SolGold - a buy for the long term from these levels?...

Another scalp for the Sheriff of AIM: James Berwick the Anglo African Oil & Gas CEO is toast but £50k is still missing. Read HERE

The share price of SolGold (SOLG) has taken a hit in recent months as a result of weak copper prices and political unrest in Ecuador, where its largest project is located, but if you are looking for an early stage mining company that has huge potential, then this could have presented a buying opportunity. Before I go into detail about its projects, I would point out that this is a share that those who like to have a pop at me take great delight in pointing out how I have previously covered it as one to avoid. What they often fail to mention is that was back in January 2016, when it was burning through cash and had very little in the bank, and so I saw it as one to avoid with the shares at around 2p at the time – I know several people with significant holdings who didn’t necessarily disagree with me at the time! Everything changed though later that year, when rather than having to raise money via a placing, Australian mining giant Newcrest acquired 10% of the shares in issue, and Maxit a further 4.43%, in return for return for total investment of $33 million (at a share price of 12p), to help develop its Cascabel project in Ecuador, which contains the Alpala deposit, one of the most significant porphyry copper-gold prospects in the world, and located in an area of the Andes that produces a large percentage of total global copper production...

Oops!...Cineworld has done it again. Read from Chris Bailey HERE

At the time that investment proposal was accepted, there was another offer on the table from the largest mining company in the world, BHP Billiton, but that was rejected. Subsequently, BHP came back to the table in 2018 and took an initial 6% stake in SolGold in return for $35 million (equating to a share price of 26.59p), then just a month or so later it doubled that stake to 11.2% with a further $45 million investment, and it looked like the two mining giants would go head-to head for control. A few weeks back it was announced that BHP had taken another 77 million shares at a price of 22.15p, plus 19.25 million options at 37p, and had become the largest shareholder with 14.7%, compared to the current Newcrest stake of 14.62%. What has impressed me is that so far SolGold has managed to retain its initial 85% stake of the project itself, with the two large mining companies taking stakes in the equity, and therefore having a significant interest in the share price performing well in the future. It also means that they may be willing to provide technical support to help that to happen, with BHP possibly getting involved in the completion of a feasibility study for Cascabel.

YU Group – new facility, but I don’t think we are being told the whole truth. Still a SELL says Nigel Somerville, the Deputy Sheriff of AIM, HERE

There have already been previous feasibility studies, with the most recent one showing post-tax NPV in the $4.1-4.5 billion range, and an internal rate of return of circa 25% for the project – although this is based on a copper price of $3.3/lb, gold at $1,300/oz and silver at $16/oz, so is dependent on future commodity prices at such time as the project reaches the production stage. Although copper is currently a fair bit lower than that – which is partly why the share price has drifted to the current level of just under 20p and a market cap of £385 million – I personally am bullish on the metal longer term, especially with a lack of new projects coming online. The biggest problem for SolGold is the size of the project – that is great from the point of view of its value in terms of the resources that are present, but does mean that it will be reliant on a BHP or Newcrest take it forwards to the production stage, as the initial mine construction is estimated to cost $2.8 billion, with a further $7.8 billion on mine infrastructure, and over the life of the project Opex of nearly $26 billion are expected. It is true that there are lots of mining exploration companies that have huge resources in the ground on paper, and which need crazy amounts of money to be spent to get to the production stage. But this one is a bit different as it has already had significant investment from two huge partners, and unlike so many of these other companies, the asset itself looks to be of a very high quality and has produced some of the best metallurgy results ever achieved from this type of deposit, so I find it hard to see any way that it won’t ultimately be developed – barring a collapse in the copper price, which seems highly unlikely longer term, given demand forecasts for the metal going forwards. The resources involved are huge, with nearly 11 million tonnes of copper and 23.2 million ounces of gold in indicated and inferred resources, from over 226km of drilling in total.

