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I recently did some Due Dilligence work for a Venture Capital company on one of their investments - they had 2 weeks worth of cash left and since then they have got rid of the last 2 directors and all the staff and premises - no cash, no trading business - they have just engaged me to assist on the sale of the company as there are 2 (possibly 3) interested parties that appear to want to pay over $1M (CAD) for the IP of this startup that has never had a successful sales order (theyve had sales but the product has never worked properly). So those wondering about a copper mine with huge resources and the whole medium term outlook for copper and wondering whether or not Rambler can get a sensible deal to sell, then absolutely they can - and I say it could be all cash or cash and shares or even a straight share swap, but expect it to be min 35p per share
Those saying NewGen will just take the asset have no idea what they are talking about - it doesn't work like that.
If you believe Copper will be at $4 or above within the next 3 mths, then fill your boots - I have already bought more and am now freeing other cash to buy even more at this prices
But I am High risk so follow your own investing strategy and DYOR
With the market cap at £7 million and them needed money to grow. I can only imagine they will get some offers to purchase the business. I am not sure if it will be 35p but I can see 20p at least!
Clear that some posters do not understand selling a company or selling the assets are 2 completely different transactions and have 2 completely difference outcomes.
An equity sale would give the new owner everything - they would probably need $5M to clear old debt and buy some time and a further $10-15M for Ore Sorter
This is not much money - so talk of $50M or $200M is complete nonsense.
An exploration company would love to find Ming after spending $50M and look to spend a few $00M setting it up (and have LD thrown in for free!) -
So an asset sale of MM for $100M is certainly not out of the questioning taken as a going concern
An equity sale (either in cash or paper swap) is therefore very attractive to a buyer at $50M plus (probably $75M)
Also to dispel the myth, but NewGen cannot force the company into administration (from what has been provided wrt the loan note) as they are not even owed their first payment for over a month and if the one payment is made (by whatever means) then they cant do anything until December etc
The Board of Directors have a strict test as to whether they are trading whilst insolvent - if they are, they can become personally liable for debts. They will have had expert advice here and clearly they believe there is way out of this.
NewGen is the only generally secured creditor (people like Cat Finance for the new equipment will be secured against the specific plant) and the biggest unsecured creditors will be HanCon who are our miners and the haulage company and fuel suppliers. Some of the local suppliers gave a lot of leniency to RMM during Covid and many will now be expecting their money, BUT would probably wait a little longer
Without seeing the Aged Creditors I would expect Hancon to be the largest creditor - they have recently taken shares at 29p against 2021 liabilities so no doubt they have bills from Q1 2022 that are not being paid - but they continue to mine. They know mining its their business and they keep mining Ming for us.
So talk of administration IMHO is complete nonsense as no supplier is looking to force that.
In considering the next 3 months cashflow forecast, if NewGen will defer, there is no urgent need but obviously they will be wanting to repay the faith provided by HanCon and others
All this means that a refinance or a sale can easily be arranged in an orderly manner that will give Brad Mills (and all us other shareholders) a reasonable return - not the £1 we all hoped for by end of next year etc, but certainly a return.
However, it appears (from reading the RNS) that BOD want to go it alone - get a restructure of current NewGen debt plus get additional project funding for the ore sorter - but they still have to raise some more equity to get that way ($1-2M min) and need CU to get closer to $3.70 or above
One thing for sure K2 got out cos they had a closer look at the books
Insiders will not be allowed to buy or sell shares at the moment as they w
SXX springs to mind ……. Not looking good
not quite the same league as sxx (was main market, and lost plenty there). They needed financing in the 100s of millions to dig a very deep hole for a very cheap commodity (potash). RMM is already producing and, IMO, has low debt. Just need copper to move up and RMM can become profitable - cut a few heads too perhaps. I would imagine a lot of small companies are in dire straights currently, but have not admitted it yet. GLA, Dan
@Dan - I was thinking the same thing nothing like SXX! Totally different company and a lot less debt! This is still sellable with current debt and is producing good amounts of copper!
not forgetting the gold too with nice grades from the North zone (e.g. · 12.00m with 5.68 g/t Au, 11.00m with 4.71 g/t Au and
48.59m with 1.85 g/t Au) - see rns of 28/4/21. GLA, Dan
Ryan - M&A is my speciality - Ive sold NASDAQ companies down to £1M turnover companies
You sold - well done you did the right thing. You dont want to buy back - sensible you shouldn't.
RMM is not a distress sale but if it was it would sell for multiples of Current Market Cap - BUT they want to go it alone
My first decent size acquisition from was Administrators - I bought a company with £10M turnover and 89 staff. I then sold it a few years later at a decent profit.
So apologies for this, but a part time publican and cafe owner has no idea about M&A in the big boys world.
Yesterdays RNS gave me confirmation of what I expected after the early Sept car crash RNS - and that is that its not that bad and I have successfully restructured companies in way worse states with significant gearing - RMM gearing is tiny!
GLA
A couple of other companies for simple comparison. Pure gold (main market) operates at a loss and obtained refinancing recently as did VAST. If they can continue and secure funding then surely RMM can. Could RMM concentrate on mining the high grade areas for now whilst copper and gold are low (mine less and get better production figures) and then switch to low grade areas if/when prices recover ? GLA, Dan
Dan - TB confirmed this is what they are doing currently - reduces cost per tonne as they mine the higher grades whilst CU is lower.
He was very clear as to the fact they are able to pay all costs currently falling due.
The next update will be interesting - if its just NewGen deferral or if they have a more complete package to offer with debt and equity - they will need shareholders approval for straight forward dilution.
This is so 2021!! Apart from the fact we are in a much better operational position than then
Onwards and upwards
GLA
Why? They are not a secured creditor that we are aware of. We dont know how much aged creditors beyond terms is but expect a couple of $M max
Net debt is $20M (inc NewGen, Caterpillar etc) (down from 31 Dec 21)
BUT there is absolutely NO chance of this going into administration - see explanations above
But they aren't able to cover current costs falling due....they are out of terms with suppliers.
Also they've constrained production / guidance as they can not cover it short term.
I think this is more precarious than many care to admit. Having said that I'm not writing them off quite so readily as DJ, they can still make a deal.
The trouble is that really they need a boat load to really thrive and profit as a company.
I don't think they'll get a boat load, or are searching for that either.
It feels a little like they are trying to raise a reasonable amount (but still not insignificant) to keep going, but again in the hope that the copper price picks up, as the plan seems to be get money to get by rather than get money to fix the root cause.
It likely to be a vicious circle again, without capex on development.
Operationally certainly better but they are ahugh cost producer, in an inflationary market with lowering commodity prices and insufficient balance sheet.
I don't like to phrase this as a 'punt' I dislike that term and it devalues people's research and effort and personal choice, but it's for sure not a clear cut as many as inferring and it is certainly high risk.
I won't get into the asset sale squabble lol.
If a company goes into administration, the secured creditors and govt taxes get the first cash (and the administrators costs)
The all unsecured creditors (Elemental would be one of these along with HanCon and haulage company etc
Then shareholders
BUT as I said, there is NO chance (IMHO) of this going into admin and I would sell all now rather than buy more as I have, if I had any doubt about administration
Having been seconded to the M&A team, I agree with all the points that @Know0 is making.
I qualified and worked for a big4 firm before moving into industry so the points you have made are correct.
There is no point selling now for those considering selling. Given the vast potential of this company, it is very unlikely this will go into admin. IMHO of course.
3p target
I’m happy I bought loads today. When the majority shout sell or don’t buy, I buy and when they are shouting buy or hold, I always sell. It has worked a treat for me.
Imho DYOR GLA