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FTC,
Clearly a default has occurred but it doesn't say when and we don't know whats definitions are in the agreement. It's all supposition.
The result of non supply across both quarters has created a default in accordance with the agreement clearly.
The broader content and context of my post is relevant.
Atb
Fukurokuju79 said "I'm not convinced RMM would have had to issue an RNS against the gold streaming deal in q3 or even q4 as it was a commitment to fulfil gold supply on an annualised basis."
The RNS confirms that failure to deliver refined gold in Q3/Q4 22 is an event of default
TB has always been poor with communication and has hammered the share price on several occasions when there was no need. I remember a year ago when he did that right before a placing, should have been a red flag. Prior to that there was the covid RNSs which made no sense at the time. It's hard for anyone to say TB has acted in the best interests of shareholders.
Aside from screwing over investors with positive news while actually being in the doo-doo, this announcement only really prolongs the share freeze.
Newgen will run the mine to get they loan and interest repaid. Other debtors will have to wait until they have finished, presumably this is not securitied on any assets?
(Assets which RMM no longer control)
El Professor, comments in line. Yours in quotation, my comments after the >
' If NewGen are the the primary creditor they will take precedence over all else. '
>True
' If Elemental under their deal are classified as a creditor too then they would presumably be behind NewGen for payment. '
>True
' If that is the case why would NewGen let money go out the door to Elemental? '
> Agreed however the timings don't stack entirely. While NewGen would request or insist that other creditors aren't repaid as they are first secured lender over the asset; RMM have said today (first time this is mentioned) that no sale and delivery of refined gold has occurred for the financial quarters ended September 30, 2022 and December 31, 2022.
Payments to the company's principal secured creditor (NewGen) wasn't due to commence until 31 October 2022.
RMM made their update on the financial position 27th October, ahead of the default against NewGen.l as they would have had to.
I'm not convinced RMM would have had to issue an RNS against the gold streaming deal in q3 or even q4 as it was a commitment to fulfil gold supply on an annualised basis. So on a technicality they likely didn't 'have' to issue this until a point they knew that the supply deficit couldn't be met by production for the remainder of the annual term. It's still not an excuse and they've had ample time to inform the market of these constraints.
So in short RMM weren't in default until 1st Nov, after not paying 31/10 and only notified the market on 27/10.
So not supplying anything under the gold stream for q4 starting Oct overlaps fine in terms of NewGen having powers after the default, but not for the Q3 period ending 30th Sept.
In terms of so what's changed. IMO it suggests that the presumption Rambler didn't have a hold on its finances when they were suggesting all is okay was wrong.
It's possible it's something else but the most likely reason they didn't supply anything to elemental on the stream agreement in Q3 (before NewGen default) was because they either a) needed the gold revenues for their balance sheet to run the mine (opex/capex), or NewGen requested it didn't supply the gold.
In which case RMM would have been engaged with NewGen about the risk of default way before they announced the balance sheet risk to the market.
Either scenario, after today's RNS, doesn't promote a very good view of RMM.
Anyway that's my two pence
Atb
The wording a default "has" happened suggests that instalment deliveries were necessary to fulfil the contract and that for example the contract wouldn't have allowed a delivery of 1,200 ounces on day 364 of the first year to be met.
I'd be staggered if we hadn't already defaulted on 1st October 2022
Maybe that's a pure interpretation Prof. Not seen the nitty gritty agreements.
But I think we all agree. This is an egregious way of dealing with your investors, or in the case of those that bought in or added in Q3, future investors.
I can't see how he can defend letting this info be held on to.
Mind you. The whole way the overall financial issue was 3 months latter communicated makes me half think now that there has been a deliberate method to crash this down for someone's benefit, and it's not ours clearly :-(
Hi Strummer,
Thanks for your thoughts.
I think the deal with Elemental was that CEY would provide a minimum of 1200 oz of gold a year in each of the first three years of the agreement. The deal was RNSed in Apr 22 so presumably the first year end is around Apr 23, arguably therefore there is no default until CEY are not able to deliver that in year, hence why the RNS now with 2 or 3 months to go.
I am not saying this is good comms to the shareholders at all and I agree that the apparent pumping of the share over the summer period seems strange however I wonder whether they are legally OK with regards to the Elemental deal in not saying anything until now.
