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Yes Slurm it's $2.3M + $19m + punitive damages which we have no figure for. What I would say is that punitive damages seem to be less likely in US litigation/arbitration cases unless it can be proven beyond doubt that a party has been malicious/underhand and warrants punishment. We don't know any of the details so it's hard for us to know if this has been the case hence the focus on the $21m that has been defined and cited in recent RNS's.
Probably waiting for any settlement to hit the bank account before jumping in!
I just want to be clear its in excess of $21mil, the client not fulfilling the contract has had a huge knock on effect to the company and its value. The market value has dropped more than the loss of profits...
why do people here keep referring to the claim being $21mil?
it was $2.3mil outstanding, $19mil of lost profits of contract and punitive damage ON TOP.
Damages in US don't have a ceiling.
Lack of funds may indeed be a problem but it SML and shareholders shouldn't bear the financial consequence of a client unable to meet their contractual agreements particularly when it's had such a profound affect on our own projects and value. At this point we're not sure who the client is so difficult to know what their position is but a contract was agreed and the client cannot unilaterally pull out of that contract without consequences. We'll know what those consequences are within days and how much of our $21m claim is upheld and ultimately payable.
Thanks Tarry Breeks. Seems to me that the problem was lack of sufficient funds:
"...that it anticipates having significant funds very shortly".
And that could remain a problem even if SML gets a favourable response from the arbitrator.
lol - well this has been in my bottom drawer for a while and I'd quite like to move it up a few levels - hopefully the BOD and arbitrator will oblige. :)
On face value Prop I agree, it's difficult to read between the lines on this.
The level of the contract is such that any company taking delivery of such significant quantities of magnetite, preparedness to deposit $4m as a deposit for future deliveries and the apparent intention to ramp up deliveries suggests we're not dealing with a small entity here. It's quite possible that the major client still anticipates significant funds and had hoped arbitration would buy more time to allow this to complete and settle. Is the major client major in respect to it's proportion of sales from us or it's national or international standing.
I hope this week it will become a little clearer and at minimum we can expect $2,300,000 in relation to payments outstanding to date.
We'll get the Sheriff in their premises to impound everything, freeze their bank account(s) and sell the assets.... (assuming the arbitrator rules in our favour and the client refuses to pay!)
Theres always profit takers.
Especially when we'd been becalmed below 0.5p for so long
After a decent rise we always see a drop but I hoped it would be different this time due to arbitration
Tarry, The first sentence of that RNS excerpt that you have posted has always concerned me: it clearly implies that it has access to very little funding - unless it decided to play games, from thereon.
Client was all over the place with letters of intent - this from May 2019:
"The major client has informed SMG that it anticipates having significant funds very shortly and has asked SMG to refrain from progressing legal action for two weeks. During this two week period, the major client has agreed to pay arrears of US $375,000 and top up the existing deposit, held by SMG, by US $3,690,000. The major client has indicated that it wishes to negotiate the balance of the contract during June and has agreed to the increase in the deposit amount to reflect its good faith in this regard."
https://www.lse.co.uk/rns/SML/strategic-minerals-cobre-client-update--9mywu72r7mug264.html
This money never materialised. I think this is significant.
something along the lines of them having to apply for a new environmental certificate, which then morphed into inventing a new leading edge technological break though process requiring lots more magnetite to radio silence.
Were we ever told the reason that the mystery customer refused to pay SML? Wa it because they had a grievance about SML's performance in some way, or because they didn't have the funds, or just because they didn't want to part with the money?
Good question but it's nearly double our current market cap in cash so cash alone should mean a sp of double where we are now and that excludes any value for any of our assets.
On an optimistic note, how much would £17m cash add to the share price?
Yes blacksheep, as per 2nd March 2020 RNS:
"Not later than 30 May 2020 - A reasoned decision of Arbitrator shall be issued."
"SMG will be submitting a claim for in excess of US$ 21 million. "
so to recap an RNS could land at anytime!?!?!
New Mexico is -7 hours BST so an RNS could land late in the day or overnight. GLA