Member Info for Crazytowner

Boldlygo,

AMC is not an investment anymore, it is now a stupidly high risk gamble, some will argue it always has been.

Everybody will have a different view based upon their average price, the quantity held, their age etc. etc.

For me, with the Russian Federation now involved with the flow of funds leaving the country and the so say fair valuation out in public its time to cut Kun Manie and run as I don't see any reason for Sviblov to improve his offer and I don't believe AMC can meet the upcoming deadlines, raise any money funds or progress the deposit.

You obviously do see a good reason for him to pay more

In usual times I would agree, but I'm sure all agree, we couldn't be any further from normal.

In this instance I don't feel it is an offer, but the Russian Federation and Sviblov saying "This is the deal".

RY all but said it in his interviews.

If the Russian Federation has been involved in getting to this deal, I can't see them viewing British PIs rejecting it favourably.

Below is the RNS referencing the mine plan.

https://www.lse.co.uk/rns/AMC/kun-manie-production-licence-amendments-update-l3rbp1806m88i6g.html

If AMC miss the mine plan deadline, the Russian Federation will be able to legitimately revoke the licence.
Not hard to imagine which Russian then gets it.

There is an interview with RY where he is saying its 300k to get to the mine plan, that interview was prior to the invasion and I suspect ignored the road and power on the basis that the design would be wrapped up and funded by the Russian Federation / Far East Development Fund.
I certainly don't see them building us a road now.

From recollection the Road Design talked about for the BFS was 5-10m, we don't have that money and their is no way to get it in the foreseeable future.

The sanctions are designed to hurt Russia and make it impossible for Western companies to function there, do you believe AMC is immune to this?

Boldlygo,

Not desperate at all, my average is slightly over 1.7p and so could exit now at a loss which would be painful, but not the end of the world.

Which part of my previous post do you think is inaccurate?

Over the years you'll see the likes of TDT state the importance of competition and Sasa state "providing there is no Black Swan event", well there is none, and we have one.

Sviblov isn't sanctioned (at present) and is in his early 40s, at some point in the future he'll be wanting to do deals and raise cash outside Russia etc. etc. Defaulting on a personal guarantee would make such extremely difficult.

Roy, why do you think RY wants this voted down?
I would love to believe that to be the case and vote against the deal, but I can't find the slightest glimmer of it.

The Board are unanimously voting in favour of this deal, recommending shareholders do the same and RY has given interviews this week that explain why.
You can bet things are extremely difficult for AMC at the moment with RY putting a brave face on, unable to say just how difficult sanctions are making things.

Yes its a poor deal, but there is no appetite / competition from anyone else which is key
If the vote is rejected he may come back with a slightly improved offer, but if the Russian government won't approve anything better or he simply doesn't have access to the funds to better the offer and then develop the asset, then what?

Like many, I'd hoped the war would have been resolved by now, but it looks like its going to last a lot lot longer and sanctions are only going to increase and last year's after.

The mine plan is due in 12 months and can only begin once the TEO is approved. It includes detailed comprehensive project engineering which I think we are a long way off from (Road, power, plant, smelter, hydromet etc.).
I believe there is a huge risk to our licence both from funding and being able to achieve it in the time frame.

KM has been progressed to the point it is ready for sale and the market conditions are favourable, the invasion is at the worst possible time.

Kammy,

Suggest you do a little research.

AMC is being sold for more than it has raised from investors.

RY and the board are in the same position as shareholders having bought significantly higher than here.

Their options also won't be in the money for a while and expire next year.

The new shape won't require full time people and so would expect a significant cut in salaries and overhead. If this is not actioned then RY can be voted out at the next AGM.

Some investors will lose, some will break even and some will do well.

It's an awful deal, but it is the deal and the fact that nobody is step forward with anything better should tell you everything.

This is not about RY, it's about preserving as much capital / maximising our return from here.

Agreed Geng,

The interview was extremely clear and informative in my opinion.

AMC has managed to transfer enough cash into Russia to get to the end of next month as per RNS. This will have been an extremely difficult task considering the ever increasing sanctions.

Western companies are pulling out of Russia and field work will be extremely difficult to get signed off.

Westerners are advised against travel to Russia.

An additional level of complexity and will obstruct a more favorable offer being approved as per RNS
Completion of the Transaction requires the approval by a newly created Russian Federation government commission per Order 81 dated 1 March 2022 (which specifically addresses change of control of western held assets) and the consent of the Federal Antimonopoly Service of Russia.

