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The business has been hit with a double whammy of a huge rise in fuel costs and a fall in the copper price.
The rise in fuel means it is not currently viable to truck the ore 40km to the processing plant.
Capital repayments on the debt are due to commence later this year and the company won't be able to pay that so fresh equity needs to be raised otherwise the creditors will take control of the company
Good points metalhead, hence why I think this vague RNS was released. And they knew the effect this would have on the share price. If they are looking to do a placing (which the RNS doesn't make clear) then a lower SP will be favourable by the participants.
Didn’t we get paid 11 million for the gold in April ? Surely most of that is still knocking about .
You would need to add at least 2 zeros on to your £1 Million :D
Il start my bid for 1 million £
Potentially! The share price has dropped to make it more appealing!
I don’t think day to day operating cash flow is negative - the RNS suggests that isn’t the problem. But presumably it is not strongly positive either. And just breaking even is not enough for a company with substantial debt and significant capex requirements. I read the RNS as suggesting we are not solvent based on our current cash flow and current debt and capex requirements. That is the problem that needs fixing. Problem is, there is no longer an operational turnaround story to sell, as that has been achieved. If the company is now purely dependent on a rising Cu price to be viable, why will anyone lend or take up a placing, except on extreme terms?
dont u get it i said this to you all. you cant pay off debt with expending u cant in low cu price. i kept telling u on my charts its gonna be intresting one. look at. but i think rmm is right price now they need to do big placing 50 million or whatever they gonna do. this time it be amazing. u must allow for them to sort everything out
ViciousHippo, the statement may have been at a higher Cu price, but I now suspect that TB wouldn't have had a clue whether they are cashflow positive or not. As others have said, if costs were out of control, why didn't they hedge at USd10,500? But if what you say is true; that they preparing the balance sheet for a downturn, why didn't they say that?
I seem to recall sometime ago, one investor asking TB on a conference call about the top 3 items on the risk register, and he declined to answer. That should have given us a big warning. What was the largest holding in my Pension fund in April last year has just become one of my smallest, but the number of shares held hasn't changed and the overall market has also fallen.
Looks to me Rmm was forced into this RNS by a failed raise.
IMHO RNS had to be made to let insiders canvassed for the raise back out to allow them to trade. Same happened to SOLG a few weeks back.
Says operations are OK and issue is balance sheet. So there is a viable business, but shareholders are first in line to take or make up the capital loss.
Basically, they are skint !
Cash flows / revenues are not sufficient to cover the Opex , either currently or in the near future especially if the macro worsens.
Bit of a sticky situation
Just wondering if this RNS is a "For Sale" sign?
Yearend had assets at $70 Million + So they should be able to restructure the debt against the current assets (Not taking into consideration the value of the mines) - I cannot see them having any problem gaining funds based on the assets they have! The question is how are they going to do it? Which option will they take?
That is my thoughts! I do not get RNS like this! They would be better saying we need to raise X amount at a discounted price of X - On a positive if they can restructure debt with no placing then this should rise quite well! Especially if Copper prices rise in the coming months!
Smart move
I read somewhere a statement from TB that the company is cashflow positive. OK that might have been at the higher Cu price. However, it seems unlikely the company is going broke. More likely - and the way I read the RNS - they are a) making sure they go broke wont if copper has a serious decline and b) think they can do much much more with the mine profits with some extra investment. Trouble is at 10p a share, it's going to take a lot of shares to raise anything close enough to achieve both those aims. So I'd say the RNS was premature. They should have had a thought through plan to present.
Raxfactor, you make some very good points. I wonder if they haven't literally been throwing money at everything without any real cost controls. I missed the chance to sell, but now have no trust whatsoever in the management team. In the RNS they say the problems aren't operational but balance sheet ones... only time will tell if operations really have been okay i.e. that's actually true, but as I said earlier, Cu was lower than it is today when TB made the statement... “Going forward, Rambler will provide quarterly operational updates to the market which is now more appropriate given the condition that the operations have achieved.”... in which part of that sentence does it say... we're losing money and in danger of going broke.
Also why report it on a Friday afternoon so it ruins your weekend.
Seems daft though such a drop! Do you think it is because of how open ended the RNS is? It just seems like a pointless RNS if they are not sure what they want to do!
"At this stage, it is not certain whether the capital will be in the form of equity, a restructure of debt, or a combination of the two."
Although I have never posted here I have been watching and reading the RMM board for months.
I find it odd if you look at the cu price 5 yr chart the current price $3.5 is good well above the $3 in early part of 2020, if they have been basing the viability of the mine against the highs of above $4.5 spike then that is odd, a bonus but not figure that should be used as a reference for a profitable mine.
Inflationary pressures would be a worry going forwards, but should of been manageable up to now.
They have also had the opportunity to hedge at those higher prices to safeguard themselves against a severe drop in cu prices.
I also find it odd to continue drilling finding more areas to mine, and prove up cu reserves, and developing additional stopes it all costs money which they obviously don't have.
Reducing spend on these items concentrating on production to generate some cash flow should of been the way forward, drilling at a reduced rate as necessary could of been the mode of operation, conserving as much cash as possible.
The stopping of monthly production figures with lack of costing shows that with hindsight the management were left with time frame in which they have to report nothing and nothing is expected, so no inkling is apparent to this bombshell.
The trust of shareholders has been destroyed, it will take a long time to recover if ever with those who are left looking to jump ship at the first opportunity would not be a surprise.
Very disappointing RNS, and why release it half through a session anyway.
Further detail will be provided, alongside or subsequent to the release of the half year results.
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 don’t expect any update for at least 3 weeks.
I expect Any news on new funding will therefore be alongside (Same time) or subsequent (later??)) than release of the half….etc
One of worst RNS I’ve seen ….terrible.
Strummer.
I think you sum up well the dilemma we probably all have to stick or twist.
The main problem - already expressed by others so nothing original - is the lack of financial clarity. We all know that cashflow kills companies so if they had come out with we need more working capital of this amount to get us into this position and we are working out the best way between debt and equity then we would all know where we stand. But apart from Moon saying 50m we have no idea of the amount or even timescale. Is is 3 month down the line problem or next week for instance.
In a quandary.
Can ffs
It can't guide entries and exits I meant.