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Ride the storm !! (I meant to say haha)
Add the word 'viable' in line 4...
Put yourself in the position of someone being asked to lend new money or extend terms of an existing loan. You have been told by the company that at the current copper price operations are not despite having very recently read that everything was fine and new money would only be needed for expansion. What would you do? 1) ask for a new management team 2) extract very favourable terms as you hold all the cards 3) take Rambler down, claim the assets and sell to someone else? What I wouldn't be doing is handing over large sums and praying for a sudden uplift in copper. If they can't make it work at 3.50, what price would they need to make enough to pay off outstanding and new debts and still be able to make a profit? They clearly need a lot of cash and in a hurry. For those still holding large quantities I hope it works. I kept a handful and would add if re-finance looked like a long term solution, but not at the current price. Without news I cannot see how we don't drop another 30%, possibly soon. I held far too long and learned that AIM shareholders are simply a means of funding dreams and lining pockets. Was a FTSE only investor for 35 years and am going back there.
& not forgetting RMM are a producing mine …. TB has got the mine in to a state where it’s ready to churn out massive profits. The current microclimate with high energy costs and inflation and the price of copper falling is stopping that yes but if it carries on copper will become more and more scarce as it becomes too expensive to mine…..so if the stocks of copper become lower what will that eventually do as demand increases? I’m in agreement we are going to see a turning point , copper will go back up imo, can’t continue much lower.
Next few weeks will be the lowest point for RMM. Ride the stroke everyone and good luck to you all.
I have my fingers crossed for an ore sorter
Elprofessor in agreement.
Raise £18m equity if possible rather than another loan at say 11p…. Doubling shares yes but the drop has already happened so that would give us a m/c of £36m… sod more debt for RMM don’t want more debt to pay…
Restructure with Newgen to a 10 year loan maybe pay some off
Pay all other outstanding debt (can’t be much?)
Most importantly by an Ore sorter ( if they don’t now I lose faith in TB he’s a miner after all) help us achieve much more profit and less capital cost) this will reduce expenditure.
Ok we need more staff with more production but the Mine will be a hell of a lot more viable.
Ok as terrible as it is as current holders have lost a fortune if they’ve sold but IF Ramblers do something similar to what I’ve just said then ok your investments will be half of what they have been for a while but if it includes an ore sorter announcement plus restructure of debt over a longer period reducing monthly outcome and allowing for more cash flow awaiting a more profitable climate with a bullish copper price then I can see everyone getting there money back plus more if they are patient.
Always felt Moon was mad to be honest but he is right…. Ramblers could put themselves in a far better position than they’ve ever been to ride the storm of inflation and volatile copper prices. IF they get through this period it really will be one hell of an attractive investment
the best thing to do is buy when this is low and sell when this is high
simples
So history repeats with RMM.
They'll spin the yarn of a mine full of copper at 6gpt, when in fact they extract at 2gpt with huge cost and high AISC, extra buildings and wotnot, sell a load more shares to their buddies who make a fast 20% then stock split 100 to 1. A whole new set of greedy retail suckers will buy into the story thinking they'll make a 10 bagger, paid rampers will appear pumping the story and anyone opposing this story of riches will get get banned from the forums. Rinse and Repeat.
I bought shares here almost 14 years ago.
Same story then as now. I think a £1000 investment then is now worth less than a tenner.
IMO Sell now or average down with a view to sell on the next spike.
All IMO... KWIM
Well said strummer. It also went NT to buy at 14p for a few minutes.
Drop overdone here. No where in that RNS did it say we cannot make payments to Newgen and we all knew RMM would need more cash. That said, The RNS was strange and perhaps designed to a cause fear…
Let’s see how this plays out, not a time to be selling IMO but ofcourse well done to those who sold in the high teens
strummer
maybe they sold,one second,before the rns.lol.
and yeah,you can guarantee,a few minutes afterwards,if would be NT to sell.
so selling,would be almost imposssible,without lowering your limit order,substantially.
that's always the case,after a negative rns,on aim.
Plus a running commentary on copper price movements
Plenty of fear spreading going on that is for sure. Cheaper entry maybe…
Fukurokju,
Thanks for the response.
I am certainly of the view that they should not raise equity at this SP without the existing share holders getting first dibs - hence my preference for a rights issue.
Current market cap is c £18M. Assuming that they did a 1 for 1 at this SP (ish) then I would like to believe that would give them enough to pay off outstanding creditors, make the necessary capital investment, such as the ore sorter, to reduce the cost of production and perhaps even pay down some of the LT debt/ restructure it. If all that were done then arguably we would be in a far better position than investors thought before the RNS.
I would happily invest the same amount again under those conditions. Would you? Would others?
Best wishes,
Prof
Has gone from spamming this board with ramping nonsense , to spamming this board with negative nonsense .
Worth remembering how wrong he was here when he was bullish , so it’s likely he’s just as wrong now he’s negative . I imagine the truth for rambler is somewhere in between
One thing that slightly intrigued me from Friday was the seeming ease that (by there own admission) a number of big players managed to exit or chop right down over the afternoon.
Normally when a share gets into issues no one wants to buy and the MMs make it very hard to sell, especially in decent chunks and certainly by enough to clear a large position.
Here though annecdotally there seemed to be few issues for the big sellers.... Even as the price fell, shares were being recycled to some one though. So MMs happy that there was a market and this buyer/ buyers allowed the big exits fairly smoothly appears?
Just musing last night on who was snapping them all up, and if it has any significance on what may happen going forwards.....
Thanks Elprofessor.
If it comes down to equity then they would have to give consideration to existing shareholders for any serious amount.
