Member Info for Broomfielder

Awax - The US$55m loan facility was mentioned in the Heads of Terms issued when Oaktree agreed the finance package for Ormonde's Barruecopardo project.
It contained a contingency element but in any case its nowhere fully drawn at the 2018 year end.
It would be helpful if Ormonde issued a Statement of Affairs on completion of the Capex associated with the mine reopening, so that we (ie shareholders) determine how much has actually been used and how much remains for operational purposes.
We would all like clarity.
B

Thanks for your observations flundra - a lot of the comments on this BB have rightly exposed just how little we PIs actually know about so many key aspects which could ultimately impact on our investments. It may well not matter in the fullness of time as some suggest, but we all do take a lot on trust when investing in AIM cos.
Briefly, where project finance is concerned, there will be recognition that hurdles/covenants in the early stages could be breached on a rolling basis. They will have set based on projections but accepting the limitations this has. Any breaches will not be quite automatic but easier assuming all reasons for the breach are themselves accepted etc. It will be quute different once the project is beyond initial start up and in commercial production etc.
Your points regarding the status of each Oaktree vehicle are valid. However, in practice there will normally be a Control entity within a linked Group which effectively polices what otherwise could degenerate into a free for all.
The main thing with JVs is to acknowledge that it is normally a partnership which each party recognises the worth of the other (otherwise they would never have established a JV in the first place).
A bit simplistic I concede, but that's how we should proceed. In life however, we do know that not all end up that way. Although I am not a fan necessarily of lawyers, thats why we do always need good ones!
Cheers.
B

Hi flundra - I think, as you say, we PI's, are left to assume rather a lot when it comes to the key documents pertaining to the venture in which Ormonde are involved. To the best of my knowledge, the JV Agreement, the loan doc etc far less a Project cash flow forecast have never been made public so we are really left to guess at rather too many areas.
As you say the headline debt was/is US$55m but we were never privvy to whether it was exclusively Senior or a mix of Senior/Mezz etc. It contained a contingency to minimise a risk of a liquidity crunch early etc. but we don't know the terms nor the repayment structure.
Lenders will always have step in rights and given the debt facilities are being provided by the Oaktree stable, its understandable there are concerns Ormonde could be squeezed out in the event of default.
The possibility of such an event should have been forseen and as I said earlier been addressed in the JV Agreement. This should have been a concern of Ormonde's BoD and in circumstances where its not a 50:50 deadlocked JV, this should have been acknowledged by Oaktree. They may be rapacious, but they recognise the value of Ormonde's skillbase and its local and Govermental connections which have proved crucial in the mine's reopening. They will be careful not to upset local or political opinion as issues here in Spain could quickly escalate to become a major problem.
The only slight niggle I have on this particular issue, is the beneficial ownership of Saloro (for Oaktree's 70% element), is owned by OCM Tungsten Luxembourg Holdings sarl - this is a Co owned by Funds managed by Oaktree. Now these Funds may have more limited wriggle room than appropriately structured Corporates.
PI's have probably over reacted on the recent RNS, but given we seem to operate in something akin to a news vacuum, I think its understandable.
Its up to Ormonde to keep its shareholders informed better - I'm sure Oaktree keep their investors in the picture - and that could assuage a lot of concerns as we move forward.
B

Thanks for all your efforts here Slalom in posting a copy of Davy's recent report / views on the FY Results and generally where we are at Barruecopardo etc.
Albeit a number of years ago, I have worked alongside Davy and I rate them highly.
I can only surmise however that their latest 'observations' are a lot more woolly than I would have expected (or tolerated in my 'past' life) given these are for public consumption / record.
Would have thought however more robust comment on (anticipated) future cash flows at the very least would have been forthcoming. Not helped I suspect with Ormonde's project monitoring fee only reverting from €0.75m to €1m following 2 consecutive quarters of positive cash flow now looking more distant etc.
I also would expect Davy to have been satisfied (along with O's legal team etc) with the terms of the JV Agreement which would regulate the entity in the event of any subsequent default situations arising (ie to prevent Oaktree artificially obtaining control of the Project vehicle through control of the loan facilities) by, for example, setting Performance hurdles and Financial covenants too aggressively etc.).
B

CP - I agree with your comments / sentiment on the FY figs. etc.
The 'silence' from the Co at/around key milestones of Barruecopardo's restoration and trial production was never likely to be a positive and so it has proved.
So, rather disappointingly, the mineral quality has thus far fallen considerably below that forecast albeit there are the usual explanations given. My quick glance did not reveal any issues on cost overruns etc but we have already broken our Loan financial covenant(s). The breach has been waived but no mention of the fee etc nor the position if there are further breaches. And when could 'actual' default occur. I am saying this particularly in light of the comments expressed by Mike Donoghue for the remainder of 2019.
There is no updated projected CFF unless I have missed it although I accept as these are not in any way part of the Aud. Accts, this item may be made public later.
The deterioration in tungsten prices was always a danger but has simply magnified the issues at start up.
All in all, although opening mines is never straightforward, particularly given the lead time to income generation no matter what is being produced, I have to confess disappointment at where we are and the lack of clarity on where we might be 12-18 months hence.
There are hopeful signs on the tungsten market/prices even in the short term, but there remains more uncertainty than I was expecting at this stage.
The eventual end prospects remain in my view very positive but we will have to remain more patient than most anticipated. Its looking a longer 'play' at this point.
Meantime, the Co et al have to improve the quality and frequency of their Market updates IMO.
B

..affecting both Argentina and Uruguay according Sky's breaking news.
Seems a wee bit bigger an issue than a damaged turbine!
Lets hope someone puts the plug back in the socket soon.
B

Formal notification of GF's nomination (by YF Finance) to be appointed Director at forthcoming AGM.

