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I don't understand the confusion here. They've just forward sold production at a fixed price. There is no upfront payment. It's a cash flow hedge (sorry...accountant for commodities trader). My guess is that this will have been a condition of refinancing.
Just look what happened last time rmm got themselves into financial trouble, right before TB took over. Simple case of rinse and repeat. And that’s what keeps the greasy wheels of the aim world spinning
I never said rmm would go bust, although that is a possibility.
I would like to see you send a company that has assets of £100 million + and debt of £25 million that has gone bust? Each business is totally different and just because you have not seen it happen does not mean it cannot happen! A lot of businesses get suspended and come out the other side! Most businesses that you will mention will have massive debt and low income! RMM is nothing like these and the RNS coming out have all been positive since suspension! As mentioned, there is an asset here that can be sold at worst case scenario!
This process is targeting cost reductions and improvements in operational efficiency that the management expects to yield cost savings of up to US$1 million per month.
announces it has taken a forward sale position for 750 metric tonnes of copper over a 12-month period at a price of US$8,330 per tonne. This represents a nominal 11% of expected future copper production from the Ming Mine, subject to completion of the 2023 budget
Over the years I’ve seen many aim companies find themselves in similar positions as to what rmm have found themselves in.
Never once have I seen a company come out the other side with happy shareholders,
As there investments usually get diluted to pocket change in order for the company to survive.
Never say never, but I would like one of these Uber bullish posters to show me an example of a company coming out of suspension with an sp of 4-6times the sp as it went into suspension
Know0.....why not simply say it's a hedge ?.....
Because it's not....it would say so if it was..
@Donal - It totally depends on who answers this question and their opinion on how confident they are in RMM. Old investors (Who are not invested now) will probably tell you based on past experience that this is on the brink of going bust and not to trust BoD and the shareholders will get nothing. Others will be more positive like myself and say that this is going to do well looking at the key points from the recent RNS's Copper prices increasing, Debt Restructure, Cost savings of $1 million per month, Production at the most it has been ever! in my personal opinion this mine is going to thrive once the stumbling blocks of debt refinancing is sorted! (Which to be honest the debt is not large at all considering the assets and production) I can personally see this hitting 30+ p in the near future (Once the suspension is lifted) and who knows what the share price will get to if production, profits and the price of copper keeps increasing! My worst-case scenario is they cannot refinance debt and put the business up for sale and we get something trivial like 20p a share!
Hi Everyone,
Im fairly new to share trading / chat groups etc so please forgive me if you think my question sounds silly. I first bought into RMM about a year ago and then topped up a few times with a view to holding for a few years.
I understand that there was a significant problem with debt / cash flow and the shares have been suspended.
Would someone be able to give me a high level summary of what they think the future of RMM / my investment is ?
Do you think that the suspension will be lifted or is a trade sale more likely etc ? And any sensible price predictions would be great. ( I understand that this will all just be best guess )
Cheers,
D
know 0 u are becoming even more worrying for us. starting to try and lose people again. this is why i stay away from ur way of thinking. u have some information that right but not lot.
This represents a nominal 11% of expected future copper production from the Ming Mine, subject to completion of the 2023 budget
Not sure why they would incur penalties, if rmm cannot complete the sale, as it is clearly stated in the Rns
DJ stating he will not post again until suspension lifted!!
If I had a £1!
Anyway, I’ve emailed for clarification.
Whether it’s a hedge or cash up front or something else!
As a group we will try and deal with the appalling way the RNS get written.
Why should there even be a discussion about a simple matter here - the RNS should be clear. The fact it isn’t again is concerning
Arguments for it being a hedge is that if cash received there should be no reason to keep the share suspended
But why not simply say it’s a hedge as they did from Nov 2020 to March 2022 about 2021 Hedge!
GLA
Fuku
I clearly say I don’t know if it’s a hedge or a cash deal. It’s crazy that the RNS isn’t written in line with previous RNS (like previous hedge or gold deal)
The rest of the below is fact - employees / moral etc. That is from the horses mouth
GLA
Publican....the benefit of the forward sales position contract is for lenders.....not for RMM..
Given RMM position (suspended!) and at the time of writing unable to pay the bills it would be unthinkable for payment to be upfront…
With Cu price now on the move up this again looks like poor timing…. And is likely conditional by the lenders to provide greater assurance they’ll get paid.
TB no longer calling the shots he’s a lap dog…
The forward sale position is a contract....it can be sold, traded, re-assigned....
What can one do with a hedge?
Er ....no...publican.... it's not a hedge....
It's a contact to deliver product...
>He’s just focused on saving the mine. Not the niceties.
So he should transition to be the mine's Chief Mine Engineer who they were recruiting for.
Being a CEO includes being responsible for 'niceties', communication with media and the shareholders. You can't just pick and choose the bits of the job you like and run away from 'yucky' ones.
A forward sales position is not a hedge...
It's a sales contact between two parties , with one agreeing to deliver product at a certain time ,of a given quantity,at an agreed price and the other party agreeing to buy it...
It has the effect of fixing the price, but it's not a hedge...
You buy a new car for delivery in six months , fixes the price but it's not a hedge..
A forward sales position is paid at the end of the contract.....we don't know when that is..
There is risk that one party may not deliver and one party may not pay....this applies to any contract
Why bother?.....because this gives an existing lender more security when negotiating re-financing terms..
It's certainly not a very clear RNS.....once again.
The opening line makes me agree with know 0 to be fair, the rest makes me not sure. Zero commentary from CEO. Has to be the most efficient use of words in RNS in history of RNS', do you have to pay for an RNS by the letter lol
It could be a forward sale and money in hand now, or a forward sale contract. It's ambiguity at it's best.
I believe the recent announcements are certainly pre requisites to securing the new debt. It's very much robbing Peter to pay Paul ATM but I remain a watcher of interest here.
Atb all
If only the company had a CEO to make a positive clarification statement to go along with the RNS.
Know0 - Im not convinced. I think it's a forward contract myself. Like an informal futures contract and a type of hedge arrangement.
But the truth is I can't be certain and neither can you, despite the misleading confidence in your messages on here.
Atb
A forward sale contract is a customized contract between two parties to buy or sell an asset at a specified price on a future date. A forward contract can be used for hedging or speculation, although its non-standardized nature makes it particularly apt for hedging.
Monkey - few things to dispel your theories
Nearly all the miners employed live in BV. The local gold mine has just closed and they were mainly BV residents
Morale (for those that remained employed) is good - and as they say, "it will only be a few months then they will be hiring again -it happens all the time"
Finally, I have only just had a chance to red the RNS - had msgs about it when I woke but didnt read the RNS
I'm not sure this is a hedge - I think Transmine may have stumped up the cash for them
It it was a hedge why not use the term hedge as they did every time last year and start of this.
We shall wait and see but I think it will be like the gold deal - cash up front
So yes they may very well have received cash equivalent to half the market cap
They get paid 90% on delivery to the store - but Transmine will likely take the first 62.5 tonne each month off the payment (against this cash advance at $8333 per tonne) and payout the rest
I expect we will get some news of a hedge for 2023 relatively soon - maybe not all the output but probably half
GLA & DYOR
Watch what gonna happen know am suprized u not said anything
I believe that the previous hedge had 90% payment upon delivery to the storage at Ramblers Goodyear port, with 10% upon delivery.
If they’ve done it via a forward contract they won’t get paid until the end of the contract