AMCs legal advisor has quit

Clearly unable to raise cash in future and apparent complexities behind the deal.
Additionally, in order to move Kun-Manie into a development and production phase, significant further investment is required to be made, including significant expenditure on infrastructure and access roads and there is no guarantee that Amur will be able to source and execute financing agreements to meet this required spend given the current volatile market. This also complicated the execution of this transaction

People might want to consider that the reason behind the staged receipts is to allow the funds to flow without being stopped by sanctions.

I will be casting my Yes vote on Monday and hoping that a 2nd bidder emerges this week.

We have been told what the plan is to do with the money.

You mention failing to learn from history, well, if we use NRR as an example, it returned 25% return on capital within 9 months. From an investment perspective, this was a positive outcome delivered by the BOD

Am not desperate as believe the majority of posters / holders are sensible and understand the position AMC are in.

A few months ago we were probably looking at a substantially better return and receipt structure of which we'd have all walked away fairly content. The Ukraine invasion has changed everything and does not look like resolving anytime soon. AMC are now out of time.

As an investor, it is about protecting capital. Those saying they would rather lose the lot than fund RYs salary for the next 10 years does not make sense to me. If it was not RY, it would simply be somebody else getting paid.
In number terms, $105m, less say $5m salary over the next 10 years = $100m.

Throwing away $100m because you don't like where the $5m is going is not a good investment strategy

If people are concerned about RYs salary, vote him out at a future AGM.

With the 400 posts over the last 2 days, I am yet to hear one person suggest how this deal could be improved with the acquirer holding all the cards, AMC unable to move forward without finance and no second bidder.

AMC needs to retain cash in the business to protect the contract.

Voting no will return zero, voting yes returns $105m in a long winded process

Voting no is not burning anybody but yourself and as has already been said

If the BOD resign with this vote not passing, it will be impossible to get anybody else and in the miraculous event they could, they would cost a fortune.

If the vote does not pass, how can AMC deliver the mine plan next June when unable to raise cash or have things signed off by western companies who can't now deal with Russia.

Anybody who thinks PIs have any power here or that RY does at the negotiating table is deluded

Do you believe the receipt structure is what AMCs BOD wanted? I certainly don't.

It will be the the only way to increase the acquisition price.

The BOD have a gun to their heads, so do us PIs.

Voting no simply pulls the trigger

The idea that AMC BOD can go back to the acquirer is proposperous.
The deal is terrible and the phasing even worse.
That is how bad the situation is in Russia at the moment.

If a 2nd bidder does not materialise this week then it couldn't be clearer that in the event of a no vote we lose everything.

The BOD would likely resign, we would not be able to raise cash to fund the mine plan and we would lose the licence.

This is not the time for a protest vote, it is a time to think clearly how to get as much back as we can.

There is no room for AMC to negotiate if there isn't a 2nd bidder

From the Feb21 RNS, The Mine Plan is due 1st June 2023. I personally don't see any extensions being granted to this. So missing this would likely lose our license, making us worthless.

How much would we need to raise to achieve this and when must it occur by..... probably 10-20m and required from now. With the war ongoing and the severe sanctions we simply cant get there.

You can call whatever you want Lucando, I have always been 100% transparent with my holding and purchases here.
For clarity, it is presently circa 15m shares at an average of just over 1.7p.
A few years ago I held circa 1.5m @ an average of circa 7p but was fortunate to be in the position to add heavily in the low 1's.
I therefore get the frustration of PIs with higher averages who will lose out if this deal passes, with the adage of high risk, high reward not occurring here.

As for always supporting the BOD, that is simply not true. I have been critical of them and taken action when I felt it appropriate.

But yes, as things stand at the moment I intend to vote yes and hope that a counter bid arrives. My reasoning is as follows.

- The mine plan is due next year and I can't see how we can get to it without a sizeable cash raise, which must be practically impossible now. Missing it would likely lose our licence.

- If a counter offer does not materialize, then it's clear just how little appetite there is for our mine.

As to the future strategy of AMC, It seems a little wooly to me and so I intend to email some questions across in the next day or so.

I am extremely disappointed in the price, but believe the outcome of a no vote and no other bidders would be catastrophic.

What a stupid thing to say

There has clearly been discussions and NDAs in place for a considerable amount of time making the BOD taking shares impossible.

The BOD have done exactly what we wanted, proved us up, made us desirable and taken us to the stage where a major steps in.

Where would we be if Ukraine hadn't kicked off.... Most likely sold!

It really is a case of head done and sit tight

As an LTH the end game has always been a takeover for me and I have accumulated up and down along the way.

As far as I am concerned, the AMC BOD have got us to the position where a takeover can now occur.

Its certainly not been a pretty journey, but there are / were active suitors, so just need to wait and see what happens next

You can only sell an asset if there is a buyer.

There now appears to be one which all things being well will lead to the value / reward to shareholders