Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I have been thinking about Brads comment "we are confident we will get that back". This implies ownership or at least management. I am concluding from this that OMI have started to take a harder stance against MMA's stalling of progression in Phase 2.
Firstly there is no option for "care and maintenance" in the contract, so OMI has every right to force some action. The hardest stance would be to simply walk away with 100% due to MMA material breach and breach of spirit of the Exploration Agreement (the clue is in the title, it is not a "care and maintenance" Agreement). This would be an excellent outcome for OMI shareholders as we could seek new JV partners.
Alternatively, OMI might seek to enforce entry into Phase 2 by X date, lets say end of this year. Given MMA stance this year OMI would be entitled to trigger the management clauses of the Agreement which permits them to take control of the new JV which includes progressing exploration and have MMA pay the bills of up to $4m per year.
What else could he mean when he says "confident we will get that back"? Maybe it is dumb of me to believe him yet again but I think it is likely that one of the two actions above are in progress. If I was him I would have taken one of these actions at the beginning of the year. As it is, OMI have been very lenient with MMA and that has not worked so a change of tact is neccesary. I have added today, against my new investment rule not to buy if there are doubts over management quality.
So the flagship asset is in limbo with no enforcement of JV yet these clowns think getting involved in yet another project is going to add value? Market says NO. I am feeling very aggrieved that I invested here on the basis of proving up Anza , junior resource investing is already difficult enough without having to factor in contract non-performance and bizarre apathy of the licence holder towards it.
Karl: "Newmont clearly want out, Brad has said as much. Could newmont be negotiating with a third party to sell their entire stake?" If you wanted to sell would you take actions to destroy the price? No, I think the opposite is much more likely, they know the value of Anza and Agnico wants to take full ownership.
But you are correct that OMI can tell MMA to take a hike. I have been banging the table on this point since teh "care and maintenance" RNS. Time is up for our JV partners and the contract is on OMI side on this. We can easily walk away and retain our 100% of the Anza licences due to MMA failure to execute the contract. The fact that OMI are not even considering this while share price is hammered and cash dwindles away tell us that something is going on behind the scenes that we are not being informed of. I have postulated previously about what this might be. Whatever it is is clearly NOT in the interested of OMI shareholders.
Karl, the Exploration Agreement is with MMA which is itself a 50/50 JV between Newmont and Agnico. The evidence, if we believe what Brad has been saying in interviews, is that Agnico has been driving the project on the ground, and it is Agnico that is seeking to change terms for the new JV which must be entered into to begin Phase 2. Newmont are seemingly taking a back-seat but of course we will never know the details of the internal decisions within MMA.
Who cares what potential an asset might have if the company outright refuses to enforce an exploration agreement to progress towards proving it up? At least with my report to the FCA, and I was close to reporting to the Serious Fraud Office but decided not to at this time, I am happy that any takeover bid by Agnico will drop a massive red flag on the Regulators table.
Everyoneawinner, no, everything would be fine here if Brad was left to deal with drilling. It is having him in charge of contract execution that has been the downfall.
I cannot find the RNS now that included the link to the agreement. I believe it was Sept 2018 but maybe they did not RNS it immediately? Somebody on here provided the link ages ago but I don't see any way to search this chat history for keywords.
If I was advising Agnico one of the options would be to drag this out as far as possible until OMI have burned through their cash (nearly there), stock price cannot rise while this is being dragged out, then Agnico can buy out OMI for a song and end up with 100% of Anza. I am furious that OMI are just sitting there allowing this to happen, it is either gross mis-management or outright fraud.
Winner, the problem here is not the exploration agreement, it is OMIs total disinterest in enforcing the agreement. Upon completion of Phase 1 Phase 2 must start within 90 days. Here we are one year later. Very close to fraudulent if you ask me, OMI must take action to enforce the contract, my suspicion is that they have agreed not to and failed to inform the market which is yet another breach of market rules.
Which is why Brad should walk. Playing silly buggers now will not be the end of it. You do not want to be in business with a partner that screws you the way OMI has been screwed. I would very much prefer the toxic relationship to end and get new JV partners.