5 Slam-dunk sells for 2019 – December update. Read more from Nigel Somerville HERE

In terms of political stability, there have been problems recently with widespread protests as a result of the policies of the government, which have come about as a result of the economic problems that it has been having, and the need for a $4.2 billion loan from the IMF. To save money, the government cut fuel subsidies which were costing it $1.3 billion per annum, but has since reinstated them after the violent protests which led to the president and government officials having to escape from the capital, Quito. Things seem to have calmed down, at least for now, but whilst this presents a degree of risk for investors, it also highlights the need for projects like Cascabel to be brought online and to provide much needed income for the country, plus of course the many jobs it would create locally. The company does have a number of other projects in Ecuador, as well as Australia and the Solomon Islands, but the main focus is definitely Cascabel and is why I have concentrated on that, as it is the one that will make or break the company, especially given the level of market cap that it is currently valued at. There are of course risks that copper prices could collapse for a prolonged period of time - I see that as minimal; or that investment won’t be forthcoming to take it to production – again, I find it highly unlikely that this deposit will be left in the ground, it just comes down to the terms of any financing, which will no doubt include offtake deals as part of that; and then finally there is political risk, as the country was unstable during the 1990s, but as long as we don’t see a complete collapse of the economy there, then I see that risk as being acceptable. Overall, and based on the current share price of under 20p, I see this share as a strong buy as long as you are intending to hold it longer term. With uncertainty over trade deals between the US and China still ongoing we see copper dropping lower in the short term, maybe back to the $2.6/lb area, and that could see the share price going slightly lower, but I’d be happy buying anywhere around this level. I mainly focus on copper producers, but I may even take a position myself as I see value here and lots of upside potential.

Table of shorted AIM shares - week to 13/12/2019 HERE

Filed under: SolGold, James Berwick, Cineworld, YU Group, slam-dunk sells, shorted AIM shares

Rockrose Energy - a week is a long time says Peter Brailey...


Cineworld - a good shorting opportunity? Gary Newman reviews...


Silver is my metal of choice at the moment says Gary Newman


Golden Prospect Precious Metals - a gold buy


Hurricane Energy - valuation is far too high. I am short says Peter Brailey...


Altyn - mining equipment purchases, gold production increasing...


Versarien - when & at what price the attempted bailout fundraise?


The company playbook on Covid-19...


Doing nothing looks a great move... with a few possible exceptions says Nigel Somerville


As an investor, doing nothing is generally under-rated... but sometimes the facts have changed...


Bowleven - another AIM oil & gas play crunched by the market sell-off, is it a buy?...


A review of my favourite two gold stocks by Nigel Somerville


GVC & Aviva - catching up on some boring but worthy updates (& the continuing Amigo shambles)...


Volvere - a buy suggest Tom Winnifrith & Steve Moore


Finablr - the car-crash continues at Red Flag Central. Sell says Nigel Somerville


Aggreko, Ibstock, Ashtead & Robert Walters update - any value amongst them?


Hurricane Energy - more risks? Peter Brailey reviews...


Investment thoughts as fear has racked up in recent days - from Chris Bailey...


Ariana Resources - bank gains? A review from the HotStockRockets team...


Goldplat - interims emphasise return to profit & reasons for further encouragement


Gold set to remain strong & Highland Gold Mining a favourite producer considers Gary Newman


Petra Diamonds - now a sell? Gary Newman reviews...


B.P. Marsh and Partners - a buy say Tom Winnifrith & Steve Moore


OptiBiotix - now a US and Canada LPLDL distributor agreement...


Yourgene Health - Elucigene DPYD now approved for Australia, adding to confidence


Checking into InterContinental Hotels Group or Whitbread or Carnival instead?


Goldplat - further share buying interest, but still a buy? The HotStockRockets team review...


Pharos Energy - persistent seller providing a buying opportunity considers Gary Newman


Cluff Natural Resources - a buy says the team at HotStockRockets


Versarien - sell, and a target price of a few pennies if that says Tom Winnifrith


ITM Power - having been a great share tip, where is it going now? reviews Peter Brailey


NMC Health and Finablr - has Dr Shetty been a very naughty boy? Nigel Somerville reviews...


Ariana Resources - an exciting week ahead as interest (and the share price) mount


Rotala - trading statement, still a buy?


Ingenta - 2019 update & remains a buy considers the team from HotStockRockets


Apple & Tesla - are we getting close to the top? Lucian Miers reviews...


5 Slam-dunk sells for 2020 - January update and off to a flier says Nigel Somerville


Why value investors should buy PZ Cussons and not Crest Nicholson says Chris Bailey


UK Oil & Gas - 3 billion reasons to sell says Peter Brailey


Vast Resources is shortable and should be shorted says Tom Winnifrith


KEFI Minerals - after positive drilling results from Hawiah, shares still a buy?


