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Carefree - With respect I don't think the risk of being accused of insider dealing is preventing our CEO from investing in the company. Insider dealing (as illustrated by those sells of 6M, 5.25M and several 1M shares on the eve of what was to my mind a disappointing RNS) is carried out every day on AIM and nothing is done about it because the market is virtually unregulated. The lack of directors investment in MTL is a big red flag IMO. Perhaps it's time to move on Incidentally, no one seems to know what those 'Registration of Change' notices referred to - pity.
Carefree - well made points! My phrase "given his intimate insight on it's future" was a bit clumsy...I simply meant he invest on the basis of the knowledge in the public domain as provided in today's RNS. Management and Directors are routinely investing in their companies as shown in "Directors Deals" , which in my understanding aligns their interest with the general investors. A criteria that Rick Rule looks for in his natural resource investments. IMHO the previous director buys did not help the SP because MTL was badly run and in financial dire straights! I think it would be a different this time around and would lead to a surge of confidence among existing investors and new spark investor interest in MTL.
I'm here like Lee et al for the long-term and waiting for the lower end of like valuations provided by Les.
The Navigator - "given his intimate insight on it's future" suggests inside knowledge so it puts the CEO in a difficult position. He may well be allowed to purchase shares but could then face accusations of insider knowledge. The risk of being accused of insider trading usually keeps people from buying and selling stock when there is a suggestion of insider trading. It endangers the stock generally and even if you win the battle, you still have to fight it out. The previous two director buys didn't help the SP. Lee - If want a copy of the spreadsheet then ask Les for my email and I'll send it to you.
Thanks for your thoughts Lee! I don't think ethics would be an issue if executed within the compliance framework Did he hold share in his previous CEO role over in Colombia? He should be prepared to invest on the potential outcome for MTL given his intimate insight on its future and also to inject a big dose of confidence in to the market place. I for one like to see the CEO to have a significant amount of skin in the game. If the next several years unfold in the way you say than the SP will get to where we all want anyway! Very puzzling for me too!! Is time to nudge the CEO into putting some skin in the game to boost investor moral?
I’m puzzled too, I keep expecting a sudden RNS stating he has, I can’t imagine any restrictions, could it be ethics? Perhaps he doesn’t play the market, it would be nice to see him invested, although it doesn’t effect the outcome, it just adds confidence.
Carefree & Lee thank you for the super numbers..very helpful for a realistic perspective on the debt time line! But why or why is the CEO not buying stock...are there restrictions because of compliance issues?
That makes sense, but of coarse the better grades next year may surprise us, it’s what we should be enjoying sooner, but at least we have that benefit ahead, my little pension pot will be swelling nicely in time for my 56th Xmas on this planet, good work my fellow investor ;-)
Wow, I was just typing that question to you, I was guessing 2022 Q2 but I knew your spreadsheet would have the answer, fantastic stuff, I’m still confident based on that to have us debt free late 2023, how do you see it, of coarse higher gold prices can make that shorter.
In that case, the senior debt is reducing quicker than I thought, although we are paying more interest, I calculate $1.15 million per month on those figures at the moment, the upside is the senior debt is getting paid down quicker, triggering the revised Mezzanine facility 7% interest rate when it’s cleared.
Manjung - The interest is accruing daily and compounding quarterly.
Lee - The Mezzanine facility was $65m at the time of the refinance (RNS Sept 11th 2020) Two quarters of interest compounded makes Mezzanine facility approx $69.7m at end of Q1 2021. All debt payments are currently to the Senior facility which I have now standing at approx $47.9m. My spreadsheet is $0.1m out because today's RNS has revealed that MTL can make more than one debt repayment per quarter (the Finance agreement stipulated one per quarter) so I can no longer calculate the interest accurately as we are not told when the additional payments are made which affects the interest accrued in each quarter.
The interest on the 15% loan is the majority of our interest accumulation, it’s high, but it’s affordable, the Major shareholders deal was our best option to carry forward the company, the other option was shareholder dilution to lower debts, non of us wanted that, so the finance deal we have is OK, I agree, we need to get the 7% loan paid down ASAP to reduce the 15% loan to a much easier 7%, we have $55 million to pay down before that happens, the $55 million I believe will be settled by 2022 Q3, which is a game changing point, where the high interest loan should evaporate at a much quicker rate, as interest will only be 7% or $360k per month at that point.
Lee, as has been mentioned previously on here, my understanding is interest is compounding daily on the mezzanine loan. So in 2 years your 62M becomes 83M. We need to get the senior debt paid off ASAP and these ' short term' issues really matter.
The interest is $1 million per month at the moment, $62 million @ 15% is $9.3 million per annum $55.5 million @ 7% is £2.75 million per annum Total debt $117.5 million with $12.05 million interest per annum. That’s $3 million interest per quarter reducing as we reduce the balance, when we settle the remaining $55 million at 7% then the $62 million @ 15% is automatically reduced to 7% saving us $5 million a year, at that point, interest will only be $4.34 million per year instead of $12 million per year as we stand today. We are still set to have our debts down to the late $90 million by the end of the year even at $1700 dollar gold, 2022 will benefit us with higher grade gold recoveries and surely Covid has been controlled via vaccination by then, so we will accelerate profits vastly and get us to the lower 7% interest rate by Q3 2022. I think we still on for much higher gold prices this year, and that speeds up thing considerably, every $100 dollar increase in golds value is around $7 million additional clear profits per annum.
On a positive note mtl are producing just under a million dollars a week profit. On a negative note the interest is swallowing up a lot of those payments being made 15.3 million paid in the last quarter and debt reduced by just under 8million. On a plus side not many aim listed gold producers in such a strong situation. It would be good to see a share consolidation here, and for the company to add some more assets. Once they get the debt lower the quarterly payments will clear it at a lot faster pace. If Gold goes were we think it will go that will be a huge bonus.