I do not share that view Karl. There was an article posted on this thread showing that Agnico has been recently trumpting their plans for "environmentally friendly" approach at Anza or such-like. Why would they do that, or indeed pay $1m to finalise Phase 1, if they intend to walk away? No, this is them showing OMI who is boss and as Brad has admitted trying to change the JV terms in their favour. Perhaps they want to drive shareprice down then offer to buy OMI for a pittance which would give them 100% control of Anza, remember MMA (and likely Agnico as Newmont seem to to be at arms length) got the results and choose what they share. First results at Pep were awesome then they drill the wrong way into dirt??? No, Anza is a beast and Agnico and squeezing OMI either to buy them out or to get better JV terms.
I have put OMI on notice, they have 3 days to acknowledge the complaints and 8 weeks to resolve. Summary below:
Complaint 1: OMI has obtained investment from the AIM marketplace on the basis of a time-boxed exploration agreement with MMA. MMA have not adhered to the agreed timeline and this has caused significant fall in valuation of OMI shares. OMI have to date taken no or inadequate action to rectify the situation.
Solution of this complaint may take the form of either:
a) Exiting the Exploration Agreement as non-fulfilled in accordance with permitted T&C of the agreement
b) Beginning Phase 2 of the agreement.
Complaint 2: There appears to be no mechanism for which AIM private shareholders, who as a collective are the majority shareholders, can vote on appointments or dismissal to/from the Orosur
Board of Directors.
Solution of the complaint is to call an Emergency General meeting to ratify appointees to all Director and above positions and ensure a mechanism whereby private shareholders votes are collected and counted.
What exactly has changed in the last 6-9 months? Nothing it seems. Brad says Newmont have other fish to fry and as such are leaving Agnico to deal with Anza and Agnico are playing hardball to try and change terms in their favour, no doubt "care and maintenance" is part of their hardball strategy. So our CEO bends over and takes it and "suggests that OMI take back control of the project"? WDF, OMI are 100% holders of the goddamn licences, the timelimit has passed, the correct responsive is to tell Agnico to f'ing DO ONE.
Total lack of awareness of the legal position, complete lack of business acumen, who make this clown a CEO, and more importantly how can we get rid of him?
I'll ask again to see if anyone here has any view on the matter, but at what point does it become fraudulent to raise funds from the market on the basis of a time-boxed JV, then when JV partners do not keep to the contractual timeframe simply do nothing? To me this is fraudulent. OMI should be walking away from this unfulfilled JV. I emailed SP Angel about these concerns but did not get a response. I will begin further escalations to AIM/FCA regulators in September.
Chicken, that is a very interesting find, thank you for sharing.
I have raised my concerns with SP Angels. No idea what to expect as it is the first time I have had to contact a Nomad.
I am going to give these clowns until September to create a way forward. Sept will be a full year since P1 ended.
PIs have invested millions into this company based on JV terms which stated 90 day transition time.
At what point does it become fraudulent to allow our JV partners to do what they like contrary to this agreement? I think there is a criminal case to answer here. These clowns are NOT entitled to screw PI shareholders to keep a minority shareholder happy.
Jackbal, it is dereliction of duty. The 90 day transition time is very clear but is being ignored by both parties. There is no force majuere reason why the term should cease to exist, and the only reason I can see is that it suits MMA to wait before committing to P2. Something stinks that Brad/Louis do not do the right thing by their shareholders and put a new deadline around the transition period.
This is why I will particiate my holdings to any action to remove the board. To kenji's post about nominee account I dgaf about that, I am the shareholder and if I want to take shareholder action my broker will have to post me out a share certificate in my name if I so decide.
Very nice for them to be gifted a non-expiring option for Anza while OMI holders may be looking at a PM breakout without participating in any upside. I invested in OMI based on a contractual timeline for Anza which our mgt are now simply ignoring. MMA can take as much time as they like to see how the political situation, or PM prices, play out. All in their favor of course while OMI shareholders nurse losses.