Ariana Resources further adds to upcoming potential catalysts considers the HotStockRockets team


Sage, Sainsbury, Burberry & WH Smith update - buys amongst them?


Cluff Natural Resources is a speculative buy considers Gary Newman


Has Fevertree completely lost its fizz? Chris Bailey reviews...


Tip of the year Pires 24 percent ahead in 22 days but still value says the HotStockRockets team


Corporate updates frenzy - are Whitbread, Wood Group & Halfords buys?


Centamin - Endeavour deal off, ups dividend, shares down. Buy says Nigel Somerville


Where to place an investing bet in the gambling sector? Chris Bailey reviews...


Hostelworld - recovery potential? Gary Newman reviews...


Shoe Zone - full-year results suggest still income and further recovery attractions...


Sainsbury, Morrison and the two quid bargain bucket level...


Aston Martin - needing much more help than even James Bond can offer?


Next plc - where from here? Chris Bailey reviews...


Hurricane Energy - it is not in the Vomit list... but could be by the end of March...


Five slam-dunk sells for 2020 from Nigel Somerville


One of the 20 ShareProphets share tips of the year 2020. A buy from Tom Winnifrith...


Ingenta - a recovery buy?


Powerhouse Energy - still a sell after Santa update? Peter Brailey reviews...


What of - and where now for - my share tips for 2019? Nigel Somerville reviews...


Who might go the way of Thomas Cook in 2020? Lucian Miers reviews...


Ahead of my share tips for 2020, what of those for 2019? Chris Bailey reviews...


A dividend munchers update from Nigel Somerville


Time for a brokerage Christmas lunch review. Chris Bailey writes...


Ariana Resources - drilling news, shares well worth a look suggests Nigel Somerville


Three to take the Boris bounce profits in & Unilever unsurprisingly stumbles says Chris Bailey


Amino Technologies - various updates boost shares. Tom Winnifrith & Steve Moore write...


SolGold - a buy for the long term from these levels?...


Versarien - shocking interims & the cash is running out says Tom Winnifrith


BigDish only half apologies. Not enough says Tom Winnifrith, The Sheriff of AIM...


The FirstGroup share price train heads north again writes Chris Bailey...


Tesco - is the cash register set to ring big? Chris Bailey writes...


The Election and corporate stinkers Versarien & Purplebricks. Tom Winnifrith writes...


Give me corrugated board this Christmas, not more Metro Bank or Amigo desperation says Chris Bailey


Yourgene Health - a half-year results review from HotStockRockets


Image Scan Holdings - full-year results & where now following recent share price action?


FTSE reshuffle imminent - a review by Chris Bailey...


Argo Blockchain - a speculative buy? Gary Newman reviews...


Ariana Resources - potentially exciting deal to partially monetise Kiziltepe & Salinbas


KEFI Minerals - after recently soaring, Tulu Kapi project update...


Rolls Royce, Dignity & Sage - a catch-up by Chris Bailey


Versarien, Bidstack & AFC Energy - short now or later reviews Tom Winnifrith


easyJet - time to disembark? Chris Bailey reviews...


Views on Royal Mail, Centrica & Johnson Matthey from a jet lagged and thoughtful Chris Bailey


PetroTal - failure of finance & corporate governance control. Sell says Peter Brailey...


Time for General Inaction but still short Sirius Minerals argues Lucian Miers


RiverFort Global Opportunities - remains a buy say the team at HotStockRockets


Volex - positive interims, a good share tip and now we upgrade...


Oops...FirstGroup did it again. Chris Bailey writes...


Eco Atlantic - following Jethro & Joe wells initial results analysis, Peter Brailey reviews...


KEFI Minerals - financial & Tulu Kapi project updates... shares soar again & stance upgraded


Bluebird Merchant Ventures - Gubong permit received, shares very cheap?...


Rolls Royce remains an attractive long cycle stock considers Chris Bailey


A terrible deal for Sound Energy? Gary Newman reviews...


Marks & Spencer - you know what happens when there are no believers...


Kicking when down - ref. Sirius Minerals. Tom Winnifrith writes...


Columbus Energy Resources - Saffron prospect spud update, drilling excitement ahoy...


Image Scan Holdings - a buy considers the HotStockRockets team...


