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Glad we've got some experts in Ecuadorian corporate asset law. Remember ENSA is an Ecuadorian company and so will be governed by that. The idea that BHP or newcrest will keep CGP as its own legal entity is false imo. this doesn't happen, partly for tax and governance reasons. Any transfer of profits etc from CGP to BHP for example would be heavily taxed. normally in this kind of takeover the smaller company is dissolved and the assets and liabilities transferred. Contractural obligations are not assets, they have a separate legal term. we don't have a clue how the Ecuadorian contract for the ENSA holding is written.
addicknt, they don't own a share in Cascabel, they own a share in ENSA, which isn't just about ownership. it's about rules and regulations to build a mine. If you are right addicknt, why doesn't CGP sell their share in Alpala, and ignore ENSA. Answer they can't, because it's part of ENSA.
I'll put this another way. If, as is being asserted, CGP cannot be sold whilst continuing to own the share in Cascabel , why didn't NM point out the fact in the bid document? Why have CGP openly advertised themselves for sale with Cascabel being their main asset? Indeed, if they were prevented from selling themselves to anyone else without losing Cascabel, why would we bid for them? One of the key reasons for us wanting to take them over is defensive - NM knows he needs their shares in SOLG to prevent us being taken over. If no one else can get their hands on CGP without them losing their key asset, he wouldn't be at all concerned, but he is.
addicknt, it states clearly, that it needs to be reassigned, CGP does not own ENSA. ENSA, can only be assigned within the accordance of the agreement. This is not part of CGP. It clearly states, that it requires Solgold to agree to any assignment in part of whole. CGP do not own ENSA, therefore, it is not theirs to sell.
Zoros, I wasn't going to talk to you, as you normally spout rubbish, but will answer your question, as it needs answering. ENSA is an agreement, in order to develop Alpala, and any other property in ENSA, you must comply with the rules of ENSA. If someone buys CGP, ENSA does not transfer. That is the reason CGP cannot transfer ENSA if CGP is sold. Because the agreement would be broken. Some may argue, that just because ENSA is sold, means the new owner just has to cough up the cash. The answer to that is no. ENSA is about complying with it's terms. We have governance, rules, and timescales. These would not be afforded to any other company. Hence the clause, which says:
Transfer of Interests From the date of this agreement until the effective date of termination of this agreement, Cornerstone and ENSA may only assign an interest (whether legal or beneficial) in whole or part of the tenement or any interest of ENSA if
(a) SOLG approves the proposed assignee or recipient.
It's about assigning the agreement in whole or part, and with Solgolds agreement. Why ?, because Solgold has to make sure that the new party is in accordance with ENSA, and Solgold.
Thank you for the above KB007.
Solgold, will not agree. Again it's about assignment, as CGP don't own ENSA, it's an agreement that can only be assigned, with Solgolds consent. Read the above statement cafefully, over and over again. It really cannot be any clearer.
Quady, I assume you're referring to CGP, not BHP? To answer the question, if CGP was sold, the corporate entity would continue to exist - along with it's assets and liabilities. The only difference would be the ownership of said entity. Of course, in many circumstances a new owner would liquidate the topco and transfer the assets to their own structure - but that won't happen in this instance, at least until SOLG is taken over. And no, KB, SOLG are not lying in their presentations, it's just that you've misunderstood the structure and arrangement.
ENSA is not inheritable... if CGP cannot meet it's obligations in terms of the agreement then the rights of ENSA are not transferable to a new company. SOLG has first rights to the ENSA part of the agreement. Suggest you read the agreement drawn up fully and you may have a better understanding
I'm not new to fanning the flames, so here goes Quady. ENSA is supervised by the Ecuadorian government. They allowed two 'players' (at the time) to partake in ENSA. CGP and SOLG did just that and formed a partnership of three. I think this is what we all agree on. The conditions of ensa require CGP to get approval from Solg to sell CGP's 15% portion of ensa. (Why not the other way around also, is confusing). Anyone can buy CGP (and as has been said earlier, this goes on everytime someone trades shares in CGP). If one of these small share buyers decided to "go large", technically they could, on paper, buy £90 million of CGP and buy the company, couldn't they. In return, that new incumbent would inherit the 15% ENSA quotient. NOW. They can't do anything with that parcel of ensa without offering it first, to Solg. It is assumed (by the government) that the new incumbent MUST comply with all the Ecuadorian water table and environmental and social rights of the ENSA contract if they wish to replace CGP.
Good afternoon Addicknt, are you saying that if BHP, would acquire CGP, that they could do so, without changing the whole of BHP's cooperate governanace, as that is part of ENSA. You are suggesting that a company could acquire ENSA, and break it's terms at the same time. I don't believe you can do that.