B

Bbr - you certainly had to dig deep to get the story of Cochrane Power's ownership etc. A new name on me I'm sure.

Adoption of the QCA Code appears to have brought forward further info (although details on issues such as EdS full accounting, terms of CAMMESA's loan to EdS etc are 'silent' under the veil of 'equity accounting' of a JV. Perfectly legal, but given also adoption of the QCA code under Principle 2 labours the need for engagement with stakeholders as nauseum, further clarity on these and other matters are surely warranted.

Given the continued liquidity pressures, you may have thought conversion of part, at least, of Directors' emoluments to (Rur) shares would have been appropriate.........

IMO, the new AIM code permits a lot more accountancy window dressing to be adopted to stretch out Final Accounts even more.

As they say, actions (always) speak louder than words....and lots of them. Lets get some assets sold!

B

Net Losses before Tax down to £0.6m which could have been reduced further I'm sure were Admin Exps still not too high at £1.5m albeit down on previous year.

Voiced previously on this bb, is concern over the terms of Loan funding (via CAMMESA) @ US$6.6m toward meeting the US$8.8m refurb at EdS. We remain no clearer.

All in all, a first glance throws up no unexpected news with it being little surprise NAV per share has reduced modestly to 4.4p from 4.5p.

The AGM on 27 June is our platform for change.

B

......Or, we can always dream the MMs are trying to fill a very large 'buy' order.

B

At this rate of funds flowing inwards to Rur (provided it continues), there's every prospect we could become a cash cow.
Hardly a problem I hear you say.
However, what we really have to sort out are the number of parties trying their utmost to milk us dry.
B
B

Ok, with the 2018 Audited Accounts imminent and the AGM thereafter, lets assume that in amongst that, our BoD announce that Rur is now free of debt following further repayments from EdS.

Simultaneously, we can expect to hear that our BoD have also announced bonus payments (to themselves) on top of their already inflated emoluments to mark the occasion. I would be surprised if they don't and in any case, we are told we should be pleased by this. Yes, almost as if our BoD had to work hard to achieve this on our behalf.

On the other hand, we could certainly put the cat among the pigeons by nominating GF as shareholders' representative on the BoD. By doing this, we can also get our views (ie those of the average PI) over to the BoD and attempt to influence the decision making process.

As GFD says, we have to work together to bring change if we can as the status quo is untenable for PI's.

Its time to push for change.

B

....bbr for the winds of change which are getting stronger by the day and will soon blow this BoD away.

And that would be to the benefit of ALL shareholders.

Time to go gents...And to go now!!

B

More than happy to add my vote in support of GF's nomination to the BoD.

B

Have to admit I was beginning to think I wouldn't live long enough to see one!

However, overall from the info provided, it does look as good as realistically we could expect at this point in Barruecopardo's restart.

Real picture (for us investors) will be greatly enhanced once the amended CFF promised in the RNS is released.

B

Last year's Full Year figures were released on 1 June 2018.

Should mean we get the 2019 Accounts in a matter of days then.............can hardly wait....

B

Heavens, with all this long service I feel like a bit of a newbie with just shy of 10 years SUPPORTING Ormonde.........along with the rest of you guys of course.

I guess the least we deserve with this kind of loyalty is a bit of an update. C'mon Ormonde.

Rgds.

B

I hear what you say - given the lead time to get to commissioning and, who knows, into production, having reached such a 'tipping point', it would as you say be nice to know we had actually commenced production (even if we still had to wait for recovery %/grades etc.
B

A month ago, I posted a bit of a rant against the treatment of PI's generally, but more specifically to Ormonde given the lack of any sort of meaningful update since goodness knows when.

I honestly did not expect to find 1 month further down the line that we still await any update on production at Barruecopardo.

Whilst its all very well for (some) posters to assume all is well 'behind the scenes', it really underscores the contempt with which PI's are held by some Corporates. We really are treated with disdain.

Saloro/Ormonde have a responsibility to their shareholders irrespective of Oaktree. Its more than time they were reminded of it.

....and as for AIM and its 'light touch' approach to Corporate governance etc. Well, it simply isn't up to it!

I expect we might eventually get an RNS .........just to tell us Barruecopardo has been mined out etc.

B

If, and I appreciate with RUR, the 'if' is bigger than normal, that EdS do make the payments outlined in tge RNS, what then...?

Rur would be debt free and provided EdS maintained profitability etc., could they then be in a position to upstream dividends ti Rur and our other JV partner? I accept that EdS have other borrowings which would likely be documented in such a way as to preclude Dividends, but its just a thought.

If nothing else, debt free Rur would be simpler to sell (most likely to another operator in Argentina fully familiar with EdS and the electricity tariff and commodity trading model used in that country. There are a couple of players expanding through acquisition who may see a strategic 'fit' etc.

And we might just get £1 for our Chilean and other assets ( assuming we still actually own them.

There might just be a pulse left in our zombie Co yet.

B