Member Info for Broomfielder

A feature of this Co's SP since it reached its all time low some time ago has been the persistant chunky sales which I think has restrained the upward trajectory seen in the SP over the past year or so, despite the considerable progress in the Project as it moves toward production.

Further such selling is again in evidence this morning although thus far the SP has thankfully remained unchanged. Whether this pattern will change once we are in production remains to be seen.

B

In April this year, we were advised that EdS, owned 50% of course by RUR, had cUS$2.5m held in escrow pending transfer in settlement of a (business interruption) insurance claim.

Now, we have never been advised just how much the repair to EdS' damaged turbines are estimated to cost, but as 50% shareholders in a Co with that sort of cash, investors should know what is happening/has happened to these funds before they also disappear.

B

Thanks guys for your views on the recently announced Project delay.

To be honest I was surprised there hadn't already been issues on a Project of this scale which would have given rise to a delay of some sort. It was the 'lateness of the hour' coupled with the very recent assurances that budgets and timescales had not slipped made me suspicious here. That and the fact that the Oaktrees of this world will do anything to make their numbers work.

We should be getting an Interim statement in the next week or so but I don't expect to see much detail here. They will be on a Consolidated basis so we will not see a breakdown of the debt structure embedded in Saloro's Accounts. I am keen to how they have utilised the Project funding. I know the initial debt/equity split, but did we ever get the full terms of the debt element?

Apologies if I have missed this, but I do not recall the Interest rate nor indeed the basis of its repayment etc or indeed if its all Senior debt etc. Project finance is not usually Plain vanilla equity and Senior debt. Also, Ormonde obtained a working capital loan of US$1.5m from Oaktree until production income was generated and it will be interesting to how much has been used etc.

B

This 'delay' in commissioning couldn't in some way be linked to Tungsten prices falling back recently?

Oaktree have of course already delayed this project when Metal prices were much lower and the cynic in me thinks this could be linked to the term of the Offtake Agreement and its tie-in to prevailing raw material prices. I for one, haven't seen the precise terms of the Offtake Agree with Noble which still seems to be in existence.

On the other hand, I may be talking rubbish..... Just seems surprising a delay has arisen given very recent assurances etc.

B

With mine commissioning anticipated around the middle of next month, it wont be long before we have some real 'numbers' to play with and start to establish with a bit more clarity, how much Ormonde's 30% holding is going to generate from known Reserves etc.

Also, normally Management Contracts are worded to incentivise the operator/manager to improve on forecast returns be they be lower costs, higher profitabilty, improved cash flow etc.

I had actually forgotten our Funders had actually done the opposite - effectively witholding 25% of the Annual fee due to Saloro/Ormonde until there are 2 quarters of positive cash flow from the Project.

Now most Projects of this sort of scale have some initial teething problems, but fingers crossed, hopefully everyone (yes, even Oaktree) will soon be earning some real cash here which of course will be a real boost to the SP.

B

Appreciate your digging UTVF - I am guessing that much as we PI's think otherwise, this is Oaktree's show, and so long as they know all the detail, they see little need to update the wider market unless they feel absolutely compelled to do so.

And as for any Offtake Agreement (or lack of etc), they appear to be happy to wing it and rely on the spot market price prevailing once production cranks up. I guess its their call and Ormonde (via Saloro) and therefore us Pi's are merely minority shareholders here.

Personally, I would have preferred a % percentage at least to be forward sold but perhaps they couldn't get the terms they wanted or find a suitable counter party (assuming the Contract with Noble fell away).

B

I think you could well be right UTVF as this month's updated Corporate Presentation is strangely silent on the question of any Offtake Agreements existing.

The cancellation of any previously announced Agreement you would have thought merited an RNS (I cannot recall there being one) as these can be significant in de-risking the Project.

Clearly the terms of any Agreement and the quality of the counter party are both significant here but I would have thought at least a % of total output should be forward sold.

B

Thanks Bizana - clearly I'm still struggling with this site's layout (.....and it aint complicated).

