Member Info for addicknt

Sean, we are a long way off a financing package. It won't appear until the BFS has been finalised, so we have another year to wait. Much water will flow under many bridges before then, Grasshopper.

is taking a good spanking today (as it did on Friday) and yet we're up by nearly 5%. I'm certainly not complaining, but I wonder what's causing this, particularly as the volume is so light.

Ha! I hadn't seen that article. Mind you, it doesn't add anything to what we already knew.

Grundles, there has been nothing. The company provided only scant details but revealed they knew who was responsible and were pursuing all routes to recover the funds. I'm absolutely sure Jason had nothing to do with it, but his demotion makes it appear that he's carried the can.

RK, oh, definitely, that's always been my preference!
Actually, I will say one thing in agreement with Q&Co, they are probably right to say that over a 15/20 year period shareholders may well be better off if it went to production. However, this takes no account of risk and the fact that many of us will be pushing up daisies by then, including Mr Mather, who in any event looks as if he's about to blow a gasket at any moment.

As a separate issue on a funding package, the fees involved will be vast. Commitment and arrangements fees could account for 2/3% of the total, as will the advisory fees. Then add the compounding effect of the interest roll-up over a five year period and you get some idea of just how much is involved. And bear in mind we already have circa $10m accrued interest sitting on our balance sheet.

RK, convertibles have a nasty habit of acting as a brake on the sp for the simple reason the market is never quite sure if they will be exercised. However, you hit the nail on the head...how do you fund a project of this size in the absence of any income?
I know people loathe any comparison with SXX, but there's no denying the exercise is instructive. BCN is another case in point, but at least they managed to return something to shareholders.

to HL, there have been 14,634 shares traded this morning and yet the sp has just breached 34p. Weird, innit?

Pbow, that's a fair point, but for whoever is going to end up mining this there is the very serious issue of optics with the government and people.

Q, we won't have an unconditional funding package in place for over a year, so that's not a relevant issue at the moment.
As to the broader point, have a read of articles about how enterprise value is calculated. For guidance, BHP will not wish to inherit the debt funding and will pay it off immediately (or shortly thereafter) the transaction is completed - it's bound to be more expensive debt than BHP could raise, although they don't need to raise debt to fund a deal. This will be taken into account when preparing an offer and the value attributable to shareholders will reflect this.
I'm pretty sure BHP do not want to see us taking on a pile of debt and for me, this provides a sort of back-stop date for an offer.

ship, I called HL to register my intentions.

Q, those are not reasons why they won't, they are mere obstacles (although I know from personal experience they are irrelevant in a serious bid situation). I am talking strategically, the tactics will be put in place to deliver - that's what corporate finance is all about.

Q, there has always been a number of flaws in your argument and there's not point rehashing them all again, but there's one point which you've never been able to answer and that is; why do you believe BHP will be content to own a small minority stake in this company when they've done so much to fund it so far?
If they believe in it, which they most obviously do, why would a company that's throwing off enough free cash flow every other week to buy us, sit back and let a new competitor emerge? The idea they would makes no sense whatsoever.
Indeed, this argument extends to every other global miner, even though they don't have their foot in the door in the way BHP does.
If anyone can provide a convincing argument to this central question I may take the production view more seriously.

Jerry, absolutely. I think different personality types dictate which you prefer. I was driven by the desire to be the master of my own destiny, combined with the fact that I'm not very good at dealing with authority. If someone tells me what to do I tend to react badly.

Bozi, you're not wrong there! Mind you, I could never have spent my career in a large corporate - I loathe them.

Good post, rcgl, and I think you're correct about the NM severance package.

Just to complete my personal anecdote, one of the guys who was due to join me in the mbi got cold feet at the last moment and dropped out. He went on to become CEO of one FTSE 100 company and CFO of two others, all household names and from which he's recently retired.
He did not invest a single penny of his own money throughout his career and has made far more money than me. More fool me. Btw, we remain good friends!

My views on the remuneration/risk issue are founded on two strands of thinking; the broader question of director rewards of public companies and the specific issues relating to our business.
The second point has been well covered by people on here and looking at the responses it appears people are unhappy with the proposals.
On the first point, over the past twenty years we've seen public company directors reap massive rewards for virtually no risk to themselves. This trend was driven by them being of the opinion that they deserved the same level of return as those who ran private equity owned companies - this is just plain wrong. When I did my first mbi in 1989 I invested 200k, of which I had to borrow 100k. I was 33 years old and this represented everything I had. As I had a young family it was a massive risk. You will never see a public company director take the same level of risk and yet they expect the same return.
Director remuneration is a running sore and is totally out of hand and personally, I find it abhorrent. In situations such as ours, options are being offered to provide a private equity type return and yet we have a CEO who, as yet, hasn't spent a penny of his own cash and I'm afraid I don't approve. (btw, I'm not being critical of DC, who I reckon is a good CEO. But I'd be far happier if he ponied up 500k) It'll be very interesting to see how our main investors react.

Q, absolutely.
It's very easy to envisage a situation whereby the share price becomes inflated simply by virtue of bid speculation. The board will have done absolutely nothing to achieve this, but their remuneration will increase.
I also don't like the fact that we have two new directors and the first thing the board seems to be concerned about is how can we give them far more money than we we agreed to pay them only a matter of months ago? They accepted the terms they were offered and I have seen nothing to suggest they are suddenly worth a lot more.
I know I'm a bit old fashioned about this sort of thing, but I really don't like it.

I think I'll be voting against all four of the motions.
I thought I'd vote for the change in the Articles, but the one relating to board remuneration is putting me off.
Apparently, our board is insufficiently motivated and all need more money to ensure that they become so, and the good news is that this can be achieved under the guise of improved corporate governance. Well, forgive me if I don't see it the same way. They are all well paid enough already and if they feel they are lacking a reason to get up in the morning, I suggest they find another job.