Sun 27 Nov 2016
BHP INVESTMENT PROPOSAL 10 Oct 2016- Solg Announcement
[US$30 million for 10% interest in Solgold shares and US$275for 70% out of 85% in ENSA belonging to Solg + all the other details on
www.solgold.com.au]
BACKGROUND:
<>Share price of Solgold on Fri, 25 Nov 2016
23.5 British pence, High for the year 29.5p and 1.05p, Shares in Issue 1,428m+ [NMS 75,000]
Market capitalisation: £335.81 million
<>Recalibrated BHP Investment Proposal just as an example. If there is a takeover by BHP [Ref:"Solgold not ruling out takeover by BHP."- S & P Global, Market Intelligence, 9 Nov 2016- Enter title into search engine to read] and Nicholas Mather "considers" it, what would be possible potential price be if n o r m a l c u r r e n t situ is applied, say? Mather put a caveat if the price is "right."2
So to aggregate the figure to 85% instead of 70%, it will be 70%=US$275, so 85% will be 80%x $275m divide by 70%= US$399 million. Add back the US$30 million for the 10% share in Solgold into treasury as well, say =US$429million.
If one looks at the Orbis Gold takeover by Semafao of Canada [DGR sub], the increased offer was about 10% area. This was the same for the Shell offer to Arrow Energy. In both cases, no hostile bid situation by many parties. However, please correct if others disagree since that was what I read. I think in a recent Canadian case, it was also around the same. Usually, in the past the average can be say 30% to 90%.
So 10% premium to last offer of say US$429 million = US$471.9million [Worst case scenario say]
To convert to £, the exchange rate today is £1=US$1.25 so that works out to
<><>£377.6 million with say 10% premium on potential improved offer or
<><>£343 million [85% of ENSA ie US$399million + 10% share in Solg ie US$30m=US$429 divide by $1.25 for exchange rate to £]
So current market cap of Solg at £335.81 million appears to be underpinned by the BHP said offer.I am not taking in Solgold owns 11% odd in Cornerstone Resources etc as that is not the focus of the said offer.
THE MARKET
So the market attributed Solg at 23.5 British pence on Fri, 25 Nov 2016. So one may say a fair value based on the above. Market makers are nuanced in fair value?
DRILLING
Shareholders are told via an announcement "Cascabel Expl Update] or RNS on 24 Nov 2016 Link:
www.solgold.com.au that drilling is at Hole 18, 19 and 20R and that "Solgold is f o c u s s i n g on extending the Alpala before c o m p l e t i n g a Resource Statement. Next will be Hermatite Hill next quarter which is almost next to the Alpala [see chart].
POTENTIAL TAKEOVER
Via all the articles I have posted we are now aware from published sources what Newcrest CEO has recently said, what Mather has said and what was reported re: BHP.
This is the current situation.
So any investor will realise from putting all the articles together that unless the price is "right", Nicholas Mather has strategies in place with the current situation of having Newcrest on board + Guyana Goldfields.
Solgold on Twitter - link:
https://twitter.com/Sol_Goldplc tweeted on Nov 14, 2016 an article entitled:"Solgold going deep into Ecuador."- Mining Online. Solgold took the trouble to screen shot this restricted to subscribers article so that all can read the Solgold " V i s i o n".
This said article also says that over the next "12 months as it seeks to produce a Maiden Resource at Alpala Central & drill t e s t 4 other targets Moran , Aguinaga, Carmen & Parambas." Aguinaga is said to be the target with the more s u r f a c e expression [See
www.solgold.com.au >Investor Center> Presentations]. "By end of Oct 2018 Solgold expects to complete 95,000m of drilling. To date, only 24,000m has been drilled on the property." [For treasury, please check this article and the said RNS]
RIGHT PRICE FOR SOLGOLD- Mather*s words?
So if the potential revised figure is n o t the right price, shareholders have been already told Solg*s said vision.
It will be up to Nicholas Mather and his advisors [M & A experts] how he will get to the "right" price or not.
So all shareholders who are investors will follow Mr Mather*s and the board pathway if they so choose.
This post is rather long. However, I read last night on HotCopper the top posts with 90 tickup and these are more considered posts with development synopsis rather than a more superficial outlook.
All the figures that have been discussed are still intact eg how much was paid for 41>51% stake in Oyu Tolgoi but it will be up to Nicholas Mather & M & A advisors to advance Cascabel to those sort of levels.
The overall copper outlook in the longer term may also help but too long to go into here.
Thank you.
Sol1 Hot Copper poster, Sun 27 Nov 2016
P.S If the above is not agreed, then please feel free to provide a short essay as to figures. After all, we can only work from current knowns. I am sure everyone is nuanced that as Newcrest said, this is an early stage project. In time, of course, the more nuanced value may out or not.
de
(20min delay)