B

I'm having difficulty locating the last report from Davy & co to establish the APT price used, the IRR and the resultant Projected SP. Can anyone help?

I am assuming that the offtake agreement with Noble is not fixed as far as price is concerned, but linked to an average of prevailing raw mat prices at the time etc.

Was hoping Davy would update their last Report in any case before production starts next month. We have a life of mine at 9 years based on open pit extraction, but we all hope the additional potential reserves will move this world class mine at Barruecopardo into the stratosphere.

We may only have 30% interest in B'copardo but a refreshed Davy report should confirm the forecast SP to be at least 15-20p I would have thought.

B

Appears to be some sustained buying with SP showing up 8% thus far..

Lets hope our resident seller(s) don't appear before close.

B

If you believe the BoD are lying to shareholders by means of false information contained within an RNS, then you (ie we) have our prima facie evidence of criminal actions (proving this may be another matter).

I am not in disagreement with you, but the point I was trying to make (and failing) was that within such a specialised segment, RUR will be known to the very players whom you would have thought would be more than happy to buy our assets at knockdown prices. Unless of course these parties are being dissuaded but i would think that very unlikely.

So whilst active marketing may well flush out a potential buyer, with such specialised assets, its less likely than in a more general business.

Thats the fear I have as I has expected more opportunistic buyers appearing irrespective of whether or not our BoD were doing nothing to attract them.

I think most lth's including myself share your frustrations here - after all, we have all lost money to varying extents - but naivete is not something most of us will suffer from.

B

In or out of Administration, it has puzzled me somewhat that there appears to be very little demand (other than from our Nemesis) for Rur's various assets. When we struggled to obtain even very expensive short term debt in recent years, I always expected a predatory or oppertunistic offer. None appeared suggesting very soft demand at best.

Hopefully that would change with wider marketing, but lets be honest, the players in this specialist sector will know all about RUR.

I recall the Birdsong loan and yes, just one of many events that straddle the boundary of illegality (at the very least in terms of conflicts of interest etc.), we have witnessed in RUR's recent history.

IMO, however, it pales beside the abhorrent and wholly unjustified award made in the Hague.

B

Whilst I don't disagree with you gfd, I cannot help but think the Administration of RUR would activate PE's Plan B takeover at knockdown prices.

If he rocks up with some 'low ball' offers (and lets assume no other party appears), surely the Administrators could argue that provided they have taken adequate steps to market the assets, they are duty bound to accept?
They are not Receivers, so cannot trade on indefinitely, particularly at a loss which RUR would be doing with all the baggage in terms cost that any winding up process brings.

Don't get me wrong, I want to see the current debacle resolved, but ever since the unjustifiable and morally bankrupt decision from the Hague on the theft of RUR's Bolivian assets, I have a rather jaundiced view of many Corporate (and other) legal processes. And that would certainly apply to specialised use assets located in South America......all I see are turbo driven costs and expenses with little real action.

As far as Sterling Trust are concerned, perhaps the embedded Director is keeping the Administrator and their shareholders fully in the picture. If he is simply reporting inaction on the part of our BoD, it doesn't move things forward a lot. Yet more window dressing.

Increasingly RUR is looking like yet another AIM co where the PI's get truly shafted.

B

Whilst the Admin route may yet prove the only way to bring this drip by drip erosion of shareholder value, PI's cannot control the actions of those appointed. I suppose at least the legalities covering Administrators may be tighter than those covering Directors - there isn't any legal barrier to them sitting on their hands whilst barely doing the bookkeeping to document their incompetence.
Rurelec have effectively been in de facto Administration for some time, so perhaps we now have to formalise it - our Co really doesn't trade and 'operates' only via its few remaining investments. Our problem will not be helped by the Administration of Sterling Trust and the need to have their involvement if not tacit agreement.
From my limited perspective, they don't appear to be a great advert for Administrators either but thats perhaps unfair.
However, that really is the problem for RUR shareholders IMO. We don't need 'bookkeepers' who cannot operate the Co, we need someone with leadership, guile and know how to drive a partnership with a significant player who operates in Argentina etc to maximise shareholder value.
.............ok, rant over.
B

Hi bbr/ G or S...........you might just be right about PE.

