Member Info for Broomfielder

I've been around the block more than a few times, but I never understood the logic of Sterling Trust's initial investment in Rur (particularly the scale of its shareholding).
To my mind, the shareholding level implied Rur was effectively a sub co of ST - hardly the normal approach of an investment co.
Their approach since Rur really hit difficult times has just perplexed me further. I can't fathom what the 'owners' of ST hope to achieve through their holding (in Rur) going forward. Watching the erosion of Rur's income through excessive Overheads cannot benefit anyone (apart from the recipients).
ST's holding is however the biggest barrier to any possible takeover of Rur. Its a conundrum that looks insoluble to me.

B

Yes, perhaps the CVA route is the only option - I am certainly no expert on these arrangements, nor the indicative costs of managing one but perhaps there are others better placed to offer views on these and other relevant factors.

I did however think a Company had to be insolvent as a pre-requisite and provided EdS maintain their loan repayments allowing Rur the pay off their own short term debt, I cant see they would satisfy that criterion.

I am happy to explore options here, but equally I am not keen at throwing too much more cash at what seems increasingly a lost cause. Apologies to all.

B

Quite a bit of activity today (well for Rur anyway).

SP further down the slippery slope toward zero - the amount of my shares wouldn't influence anyone, but as GFD says, we need to do something.

B

Now I know that our American funders dont give a whatsit about the wider shareholders in Ormonde (nor indeed for anyone bar themselves), but I would have thought that our investee Company had the b***s to keep their own shareholders in the picture (despite Oaktree or whoever calling the shots).
Certainly its a long time since the late Kerr Anderson was at the helm...... he would have welcomed a chat with any any PI looking for an update. Fast forward to today.......well forget it if you are a PI.
What a pathetic advert AIM really has become for the small investor.

B

Appreciate your efforts bbr to sustain some interest here for the troops.
Trouble is, we PI's are trying to survive in a news vacuum while our BoD draw down some very hefty recompense for their sterling efforts (sic).
Rur simply serves to highlight for me at least, that this, along with a few of my other AIM investments, sum up why it really isn't worth the hassle to invest in AIM Cos. You might as well simply throw your money down the drain.
And the UK used to pride itself in its financial markets etc - AIM is a joke and a fairly sick one at that.
Stay well clear would be my (somewhat belated) advice.

B

I think we all got a bit excited having had 4 updates in as many weeks since the first appeared on 28 Dec.

Surely we dont have to wait until the Annual Results are announced in June however?

B

.....think its worth checking ebay?

B

It was always a fear I had that Oaktree could well mothball Barruecopardo until the raw materials delivered the correct IRR for tgeir investment. However having spent the Capex to get the mine to a production state, my fears were allayed somewhat.

Nonetheless, given PI's largely have to exist in something of a news vacuum, its hardly surprising when news is supposedly due, we all get nervous when the silence continues. Unfortunately, no news, especially in AIM, is rarely good news in the end.

Lets hope its different this time and linked to Brookfield's just revisiting the numbers.

And yes, I agree Catchingpigeons, the continuing share sales are unsettling particularly in the absence of credible news with Ormonde/Saloro being so close to production.

B

Makes you think just how positive it would be viewed by the Market IF our BoD members were to buy even a few.......surely on their kind of income, they could spare a few thousand.....
....even if they only think about the PR, if not their shareholders. They might just consider themselves as pro-active.
Rgds.

B

We PI's are of course never going to be privy to the (outcome following the) review of assets which will have taken place as part of the wider DD undertaken in connection with Brookfield's 'acquisition' of Oaktree.

Thus, we can but await news through the usual sources about our Barruecopardo asset. Indications in the media suggest that Brookfield are looking to 'grow' the assets under management, so it may suggest they will continue to develop 'our' mine both by extraction and by proving up the recoverable Resource levels as planned. In the scheme of things, our tungsten project is pretty small beer to Brookfield so we perhaps shouldn't expect too much too quickly.

Failing that, IMO, the only other option would be outright sale to a major player, be it Almonty or otherwise. In the short term, they would still however want to demonstrate the recovery rates and profitability of the current production levels as well as proving up the recoverable increased Resource levels we all believe exist at Barruecopardo.

It simply wouldn't make sense to do otherwise unless of course they get a really aggressive unsolicited offer.

Unfortunately with Ormonde's minority shareholding, our hand could be forced but lets hope its only for a truly stellar offer.

Meantime, we just want to hear production is on track, costs are within budget, recovery rates and mineral % are better than forecast etc. That would do nicely.

And then there really would be tangible grounds for take-off (of the SP).

B

Last month's belated RNS confirmed, amongst other things, that ' following some slippage in the schedule, commissioning has now prpgressed to commencement of ore processing and this 'hot commissioning' will continue during the remainder of February and into March'.

Well, we are already well into March, so is an update now too much to ask?

Most PI's are well aware Oaktree are calling the shots here and are not too concerned with the wider market. Ormonde via their Sub Co, Saloro, are however a Public Co and they shouldn't need reminded of their obligations to their own shareholders.

C'mon Ormonde, give us an update on progress - Oaktree, in spite of their investment, couldn't operate a mine to save themselves, so Ormonde despite its minority shareholding, has significant power within this lop-sided JV. Its time tgey exercised it.

B

A moot point GFD - Exchange risk as part of the wider geo-political risks underlines the general uncertainty that surrounds Rur and its field of operations.

