Firering Strategic Minerals: From explorer to producer. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
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
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?
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.
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
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 :-(
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
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
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)
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
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
Thanks to all who posted responses. Some stuff that I had not thought of so very useful thank you. Not sure what to think at all now!
Best wishes,
Prof
Now after sorting out few things. I am now even more conterable with situation. future is bright yes rmm let us down but this is point we’re theybsorting it out finally. Both company knew situation
Moon it doesn't matter if both know the situation, knowing something doesn't make it better.
I could know I've lost the keys to the car in the sea, it doesn't help me drive home.
It's not the best time in history here. It's very likely the opposite. The fact we know it's the opposite didn't make it the best. That's not how it works lol.
Anyway have a good weekend all.
Atb
It does work like that u really can’t get a company that bankrupt in 2020 to what it is now impossible. If copper prices not what it is today rmm would be finshed.. tb has done amazing job sorry he has turned this around and done his best get all money he can. This point is the important point if rmm get 100 million then we are at point that rmm can be become 1 pound share even more. But for that to happen this is point that even Brad mill ftse manager at one time not let rmm go to pot. Yes am disappointed me and tb have not had best disscation. but i kwn many party involved.
'You don't go from bankrupt to where it is now impossible'?
I agree if by that you mean you can't go from bankrupt to worse than bankrupt...lol
At the end of the day I'll let you have your own views, but honestly it seems a very peculiar view to have.
They raised a load to stay afloat, the mine was operating much better (TB has certainly proven he can manage a technical delivery I agree) however despite this they still weren't operating at break even or a profit.
- They had to borrow against the asset, they've defaulted against that borrowing.
- They've defaulted against another creditor.
- They've suspended the shares at rock bottom.
- There has been no positive update or evidence of a viable resolution or a willingness of the creditor's to negotiate.
- They have only a matter of a couple months or so before the exchange delist them.
- They have missed supplier payments and are now experiencing further operational issues due to that.
It's really not the best time for RMM Moon.
Chances of survival are slim but I hope they do sort something out for those that are here. However the cost of staying afloat is likely to be high to current holders.
Atb
>you can't go from bankrupt to worse than bankrupt...lol
Bradbury:
- Hold my beer
I’d argue that TB has actually done a terrible job at technical delivery. Sure the mine “appeared” to be running better under his management but he clearly has been unable to reign in costs and get production up to the numbers he constantly sells to investors. They brought in contractors (Hancon) to try and increase development but ended up just burning cash to no meaningful long term gain. The production reports are all full of sunshine and rainbows with the actual issues being hidden between the lines.