Member Info for ceejay101

My understanding is that the free carry results in board representation which is both percentage and insights

@L0ngterm they already get all of that from the free carry representing the government

If I look at the options we have

Amicable

1. JV renegotiation - funding stack reprioritisation

2. Agreed purchase of elevras earn in

3. Agreed elevra lose earn-in (funding shortfall)

Hostile

4. Forced Dilution of elevra earn in

5. Litigation

Other

6. Takeover

I'm sure there are variations but not sure there are any other significant ones.

@L0ngterm why is MIIF committing any money in the first place? They a look at their website, it has their vision, mission and objectives. If you look at it from that perspective there is little difference to them whether they take equity or otherwise. Its not in their vision, mission or objectives to dilute partners.

The starting point for all parties will be a workable funding solution first.

I did wonder whether MIIF might pay part of elevras commitment for some of the earn in. I reckon this is complicated as it would open up discussions on valuation pre fid. It would also openly put a price tag on Atlantic.

This leads me back to what is palatable and the only game in town that can be expedited compared to other options.. which is MIIF using their funding as debt for interest (not equity) and they are prioritised in the funding stack. This gives all parties certainty post JV renegotiation, spreads out elevra funding and would immediately open the path to FID. It is the cleanest way forward.

All other options result in dilution and/or arbitration which will be long. The language in the rns points to amicable discussions, ie. JV approval so not going over the head of elevra.

I forgot to mention that I suspect most of this is informally agreed and that the governance controls and things like funding tranches for various stages of development need agreement.

These discussions would have been initiated prior to ratification and accelerated with ratification which is why the silence has held out

My view is that Elevra are the blocker.

What do they want? I doubt they want to lose their earn in or offtake so what do they want? Mining is capitally intensive and companies would continuously review their portfolio and earmark funds for investment.

I believe elevra are pushing for MIIF to be higher up the capital stack. This still keeps elevra on the hook for 70m plus 50% but it just pushes their funding lower down the capital stack and spreads out their funding in a more digestable way. All this talk of dilution and arbitration are a way of. There is nothing in the rns to suggest that, rather pathway to funding.

@EarEyeAm - i mention that the lack of an optimisation makes it difficult for bidders to know true value as opposed to prospective bidders needing to see the optimisation to bid.

Let me give an analogy. I have an intention to sell a house. You live nearby so you have an idea how much the house is worth based on market prices. But i have done upgrades like an extension and a loft conversion, maybe even an underground basement that you are not aware of. You can bid at any time without seeing the property, but surely it is in your interest to see it advertised. Otherwise the bid you put in is misleading and potentially opportunistic.

The point i made is that the JV being renegotiated will block a bid for the moment? I'd be interested if you can point to something in the RNS that suggests bids are coming through, or even early stage? The focus from what i read in the RNS was moving this to resolve the funding

@Not2sure - if you look back to the RNS from 2023, it mentions contributing interest. This can be treated as receiving some benefit (ie. interest or otherwise) without necessarily receiving equity. Perhaps it is why Elevra has pushed on this, and it would be in our interest also.

@Not2sure - why does MIIF need to be on the share register with 10%? Their objectives are on their own website and are about maximising income due to Ghana and monetizing income... not having shares in companies.

Separate to that, Ghana already has a 10% free carry so the equity is less important to MIIF if they want to see the mine proceed.

There is no mention of the technical work from the optimisation being disputed. Discussions are now all about moving straight from Ratification as the last milestone straight through to FID. There will be no bids yet as firms won't risk it with JV negotiations being open and the company has c*ck blocked everyone with focus on project funding. The optimisation remaining private makes it difficult for bidders to know a realistic base case for a bid. The warrants with Ghana pension fund can expire, its not ideal, but the focus is progression is to FID rather than moving too early.

When we do get the optimisation it will be tied in with the FID and JV realignment with MIIF taking on debt (repayable loan) ahead of Elevras $70m, with a clear view of phased payments from Elevra. The rerate will be massive! No bids pre-FID on a lower NPV ratio.

I said yesterday that i find the JV workings fascinating and this one day will be a case study.

This is the first RNS we've have since ratification which tells us that something is going on in the background. Atlantic have known that funding would be an issue so i wouldnt be surprised if JV funding discussions have been going on a while and not just since ratification.

Looking at the RNS it suggests to me that Altantic are looking more towards the pathway to FID rather than just issuing out the optimisation and clouding the economics with the financing of the project. Anyone else notice that MIIF wasn't even mentioned which suggests they are all discussions. Perhaps the unlock might be MIIF funding as debt with fixed interest ahead of Elevra or MIIF funding the optimisation work.

I've been investing on and off for about 20 years. By far my favourite sectors are oil &gas and mining. Ive a decent understanding of financials and an intermediate level understanding of mining. One thing I've found fascinating with Altantic is the joint venture and how it is/will play out. One day we might look back on this as a case study.

The optimisation was fully funded by Atlantic and so elevra cannot hold it back. My thinking is that the situation would be different if it was joint funded, but that is now a moot point.

Atlantic as the operator own the journey and destination of travel. Elevra have the purse strings. They can frustrate the process by saying they won't pay and bide time which is why we have diluted to get bridge funding. Atlantic can issue the FID but it is worthless without funding in place. That is why the next step is to demonstrate to elevra we can progress to funding and can dilute them if they don't put up.

The quarterly is when this will happen.

I've always worked on the basis that the JV has to approve the optimisation before release and that Elevra are blocking it.

It's just been pointed out to me that Atlantic fully funded the optimisation. We own the IP and that it can be released without elevra if there is something fundamentally updating the economics, e.g. lower aisc or higher nav. Could it be that the board pre-empted this?

Elevra owned the ewoyaa story last week, wanted to show delays and waiting for improved market conditions with the delay to renegotiate the JV in their favour.

Next week will get interesting. Atlantic has their turn to show improved economics, money in the bank, MIIF funding to be signed off and a path to production.

What do our friends at elevra see a JV restructure as?

Reduced capex with reduced earn in and a more robust discussion about offtake?

I'm still wondering if the board have a plan to get to 22p in the next 2 weeks. Surely someone on the board must have done some calculations or worked through some assumptions.

@L0ngterm - I'm not sure if you are suggesting that the optimisation and the JV restructure are two independent issues?

@L0ngterm - my obsession with the optimisation is how it unlocks progress or holds up the move to FID. Actually my obsession is with how the share price moves as a result as i want it to be higher than where it is now.

Where have Elevra stated it is blocked, they haven't explicitly! What they have said is "Not equitable... great relationship with Alantic folk... continuing to work through on that...recast JV ..." which is code for they are stalling right now as cash calls will start quickly. The places they can slow down the game are on the optimisation and the FID.

In the same way, i dont expect Atlantic to directly say next week that Elevra aren't playing ball but rather that funding alternatives are under review.

4 years ago we traded at 50p with Spod at double the current price. Obviously margins increase at higher prices, but factor in ratification and this price looks silly.

The market views this as not getting started any time soon due to Elevra funding unless we start getting diluted. I'm expecting the board to be bullish next week and show a path to production even if the optimisation doesn't receive JV blessing. I reckon there are two RNS versions in draft, one with the optimisation referenced and one referring back to the DFS and that discussions with Elevra are taking place over the weekend.

The Ghana pension fund warrants expire in the next 2 weeks, it would be a good sign if the board can show their alignment with the share price.