1:1 RI or any other existing shareholder participation approach would be a decent idea in this event.
It'll boil down to urgency, process and perceived success of each possible avenue.
Atb
FTSE, I get your sentiment. It's a great mine and some great resources and grades in the ground. Trouble here isn't one of poor asset but economics.
If the cost to extract those billions in metals and run the business is greater than the price we can sell the for metals for then RMM will never be able to gather the capital to reduce those costs.
They would need either a higher copper price or capital injection to allow then to reduce the operational costs by spending to make improvements and reduce the AISC.
I'm very bullish on copper. However because of many factors RMM can't continue to gamble on the price of copper. Honestly it seems like theyve taken this taxt up until now and have finally said or realised they no longer can do this. Whatever that is paved way to this latest RNS.
Atb
Fukurouju,
I was just about to try and write a similar summary to the one you have just done but you have both beaten me to it and done it far more succinctly and eloquently than I could have - thank you.
They have, for whatever reason, issued this RNS but not provided enough detail for anyone to understand the scale of the issue and funding requirement. I note the following:
'Operational results have been released monthly up until the end of June 2022 and will be discussed in greater detail in the Company’s interim financial report which will be released before the end of September.'
I would doubt the interim financial report will answer all our questions but I would hope it will shine a light on some key bits of financial info such as AISC and therefore the required copper price to breakeven operationally.
What are your thoughts on a 1 for 1 rights issue as a route out?
Best wishes,
Prof
Note I haven't included exploration spend in my list as that's optional. I'm assuming now they've realised a gaping hole they'll baton down and prioritise other tasks for the time being.
Zappy, if helpful, a quick overview of how a solvency issue would likely arise based on a typical secured lending agreement governed by English law (caveat: no idea if the Newgen agreement is typical or governed by English law):
- Agreement provides for schedule of interest and capital payments
- Agreement contains various warranties and/or repeating representations providing that various scenarios are treated as an “Event of Default” whereupon the lender can call in the whole debt and becomes entitled to exercise security. Events of Default are usually not limited to actual defaults but include all sort of indicia of being in financial trouble.
- If the lender becomes entitled to exercise its security, it will normally do so by appointing a receiver of the company’s major assets and/or by appointing an administrator or administrative receiver of the company itself.
- The aim of a receiver is to realise assets to pay the lender. If selling an asset, eg the mine, the receiver has to make efforts to obtain the best price reasonable practicable, but that duty certainly would not require eg waiting for the copper price to rise - it would be a case of what bids can be obtained reasonably quickly now.
- If cash is realised from a sell, it goes first to the receiver’s fees and expenses (inc legal expenses and costs of the sale process) then to the lender (inc capital and interest and lender’s costs) then if there is a surplus it is retained by the company
I’m not going anywhere with this, just trying to add a bit of info!
FTSE, the debt repayment may be that much but it all comes down to the cost to mine the copper they sell. In the absense of those figures the RNS suggests the current copper price isn't enough to support opex to run the mine, capex to improve the mine and a balance sheet to protect the mine let alone too pay back debt.
They need to get capex to improve the mine and reduce the opex/production costs for the long term. They need to hold the debt payments while this is happening. To catch up on any shortfall on accounts with suppliers and they need to have cash on the balance sheet to not be a low hanging fruit from competitors and be more resilient.
I agree equity won't be the default preference for RMM. Rearrangement with NewGen probably will plus any green energy funding they are eligible for.
Then it will be some form of alternative debt based financing e.g. alternative lenders.
Had they spotted this sooner, depending on the severity of the exposure, they could have looked at something like NON convertible bonds. A bit like pxc.
Hopefully they don't need to go down a placement route at this price but even that would be preferable to convertible bond route where the lender can exchange for shares at any time normally at a discount to prevailing price (death spiral).
Bottom line is RMMs strength is it's asset, it's weakness is its financial position as outlined above. Without more detail from the company any attempt to guess share price over any period is futile tbh.
Making this RNS announcement without a plan or detail is strange. I don't buy into a conspiracy plan to 'let mates in' that some share here. I can only assume they were forced to do so because of their precarious position, or it genuinely was poor and I'll thought out Comms.
Time will tell
Atb
Moon we don't have to do everything in one go ...when copper will over 10000 and our production will be 900 ton each month next year we can think other development .we don't have to repay everything in one go ....one think you r right ..rmm will come better than before once we sort out finance...people over panic and don't see the amount of copper they have underground with high grade .....
Moon, what about the paragraph about financial support to reduce carbon emissions just above critical minierals heading
Federal finance support all on last page of report just 2 weeks ago
They need a lot more then that upgrade tpd get new drill cost saving one upgrade electronic that been years and years they never did. They need get mine to state of art at moment 65 percent. I believe with everything upgraded mill at Ming mine ore sortor our cost could be 2 but we need lot of money to achieve that
They should have arrange the loan before they notify the market ...I think by X mas we will be 25p again once they sort out finance ..new CFO should arrange 20 to 30 million for 6 to 10 years ..
I Critical minerals
Canada has designated copper as a critical mineral and there are pools of funding and allowances to encourage the exploration for and development of copper resources. Rambler will seek to maximise these opportunities.
As the world seeks to reduce carbon emissions,
the drive towards renewable energy will push the demand for copper, both in terms of electricity generation and transmission, such as for wind farms, and in consumption, such as motors for electric vehicles (EVs). New copper projects coming online are scarce, frequently low grade requiring high capital investment, and often in challenging parts of the world.
Rambler is well-placed to supply the market with a quality copper product. In the future, the provenance and the carbon content of materials will become increasingly important, and Rambler can capit