Best wishes,
Prof
Newgen might be the secured creditor but that doesn't mean they have control over the company's finances. Defaulting on their obligations to Elemental is a decision made by the company, not by Newgen. The company may well have been pressured by Newgen to divert the proceeds of gold sales to Newgen, but doing so has just led to two creditors after our blood rather than one. Elemental will be absolutely fuming. If the mine remains in operation there will not be a cent in it for shareholders.
In any case I think the main issue here is lack of transparency - the company is telling us in Feb 23 about a default that took place in Q3 22. There's No excuse for that.
Surely Prof, and as said.
The issue is that TB didn't RNS the lack of payments July onwards of the Au. At the time as guys have said, pumping the "goodness" of the share, and letting people invest without disclosure of this key fact during Q3...
If, if that's the correct reading, and this RNS seems to prove it.... Then isn't that dishonest, nevermind the incompetent financial management demonstrated over the piece?
If NewGen are the the primary creditor they will take precedence over all else. If Elemental under their deal are classified as a creditor too then they would presumably be behind NewGen for payment. If that is the case why would NewGen let money go out the door to Elemental? Presumably it is in NewGen's interest to either have the monies going to them to minimise what is owed to them or have it go to the suppliers who are key for the day to day running of the mine to ensure continued revenue. I would be grateful for any thoughts as to whether that logic is correct of flawed. Best wishes, Prof
>taking a sledgehammer and wrecking the **** out of it
It's a banger m8 trust me bro
Clearly there will be no value to shareholders now whatever the outcome e.g. asset sale, massive dilution, loan with onerous conditions, bankruptcy. It is very disappointing as I invested a sizable amount in good faith based on the data being shared by the company.
Definitely sanctions required against the BOD, but probably they will walk away having pocketed a decent salary for the last few years.
It's like planning to sell your car, first taking a loan taking it to the garage getting everything sorted then parking taking a sledgehammer and wrecking the **** out of it, before taking pictures and posting it on autrader.
If they are they shouldn't be allowed to sell anything not even on Facebook marketplace.
They finally hedged in the 3s. But when it hit 4.2.... nothing.
Has to be something going on in the background strikes me... Even before this latest p*as poor RNS.
Can they be selling it ?
According to the rns in January the company had produced 513 ounces and 401 ounces of gold in the 3rd and 4th quarters and we’re awaiting the assay results. So could this be the reason for today’s rns?
The Hancon situation is far from clear either, why did they need them, what did they do?
There is also Hancon & the non exec directors who took payment in shares, maybe it is going to be sold...
>(as well as purchasing stock himself)
His purchases were pitiful on the grand scheme of things. Could have also been a deliberate pre-meditated act to show 'well golly gee, I didn't know, your Honour, I genuinely thought the company was doing well, see, I even bought stock!'
Thanks buddy, will take a look later when I get home.
>Please link to the discord
Try this
https://discord.gg/dDnzmJCF
This is the main one. There is a further one for those who are happy to verify their holding called Rambler Investor Group. Believe last update from Know0 was that they are looking to speak to a legal representative as a collective (of verified shareholders) to formally engage BoD.
I have defended both TB and RMM for its perilous financial position previously as I felt they had been quite unlucky in some respects, for example the timing of an inflation/falling copper price at a time of a rapidly expanding mining operation.
However, today's announcement has finally confirmed the true position we are in. Even ignoring the fact that RMM for the past 8 months have almost certainly been failing to comply with disclosure requirements (this cannot possibly be argued as being immaterial to the share price), it has shown that the way the company has been managing cashflow has been nothing short of mind-blowing.
He has continued to invest in exploration/increasing the resource base even as the balance sheet was approaching a cliff edge. He has closed off the option of raising part of the required finance by drip-feeding bad information into the market to hammer the share price prior to suggesting a raise may be required. He has entered into offtake agreements when at the time of being entered it should have been abundantly clear to him that unless copper prices remained at an all time high a default on the new offtake would be inevitable due to the large existing debt with the secured lender.
I previously gave him a pass as I truly believed he couldn't be as bad as to sleep-walk this company into the abyss given his continuing positive sentiments and belief the share price was materially undervalued (as well as purchasing stock himself). Given the information we have now, it is exactly what he has done. It has to be time to go
Please link to the discord
>Law experts. Your take?
Stop fumbling around and join the shareholder discord group. Your holding is significant. They are coordinating on a response.