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I'm happy for us to disagree on it however I'm still in the camp that my explanation and definitions are sound and while I accept that I'm sure they could wrangle the detail and get out if they really desired it, I stand by my understanding of the term binding term sheet as opposed to non binding. I.e. they have signed and entered into a binding commitment to conclude the deal. That is the point of it being binding and which differentiates it from being a non binding contract.
I also believe due diligence is completed as per RNS. We agree on the key aspect that it will close. The rest is semantics I suppose.
Atb
RNS 31August 2021 Stated,
Technical due diligence has been satisfactorily completed by Newgen Resource Lending Inc. ("NewGen") and both parties are working to finalise the legal documents including the loan agreement and ancillary documents, and to complete the standard closing process such as encumbrance and lien searches, and registration of security. The closing of this debt financing was scheduled to occur at the end of August 2021 and is now expected to close on or before 30 September 2021.
I'm listing today in the diary as the rare day that Ant and I agree.
Binding term sheet is always subject to 'get out clauses' otherwise there would be no recourse to a change of circumstance.
We are all still waiting for the due diligence to complete (most probably the do you own what you say you do, is it worth what you say it is - and prove it).
For what its worth, I still strongly believe it will complete, I don't think there will be further use of Riverfort (guessing), nor do I believe there will be a further raising. As the mine improves our ability to self fund improves.
RMM do however need the money to complete the turnaround in the stated timeline.
AIMHO.
GLA
DYOR
Not Finical advice
BKTEO
Ramble on Ramblers
well said thank u
A term sheet normally has some binding terms, but is overall non binding. However this clwas always signed as a binding term sheet which isn't the same. The essence the difference between non binding and binding is the obligation to close the contract (perhaps subject to some get out clauses in completion of a successful DD) which we've been told is now completed.
What's left is the mundane, complex techy legal loan documentation that takes ten times longer than it should along with the customary 'red rape' stuff.
I don't agree Antharry. The Company has signed a binding term sheet for a 3-year senior secured loan in the amount of US$20 million subject to customary conditions with Newgen.
NewGen and Rambler have signed against 'binding' terms. That is a legal term as opposed to 'non-binding'.
They have also completed technical due diligence.
While I can accept nothing is guaranteed until the money is in the bank, RMM would have access to recourse should NewGen not finalise this loan now.
Let's not forget the loan is
a) legally binding
B) has had technical due diligence completed.
c) 'they are simply working to finalise the legal documents including the loan agreement and ancillary documents, and to complete the standard closing process'
So firstly it's not a case of if the loan completes, but when IMO.
However clearly no one wants the deadline of end Sept to be missed. They are obviously pushing to wire and I'd imagine trying to complete asap. It like closing a house and exchanging that seems too never end......
If they miss the deadline I'm not concerned that it suggests a fundamental loan issue.
The short term risk is that a delay may introduce interim financial requirements which they would clearly either use the CLN for or a placing if it works out to be better terms. But even that would be short term pain IMO.
I'm personally happy to hold it out still either way. That's not blind faith, it's simply viewing this with a longer lens and having confidence the debt loan will complete as soon as they can do it.
In the meantime it sounds and appears they are managing the covid situation with as little disruption to the timeline as possible ATM. Nothing materially changed is still my view.
Atb