Large-cap earnings frenzy - Shell, Lloyds, BT, Crest Nicholson & DS Smith. Buys amongst them?


Tom Winnifrith reviews - is lying and fraud acceptable on the London Market?


RISK WARNING & DISCLAIMER - tips are provided by independent authors via a common carrier platform and do not represent the opinions of does not accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at and via emails you receive from [email protected] are for your general information and use and are not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by the tipsters or and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Trading shares involves the risk of loss. The tipsters and shall not be liable for any losses or other damages incurred. The value of investments can go up or down and the past is not necessarily a guide of future performance.

Five Free Share Tips?

. . . . . . . . . .

Well actually it will be six. One every week day and one on Sunday, each landing with you at 11 AM sharp.

The Details

Unlike other services (which may always have a vested interest) we pride ourselves on our impartiality and cover all small caps including AIM. the Standard List, The Wider Main Market and NEX.

We cover small caps, penny shares, FTSE 350 stocks and blue chips. We look for red hot penny shares, Warren Buffett style value investments with yield and growth stocks. There is no technical analysis in our work just solid fundamental analysis from a team of experts with decades of stockmarket experience.

You will not agree with all we publish but if you are interested in small caps you cannot afford to ignore it either. Yo'll never be charged for the free share tips from Five Free Share Tips and given the star writers involved you know that they will move share prices.

There's no telephone number or postal address required and there is no charge, ever, for your Five Free Share Tips membership. Just free shares tips every day apart from Saturday And each day's share tip will not just be a few thoughts cobbled together but will be detailed analysis from experts.

Our experts do not just earn their living from writing. All own shares. If they own shares in a stock they cover they will declare it and will not sell until after advising a sell to our readers. And why not our tips are so good that why shouldn't our readers put their money where their mouth is?

Don't just take our word for it! Judge us on the calibre of our free share tips and join today to start receiving them from September 1 2017. If you don't like what you get delivered to your inbox unsubscribe and you will never hear from us again. So why not give it a go? Sign Up Now

The Team

We've put together a panel of top tipsters, including:

Tom Winnifrith, in his 27th year writing about shares, noted fraudbuster & dubbed "The maverick Tipster"

Chris Bailey, City whizz kid turned financial guru, rated as one of the top 50 commentators on shares on twitter, founder of Financial Orbit

Steve Moore, has worked with Tom Winnifrith for all bar 3 weeks of his working life - a noted commentator on value stocks

Malcolm Stacey, The Grandfather of Share Blogging, the founder of ShareCrazy & a best selling autthor of stockmarket books

Lucian Miers, the Bard of the Boleyn, one of the UK's best known short sellers

Gary Newman, writes about value investing on AIM, speciality is in share tips on oil and mining companies

Nigel Somerville, The Deputy Sheriff of AIM, an expert in forensic analysis a skill used to bust frauds but also to tip true value investments

The team from HotStockRockets, specialising in AIM and small cap shares which will fly on a three month view

Sign Up Now

UK Investor Show 2018

Remember to book your place at the UK Investor Show 2018. The UK’s top investment show taking place on Saturday 21 April 2018 at the Queen Elizabeth II Conference Centre in Westminster, London. The show will feature a unique line-up of top speakers including Nigel Wray, tech queen Vin Murria, Dave Lenigas, Mark Slater, Tom Winnifrith, Adam Reynolds, Ed, Croft, Nick Leslau Luke Johnson and Dr Johnny Hon as well as 135 exhibiting small cap companies.

To reserve your ticket, visit UK Investor Show.

Risk Warning & Disclaimer

The hot share tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the share tips contained here should seek independent advice from a Financial Conduct Authority authorised Stockbroker or Financial Adviser. We cannot be held liable if individuals suffer losses through following share tips contained on this site or emailed out as free share tips. The value of investments can go down as well as up. The past is not necessarily a guide to future performance. Investing in shares can lose you part or all of your capital although the potential returns are theoretically unlimited. The difference between the buy share price and the sell share price for smaller company shares (penny shares) can be significant. Profits from dealing in shares may be liable to tax - the level of tax and bases of relief from tax are subject to change. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Some of the shares recommended on this site will be smaller company shares. By their nature such investments can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares (or 'small caps'/'penny shares'). & its sister site defines a smaller company share as any stock traded on AIM or NEX or which has a market capitalisation of less than £300 million.