RE: Explanation2 Aug 2018 15:55
I too sent an e-mail to the company asking for clarification on certain issues, and was invited to call Sean Wade to discuss my questions. We had a chat for 20 minutes or so and I'll attempt to summarise the main points discussed below.
Bolsa Listing:
BKY were very keen to obtain this listing to raise their profile and attract investment in Spain and needed the listing on the main LSE to facilitate this. There was a decision made not to issue new share capital for the Bolsa launch which resulted in a shortage of shares available on the new market.
Arbitrage between the three markets, Bolsa, LSE and ASX, is not a straightforward process so demand considerably outstripped supply, hence the rapid rise in the Spanish SP.
Brokers have been buying BKY shares on the ASX with a view to converting them to Euros to allow listing on the Bolsa, but this process takes time. Sean expects the markets to head towards parity within the next few weeks once these shares become available to the MMs on the Bolsa. In retrospect, he says, maybe issuing new capital for the launch would have avoided this shortfall in demand and the resulting SP anomaly.
Tenements Outstanding:
The nine tenements still outstanding are of interest to BKY purely as areas that the company might like to explore in the future. They do not affect in any way progress of construction of the mine.
Permitting:
The critical permit for BKY is the Urbanisation license. This permit allows construction to start at the site.
The authorities have requested BKY report back on a couple of outstanding issues, which Sean was unable to disclose. He stated that if any issues were highly material to the progress of the project he would be obliged to issue and RNS due to the price sensitive nature. This is not the case with the issues in hand.
The Urbanisation permit is ultimately required to be signed off by the local Mayor. The Mayor is a staunch supporter of the BKY project and is very keen to see the creation of new jobs and revitalisation of the local economy. No problems there.
The delays in the bureaucratic processes have not been helped by austerity measures imposed in Spain. Council cutbacks have led to there simply not being suitably qualified people available to fill vacant senior posts, as in this region.
Once the Urbanisation License has been obtained, the CSN II license will be the next priority. It also then becomes much easier to obtain the remaining outstanding permits.
Timescale:
The project is fully funded and in a best case scenario remains on track as per the prospectus. The worst case scenario is that there may be difficulties which cause further delays. Sean however did not rule out the possibility of a further modest cash raise in future, possibly targeted in Spain due to demand, but stated that there are no plans for this at present. There are also plans to roll out Investors' Presentations in Spain in September/ October.
Sign In
Follow the stocks
