based upon peer comparables (see p6). Given SOLG’s successful incubation of
further exploration targets, we maintain a US$75m valuation for the rest of the
portfolio, resulting in a 2p boost to our SOTP. In addition, we have reduced the
fully diluted share count by ~78m following the expiry of out-of-the-money
options in Nov’21 and Dec’21, bringing our revised target price to GBp101/sh,
slightly below our previous GBp105/sh target, but still implying 304% upside.
(See p9 for a summary of our SOTP). The key upcoming catalyst for SOLG is
completion of the Alpala PFS, expected in Q2’22.

cont'd

Here goes, bear with me..................

SolGold’s (“SOLG”) regional drive has started to yield tangible results from
promising projects including Tandayama-America (“TAM”) and Cacharposa at
Porvenir. We evaluate the potential value these projects could add even at this
early stage in their development and key catalysts moving forward. TAM in our
view could substantially derisk development at Alpala through early starter pit
material whilst Alpala is caving, bringing forward first production and
simultaneously enhancing the project’s NPV.
TAM sits just 3km from Alpala and could bring forward production plus derisk
Through delaying the PFS, now expected in Q2’22, SOLG has the chance to
assess and potentially incorporate several upside scenarios including potential
incorporation of TAM. Whether TAM is included at this stage or not, we believe
this satellite project to Alpala appears compelling following a maiden potentially
open-pittable mineral resource of 201Mt @ 0.33% CuEq in the Indicated
category, including a higher-grade near-surface zone containing 10.6Mt @ 0.41%
CuEq and 5.2Mt @ 0.45% CuEq. Such material, which we believe can be
substantially bettered moving forward (MRE only based on assays from Holes 1
– 18 with at least 12 further holes drilled since), could allow production at
Cascabel to be brought forward by up to two years for H&P estimated US$150m
of additional capex, boosting our NPV by ~US$260m to ~US$4.5bn and 25%
IRR whilst also providing flexibility and derisking of the Alpala cave operation.
Porvenir maiden MRE implies an EV/M&I value of ~US$75m
The Porvenir concession is located 100km south of the 9.48Moz Fruta Del Norte
deposit, owned by Lundin Gold. Recent results and a maiden MRE on the
Cacharposa target within the Porvenir licence have highlighted the project’s
potential with 396.8Mt @ 0.44% CuEq for 1.40 Mt Cu and 1.80 Moz Au in the
Indicated category, plus 96.9Mt @ 0.37% CuEq for 0.28 Mt Cu, and 0.38 Moz
Au in the Inferred category. The project also offers a potential starter pit, with
surface mineralisation containing 44Mt @ 0.64% CuEq, providing an economic
jumpstart to any bulk-scale open pit development. Following the MRE we apply
an initial value of US$75m to Cacharposa, Porvenir, based on peer comparisons.

cont'd.....

Corradus: Miles out. If I am reading your figures correctly.
As per my yesterday post @ 1529 and in concert with the latest broker confirmation, this is what 'should' be realised:

Whatever the agreed value of the 5% is in GBP, divide by the shares available (4.sbn):
For example
£100 - 2.3p
£175 (my favourite) - 4.3p
£365 (SAS's, $500 favourite) - 8.6p

The eventual above figure(s) will be added to the then current SP when the results are disclosed. There may also be an additional uplift due to sentiment if the market love the transaction and understand that this is getting serious now!

BB and Cannacord are quoting $228 and $280 bn dollars US. I have worked out on my own that the 5% will be worth £175Mn which is within their range too.
Are you getting mixed up with the SP estimate.....post the MRE2?

Z

Q: If you had a major coming is it worth fragmenting the assets to be able to sell the fragments rather than the whole?
A: We would like to build a multi billion dollar asset and mining house. Always open to an early offer at a value that would normally take us years to unlock, then of course we would consider this but it would also need to be approved by shareholders too. I have created value in my career. Hav is a much better platform for launching this from.
Q: The crown jewels are Hav. If NCM came with a big enough offer, would you sell it all?
A: Good question. If someone offers us NOW the value that we would normally unlock over the next 5 yrs…we would have to take that seriously. But with a tinge of sadness…we have something special here. If we can take a short cut…we have to think about it.
Q: It’s a cash cow if you keep it.
A: From a GGP pov, the decline is started plus $480bn spent so far, it seems reasonable to assume NCM understands the quality of Hav. They want to keep Telfer running. GGP can reinvest their earnings for the broader portfolio. We are fortunate to be aligned with NCM.
Q: Anything you think could derail GGP over the next few years?
A: We would have liked the PFS to be a 100 times bigger! None of us are going to die of boredom, Phil! Nothing is linear in progress.
Q: Do you think the SP is undervalued?
A: We continue to create value. Phil: Thanks for not answering!

