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arrangement with CGP is a very neat way of raising some working capital. Obviously, we don't know if there will be any further requirement for funds i.e the amount needed to get us to DFS, or whether this exercise is simply a precursor to a disposal.
Of course the really interesting bit will be to see the destination of the CGP shares. Who will buy them? They cannot be sold into the open market without completely tanking our sp, so I think it's fair to assume a placing with a single purchaser has been lined-up. But who and at what price? Let's hope it's not BHP/NCM.
I also wonder if we've halted our efforts to raise more funds. I would guess not, because even though the CGP deal looks pretty certain, there's many a slip between cup and lip and we can't run the risk of it not working.
Many of us have already said it, but it's worth repeating - Sangha et al would not have signed up to this unless it was aimed at delivering their ambitions...and we all know what those ambitions are.
Morning addicknt.
The problem I see is anyone could have brought CGP beforehand, but didn't. Why was that ?
Could it have been because no one wants Solgold in it's entirety.
What they want is Cascabel/Alpala.
When Cascabel/Alpala is 100% owned by Solgold then this is easier.
However the price still has to be right.
So I believe we still continue to DFS and funding will be acquired to start construction.
I don't think a sale is anywhere imminenent! All the happiness with CGP shareholders including Arren Wirwin is because a huge incoming expenditure billl has been averted....nothing more or nothing less! You can feel the relief from here. They can now dust themselves down and relax a bit more. I can hear the phew's from here.
GLA.
Agreed Copperpot that's a large part of it.
Q, I certainly agree that a part disposal is a real possibility, particularly as much of the rest of the portfolio is a mish-mash of unexplored concessions which, even to the largest of companies, looks like an unfocussed and undeliverable mess.
Copper, not sure I agree with that. In fact it could be said that under your scenario the CGP shareholders are simply jumping from the frying pan into the fire.
Think they leave Cascabel within the Solgold wrapper and offload the rest into a new entity? They already telegraphed this as part of the strategic review:
ยท a spin-out of assets, other than the Cascabel Project, to all shareholders of the Combined Group;
Someone could then buy Solg and get Cascabel and we are left holding the rest in the spun out entity. If we choose to keep holding that...
rcgl, that seems unnecessarily messy and costly when we already have the structure in place to sell Cascabel separately.
Presumably Q nobody rushed to buy out Cornerstone as they would have inherited a huge liability..the amalgamation seems to simplify things all round
Better tax treatment for someone to buy Solg than for Solg to dispose of ENSA?
Addicknt - agree with much of your post apart from the bit about one party taking all of CGPs stake.
I'm not saying that won't happen but there's nothing to suggest yet that it will. In fact, the longer it takes to announce actually suggests their 6.7% will be split amongst several investors.
If it were a single holder, we really should have heard the details and received a TR1 by now.
rcgl, yes, that may be the explanation. As you know, NM has always said the tax situation is tricky, but he never provided any detail as to why.
Bozi, agreed...I meant to say several parties. I wonder if the delay is due to the fact a potential buyer(s) wants to see all doubt removed from the transaction first?
If we don't sell, what are we? A job creation scheme for 800+ people with a little bit of drilling here, some exploring there, jam tomorrow for the next 10 years till the indigenous people tell us we can't mine there anyway?
I'm with the CGP boys on this one: sell and move on or face a slow lingering finance death spiral.
Sell Cascabel and move on to new targets. Pretty clear I thought?
I'm puzzled hubris about two things...
1 The shares that CGP hold are already in issue so surely it would be a straight sale not a placement (which would apply to new shares)
2 I thought it was clear from the merger RNS that the cash option was totally at SOLG's discretion?
Hope this helps...
RK, when I said placing I meant selling the existing shares to one or two pre-arranged buyers, not selling new shares in the market.