SP now up over 100% on over 2m share trades. Could this be the final chapter involving the Admin of Sterling Trust selling up?

After all, in the past, PE has been shown to be the only 'show in town' when it comes to RUR.

Best of luck all.......I do think lth's here deserve some after all this time.

B

Now just when did the SP ever show (thus far anyway), an intra day rise of 50% irrespective of any news and the fact the it has been trashed to its 0.50 - 0.60p levels.

Guess there must be something afoot here...............

B

Excellent news you seem to have fully recovered BB.

I appreciate your views and well structured input so often a feature over on III. Im sure some of the other excellent contributors can hopefully augment the many well informed contributors here on LSE which might just help PI's even in a small way going forward.

As to the current SP, I agree that its recent regression is slightly puzzling, despite APT prices holding up.

Whether the current spat between US and China is unsettling investors in miners more than those investing directly in (certain) metals could be a factor, or perhaps the lack of revised detailed financial projections hasn't helped either as we approach commissioning.

One aspect has however always troubled me, is the persistent and substantial seller(s) into every rise in the SP since it hit its low point in 2016. This wasn't enough to halt the recent increases, but since volumes have slipped back, the sales have taken their toll. Common enough scenario in many shares i know, but with Ormonde most purchases tend to be smaller/odd amounts etc more akin to PI purchases whereas so many sales are chunky, round amounts and regularly timed.

No RNS appears to indicate a change at reported levels, but it does nevertheless point to a larger player reducing their holding. Either that, or someone really knows how to play this share - I mean selling started when the SP was less than 2p and its difficult to understand the rationale at these sort of levels particularly as we all hope realistically that the SP might just achieve Davy's projected double digits by the end of 2018 / start of 2019.

B

With the Co now approaching break-even, Investors are reacting to the proof emerging that not only do Cpx have futuristic products (and obvious potential etc), they are now delivering commercial viability. The awaited breakthrough in the contract negotiations with a major player will now turbo boost the SP, as not only will the business model be deliverable and profitable, but we are likely to finally become a realistic target for takeover once we have the contractual income and thus move beyond the 'potential' tag. This may not happen this week/this month, but it is clear from the RNS we are very much in the home straight in terms of transformative agreements being signed. That is simply bound to attract a potential buyer and its only timing IMO that will then be the issue once the first major deal is signed off.

Wow, thanks guys for that 'active' exchange of views. I'm a refugee from III and the mess they have made of their BB, so apologies for gatecrashing here. A discounted cash flow and the resultant NPV (subject to whatever discount rate you are using etc), are of course the basic tools used to evaluate your risk adjusted return on capital employed at day 1 when of course the return will be effected over a number of years. The problem here as I see it, is the paucity of information released by Ormonde into the public domain. To my knowledge we have never been privy to the precise detail of the project funding arrangement with Oaktree other than the bald, Heads of Terms format on their website and various past RNS'. The current SP will reflect Investors views on the project. On current data, It has a 10 year LoM based on current proven resource levels albeit with the expectation that the Resource and the LoM will be considerably extended but this has still to be PROVEN. Investors can of course take a view on this, but the VALUE of the existing Resource will place nominal, if any value on this. I originally invested on the basis the payback was quick on proven Resource but the prospect of further Reserves was the cherry on top. I'm struggling to retrieve Davy's recent doc on future SP etc but until we get all the necessary info., trying to accurately determine future value is even more of a lottery than it usually is. For example, do we know exactly what the terms Noble's 5 year offtake agreement is And how it is linked to the sharply improved Tungsten price now seen (in contrast to the price when the Agreement was first signed etc). Now with Mine commissioning expected later this year, wouldn't it be welcome were Ormonde to provide updated cash flows based on the data as as 2018? B