Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Thanks Sparticus, I got it now:) did thought so but just got confused lol
And we can convert at any time, at least thats how I see it, may be wrong...
The CLNs will have a 14% coupon, paid quarterly, and will be convertible at the holder's option at any time from issue until 15 days prior to their maturity date on the third anniversary of issue
AmurTigers
there will be a decent income, but we dont need it yet, we want it to go to development of phaze 2 NRR as soon as possible to get us a better revenue stream later when we do need it
Thanks both, I just don’t get why adam habib was so excited and, correct me if I’m wrong, was talking about hundreds of millions potential income for amc?
Per year, paid quarterly therefore around £163000 per quarter
AT - it's in the RNS. A loan note attracting 14% pa interest. We get none from the DSO sold until we convert the loan to equity I believe; ie $4.67m x 0.14/4 per quarter.
Its the Interest on our initial investment.
How did you got 157k interest payment??? Thought it depends on shipments etc?
.... share of...
Sparticus12 its exactly what you're saying that is my dilemma. We were asked if we would put in a sharif the increased capital contribution of $10m but declined. How can we expect that increased amount to give us something for nothing. Our investment at present is a plain vanilla loan with a 157k interest payment quarterly. Nothing else.
To become an equity partner I now suggests the loan becomes paid up for the 19% now 13.43%. That is our $4.67m loan provided us with the ability to convert to 19% equity before without further additional payments. The additional $10m reduces that equity share to 13.43%. So it must have been the conversion process was with no additional payments. I think I get it now. But the same questions exist in my head over the dilutive process.
When you speed up cash flow you increase NPV. Our 13.43% share has increased in value but our income remains the same since it is interest on the money ( the coupon).
Exactly Julian. What many haven't realised is that the purpose of the NRR deal isn't to provide a short term sustainable income to AMC in an of itself.
It is so that AMC can leverage against the future higher income of phase 2 with lenders who can help fund the capex required to fund the development of Kun Manie and lead to its development.
At the stage AMC are seeking finance they will be able to show lenders the off takes in place and the income from phase 2 of NRR
Conversion is unlikely to take place until such time as a dividend will be paid at a level which will give us more income than we are receiving at present.When this will be depends upon the extent that profits are kept in the business to help finance phase 2. This may not be until phase 2 is actually in operation and the full income potential of NRR is realised.
or another way Asabutchersdog
our investment of 4.6 million is now worth around $10 million, its very positive not negative as you are suggesting imop
i can be wrong so please pull it apart
not quite sure what your on about there Asabutchersdog ?
as far as ia m concerned the only way are % drop in Nrr is if they pump more funds in and dilute it
dont see much need for them to do that now after they have just sped things up
our 13.43% is a share of that $76 million, and if the value of the company goes up, so does our value in the 13.43%
where you get the difference in our initial investment of $4.6 million and $10 million and us paying it ? wrong surely ?
if your right that would mean all the other investors will loose % value in there steak as the company value increases imop
In other words have we taken the bait to earn income for the promotion of AMC and can only get the ever-increasing equity cost in NRR to achieve that by using our nickel/cu etc as collateral?
fendorio - until or if we convert our CLN to a position of equity and only then do we see any extra income from NRR in my view. Until then the value of the company increases and the conversion becomes more and more out of reach. Thirteen point 43% of $76m is more than $10m which I suggest means we would have to cough up the difference between that and the loan value. Thats $5.54m. But that gets us a 13.43% share of what could be an increasing profit the size of which we do not know. I'm just questioning whether the last option I mentioned is exceedingly better than just taking our $157k per quarter or worse in that we actually get not much income for AMC and the risk of further dilution (how much CAPEX is needed to expand the NRR plant to deliver 4-5mtpa?) from the big players in the pack against us. Or is it a way to forward purchase our nickel and by products by these same players? Anyone else have a view to help straighten this out.
Asabutchersdog and fendorio are both bang on imho.
How it plays out and whether you wish to invest in the potential is the puzzle for investors in all AIM mining companies.
Anyone who says any of these companies is a dead cert in either direction is either fooling themselves or trying to fool us.
fendorio is bang on here, and for what it is worth, having Rob Marsden seated on the Boards of Nathan River Resources and NRR Group Pte Ltd, goes some way of protecting AMC investment! (how much I am not sure but better than not having someone there)
I would rather own 1% of Amazon than 90% of my local butchers (sorry Bill). Of course because it would bring me a far better return.
I don’t think dilution in and of itself is so bad for us, whether or not it’s bad would depend on what the dilution occurred for. Upping production to increase profits, awesome. Extra capital needed for infrastructure (estimates exceeded), not so good. It’s all in the detail.
All IMO.
There is ambiguity in the above RNS re converting the loan note to 19% equity. It says 'Convertible after 3 years to 19% of the equity of NRR for Amur (based upon current issued share capital of NRR)'. Elsewhere it says UP TO 3years. Irrespective of this we can be be diluted to almost nothing by the other partners pumping more and more capital in over time as needs arise and I'm sure they will. So all we have is a $4.67m stake in NRR (paying 14% per annum or $658,000) and what could be a diminishing equity swap value. Already it's reduced from 19% to 13.43%. To get to the real money we need to convert quickly but then we could still be diluted can't we? Or we commit any share in profit to maintaining that 13.43% equity stake. That will prevent us drawing an income stream for AMC. Just my thoughts.