If there are ongoing exchange controls restricting movements of capital, this could rather kill off any realistic prospects of any significant repatriation of capital to Rur shareholders (apart from those domiciled in Argentina). I know there were such restrictions prior to the IMF's involvement, but I have been unable to clarify if these have now now been removed.

B

Good find Optimist.

Central Puerto are the largest private sector power generating Co in Argentina, they are profitable, expanding both through organic growth and by acquisition etc etc.

Now they should of course be well known to our BoD ...........but are they?

We can only guess.

B

No GFD, I wasn't referring to PE!

However I'm sure there is a Don Quixote out there with Rur's name tattooed on himself...boldly.

B

I think most of us recognise that there are a number of potentially very significant barriers in Rur's road to redemption, but there are is also a number of factors lining up up quite nicely which provides the raw material etc........now, all we need is the spark to ignite etc.

Yes, we do exhibit many of the features of a potential recovery stock.

Now we also know that this spark is not going to come from our BoD but there is surely someone out there (who preferably speaks Spanish) that can galvanize this Company?

Is this too much to ask?

Yes, probably.........!

B

Onit - I agree that as PI's, a key 'positive' we often look for is some level of tangible investment by the BoD beyond the much vaunted (by Directors that is) 'sweat equity'. Perfectly understandable.

However, its never going to happen with Rur - I think its safe to say our current BoD see themselves akin to quasi Administrators justifying (to themselves at least), that shareholder value can be restored through break up of Rur. That can be achieved through asset sales, debt repayment or even outright sale to a third party etc but an ongoing trade-out is simply not within their acumen.

Rur should not be viewed IMO as a long term 'going concern' but one which is perceived to have a NAV considerably higher than book particularly if impairments can be reduced. Its that value difference thats the key and not of course reflected in the current SP given the considerable doubt (shared by the Market) that this additional value may not be unlocked.

Optimist has touched on this subject in previous posts and while many lth's will have themselves varying levels of sceptimism on what can ultimately be achieved in a disposal/break up situation, if I'm honest, its only that hope which has kept me from selling up long ago and consigning yet another of my AIM investments to the rubbish bin.

Rgds.

B

Optimist - even at impaired levels, the value of our assets greatly exceeded any debt extant. Had we sold either of these 'main' assets, Rur could easily have repaid any debt ensuring the security was then discharged.

It might make it cleaner or simpler to sell assets once any security/debt has been removed, but their existence is no barrier to asset sales.

As for the proceeds of sale NOT coming to shareholders, apologies that perhaps is down to my clumsy wording.

I ALWAYS worry when the crown jewels of any company I am invested in are sold. Controlling where the cash goes is outside of our ability and relying on others to do what they say simply makes me uneasy.

Rgds.

B

I do hope you are right Optimist - they have apparently been trying to dispose of some of these assets for quite a considerable time.

The EdS asset should be particularly attractive but this will also be highly dependent on a view being taken of the sustainability of future cashflow from the power generated.

Now I concede that I am simply not close enough to the details here.

And that goes from the top down, ie the liquidity of Argentina (sovereign risk) as bolstered by IMF support, the budgets of the relevant Energy Ministry and the terms of its contractual obligations to EdS, the precise role of the non profit making CAMMESA and its US$6.4m loan facilities granted/security taken in respect of the monies advanced for the planned maintenance of the damaged turbine etc along with clarity on the whereabouts of the US$2.5m insurance settlement etc which presumably covered the costs of the (separate) turbine damage.

Again, a lot more clarity might help.

I along with others have long despaired over achieving a good price for any assets sold. However, should we manage to dispose of say Rur's interests in EdS (at fair value), I think we should also worry about whether shareholders actually see any cash.

B

Assuming (ie hoping) Rur become debt free at some point in the not too distant future (provided EdS maintain their repayments), I am guessing that the barrier to an eventual takeover of Rur will simply rest on what deal can be struck with the Administrator / largest shareholders of Sterling Trust, our 'controlling' shareholder/investor.

Nothing new there perhaps, but time must be costing these parties money the longer the current impasse goes on and, of course, as has been pointed out many times already on this bb, Rur itself has a significant cash burn to meet our still absurdly high Admin costs. So time is sharply reducing everyone's asset values if nothing continues to happen.

Surely therefore there has to be a pivotal moment fairly soon where the inevitable horse trade needs to be done allowing a party to takeover Rur, even if it is only to asset strip and thereafter reverse another operation into the resultant 'shell'?

I am not necessarily advocating such a scenario, but I can't help but think its inevitable....one day. Its beginning to look the only way ANY value is going to be released from Rur unless it can be wound up by another means.

B

Been a lth here for many years but have to confess I am becoming increasingly doubtful that even the mine opening etc will have any material (ie positive) impact on the SP.

I agree, as others have commented, AIM really is a law unto itself and always more difficult to gauge how any share will perform in a certain set of circumstances. Especially when there is no shortage of risk in the world today.

However, since the finance package was first agreed with Oaktree, we have witnessed a fairly substantial seller(s) regularly disposing of stock. Now that pattern emerged even when the SP was driven down to c1p so and continually thereafter as it struggled to get anywhere near the halcyon days of double figures (ok, we owned all of the mine back then but we still didn't have the money to develop it).

So whoever is selling dont appear to be too concerned with profit and appear still active as the SP once again heads South.

There again, it might all be just be paranoia on my part!

B