Z

Q: Recent broker story is 5% valuation option. Good way to value company?
SD answer: I have inherited the process so I will make best value of it. We would normally agree a value, alternatively we might go to a lengthy drawn out process. This a multi decade asset. It will take 3-5 yrs to continue drilling to assess this project.
Q: If you can’t reach agreement, you will use the VALMIN code?
A: Confirmed.
Q: If I use 20Moz x $1000/oz because of AISC, is that a close valuation for the 5% valuation?
A: It comes down to valuing at a relatively early stage of the development. 20Moz is not a JORC resource currently…too early. If it goes to VALMIN process there is a broad range of outcomes.
Q: Other opportunities other than Hav. Give us an overview of the rest?
A: Two parts: Tier 1 jurisdiction / multi decade asset/copper(20%) and gold / low risk area. Early days, low cost free cash flow generation. Secondly: Unlocking option value in portfolio. Elephant country. Up north….this is the post code for drilling. Scally / Juri…all of that is rich area. Finding even another quarter of a hav would be a tremendous outcome. Modern techniques allow us to peer thru the cover. Ernst Giles is under cover, under explored. Just agreeing access agreement, to be confirmed later this year. Panorama/Bromus…Au and Cu assets…drilling this year too.
We talk to other companies about where we can add value to their process. My team is developed now, strengthening the board in future. ‘A’ grade board is essential. Maximise potential of our portfolio.
Q: At some point in 2022, you are going to receive a lump sum. What you going to do with it?
A: Fully fund Hav. Pay off our $50m debt to NCM. Engaging with banks. A dozen want to engage with Hav. Bring in sum debt may be our pathway to fully funded. I intend to complete the debt process. Well funded too, to unlock other portfolio’s.
Q: Telfer has done 20Moz over time. How much is that worth compared to GGP value.
A: Telfer has been there for 35yrs. Taken them this long to process 20Moz. Puts it in context. We like to think Hav has that similar opportune ity. It will take 3 to 5 yrs of drilling to unlock that value. Goes down 1350m at an angle and under cover takes a long time to explore. The decline will accelerate the cycle time for drilling and assays. Unlocking hav will be speeded up over the next 3 yrs.

cont'd......

Before I blitz this bb with it, would posters like to see what is in the note? It covers all their operations in Ecuador.
More than 10 recommends tells me - yes.
Z

The reason for the great "underwhelming" LM, is because the markets already saw this weeks ago and have no interest in old news.
Z

and US$280 for Canaccord
Z

Stebo, look at it this way, it's far easier:
Whatever the agreed value is in GBP, divide by the shares available (4.sbn):
For example
£100 - 2.3p
£175 (my favourite) - 4.3p
£365 (SAS's, $500 favourite) - 8.6p

The eventual above figure(s) will be added to the then current SP when the results are disclosed. There may also be an additional uplift due to sentiment if the market love the transaction and understand that this is getting serious now!

The MRE2 will of course be a separate issue - well not true actually!
A good MRE2 will justify its own SP uplift without recourse to the 5% valuation.
Whereas the reverse is not the same: The 5% valuation is totally reliant on the MRE2+ if we are to get a good result and hence a good uplift in SP.
I hope there is a significant gap between the two (MRE2 first followed by the 5% valuation) so that we maximise the SP uplift(s).
I'm expecting the MRE2 on or around the 17th Feb and the 5% valuation shortly thereafter (if they agree) or weeks later (if it goes to arbitration).

As has been muted recently - the squeeze is on, the SP is running out of places to hide.
GLA
Z

Thanks Bozi...very kind.

I reserve judgement on DC's comments.
Actions speak louder than words.
Get the PFS done and get Solg sold off pronto.
Fecking thing will be competing with War and Peace next for longevity!
Z

Tx DBW.
Can anyone explain to me why Solg have issued an RNS which is a repeat of the MMRE last year?
Have I missed something?
Z

Jiffy - This has been explained previously, you must have missed it.
I'll run it through for you again.....
[In fact 2 brokers are calling $228 and $280 US for the 5%.]

Using this link as the basis for the calculations, IE: BB calling 24p fo the SP based on the paragraph at the end of this report....OK?
https://www.proactiveinvestors.co.uk/companies/news/967778/havieron-feasibility-study-the-key-for-greatland-gold-in-2022-says-broker-967778.html

This will make GGP worth 4.2Bn (shares) x 24p. This equals: 1.008Bn.
GGP (at that point in time) will own 30% of the mine, so the whole mine is worth: £3.024bn (GBP).
5% of the mine: £150mn.(GBP). ($228).

How's that?
Z