Alberto share purchase is the most positive news we have had for some months. Another great indicator that all is well and going to plan. Alberto buying shares on the open market must also mean the finance talks have concluded. Suggests to me further positive news on its way.
I'm sure when I was at the AGM I read in the material they handed out that IQ & AL were NOT allowed any issued shares until Emed were in production. Did I get it wrong PLEASE somebody tell me it ain't so!!!!!!! And if I'm right then what the hell is going on?????
Having worked to have key permits granted towards the re-starting of production from the Rio Tinto copper project in Spain, EMED Mining (EMED) has announced a €6.80 million net cash outflow in the six months ended 30th June 2014. Together with that negotiations “in respect of an equity financing to support an altered debt and equity structure… have taken considerably longer to conclude than originally anticipated”, this put its balance sheet in a troubling position and has seen it conditionally raise a further £13.1 million at 7.25p per share “to fund its activities up to the end of 2014, and thus enable the company to finalise its plans for the full financing of the Rio Tinto copper project”.
The new funding is being raised from existing investors Orion Mine Finance Fund I LP, a New York-based copper trading and investment company, and Yanggu Xiangguang Copper Co. Ltd, a China-based copper smelting group and prospective cornerstone customer for the Rio Tinto projectThe structure and price of the funding is disappointing – though reflects that it is needed for the company “to ease its short term cashflow issues under which funds are required by the company by the end of the current month”. At least “no commission is due to any parties in respect of the subscription”.
We have stated from the start that financing is a key risk here – though it is emphasised that currently “discussions are ongoing… in advanced negotiations with major international financial institutions for senior debt facilities of $200 million” and that “the restart is expected to be relatively straightforward from an operational perspective, with an established infrastructure and processing facility that can be restarted following refurbishment”. With further additional funding to be needed for 2015 if long-term financing for the Rio Tinto project can’t be accessed by then, there clearly presently remains a strong speculative element to the shares.
However, the upside on financing being agreed and the company moving into production likely remains highly attractive and this thus looks to remain one for those happy to accept the relatively high degree of risk that tends to go in conjunction with the prospect of substantial, relatively quick, capital gains. Buy – when the dust settles the shares will be at 20p.
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