Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Your 9 informative posts will be missed kurrinz.
Batfink Twitter and Telegram are heavily agenda fuelled, it’s just biased towards the positive so people don’t like to question or hold the company to account in any way.
If you don’t like the content, join the debate and argue why people are wrong.
Hi Lee,
Thanks for your reply and for correcting me on point B. I agree you are correct that SSGI will no longer have charge over Romanian assets. The previous paragraph talks about the new deal and I'm afraid I had not spotted the subtle change in context - This is why debate is important people!
"The Transaction repays the majority of the SSGI Loan and gives the Company the ability to repay more through the RTGS$2.5 million further consideration. It should be noted that SSGI has a charge over the Company’s 50.1% interest in Ronquil.
Reducing the SSGI Loan gives the Company the ability to raise finance from other parties. It should be noted that SSGI’s charge also extends to certain of the Romanian assets. "
On the RTGS you are right that the deal is 2.5:1, but that was the point I am making. Vast will get paid 2.5m RTGS dollars regardless of the current forex rate. Today the exchange rate is roughly 3.1:1 and in a couple of months it might devalue even further. I can't see any evidence that the economy will improve, inflation is increasing and there is still a massive shortage of foreign currency.
"The consideration from SATF is US$2.5 million payable outside Zimbabwe plus *RTGS$2.5 million (being US$1 million) payable in Zimbabwe".
Anyway, technicalities aside the news is positive in the sense that the majority of the SSGI debt has been wiped out and what remains should be a bit more manageable If Vast can secure finance.
I get the idea Lee but the deal falls a bit short of what I was expecting. It fails to repay the debt, fails to remove the full charge on Romanian operations and fails to free up the company to fully secure debt financing until the remaining loan amount is repaid. The RTGS is security and cannot be used by Vast until the debt is repaid. Also the forex rate is over 3:1 usd now so Vast are getting well below the $1m they claim. Shareholders should absolutely vote to support it but I find it amazing to see so many cheerful at the prospect of selling Pickstone. Don’t get me wrong, it is an improvement from the current situation and it probably frees Vast up to get an offtake / prepayment agreement and possibly leads the way to financing Marange, but lets not kid ourselves that we aren’t destroying shareholder value in the process.
Nothing has been decided sensibly here. Vast defaulted on a creditor and had to sell it’s only profitable asset to pay back some of the debt. Lets call a spade a spade. It’s an awful deal, but Vast has few options and must proceed to survive.
Correct me if i’m wrong about this, but doesn’t the RNS still pretty much state / imply:
a) SSGI loan still outstanding
b) SSGI still has a charge on Romanian assets until loan repaid
c) It seems to imply that whilst the improved balance sheet is helpful for financing, Vast still cannot raise debt until loan repaid? No mention of the first offer of refusal clause being dropped from what I have read, unless I missed it? Plz check ...
d) Part payment is in monopoly money below the current market rate in a currency which has devalued 20% since introduction, so who knows the true value in several months / years when Vast finally pays off the loan and Vast are in receipt of the 2.5m RTGS
e) Vast has signed over Eureka and Pickstone for $2.5m hard cash and some monopoly money when Pickstone normally generates $3m profit before tax in six months, accounted for 90% revenue and Vast have invested millions into the asset. Not forgetting that sulphides would have doubled profit soon.
It says a lot about the current state of the company when the above is hailed as a success!
https://www.newsday.co.zw/2019/04/why-zims-big-mine-sale-is-failing/
TBH I suspect they will be selective which assets they reclaim but it could pose a risk. I think they are mainly after platinum assets as the government owns loads of gold mines that are not operational.
On a more positive note it might present a good opportunity for diamond exploration for those in the know :)
Well this isn't great timing. Looks like a detailed plan needs to be submitted for Eureka and Giant or whoever owns it will risk loosing the concession after April 2019.
Zimbabwe government will repossess all mining concessions lying idle in the country end of this April, Mines Minister Winston Chitando has said.
He said all companies with mining concessions have been given up to 30 April to submit detailed plans on how they are going to develop their concessions or risk losing the mining rights.
https://africanminingmarket.com/zim-govt-to-grab-all-unused-mining-concessions-end-of-april/3752/
This is great:
https://www.youtube.com/watch?v=S43WGKlQ4Gw&feature=youtu.be
Thanks for your thoughts, I’m just going off what AP has hinted at, both assets in production 3-5 months, company debt free in months with a pretty much clean balance sheet. The main issue I see is that Vast are tied on debt funding from cornerstone investor by SSGI loan terms. Also if Dallagio stake is given up and offtaker has security over Romanian assets and revenue then what will the cornerstone investor use for security?
IMO since Vast has no cash flow Mercuria will not agree to any new deal that puts their $4m at risk and will need paying off. The new offtaker also needs assets to secure the prepayment agreement against too. SSGI won’t want to be left with struggling gold assets in Zim given the political situation and will obviously want in on the diamond revenue too, so again will need paying off to allow for investment from the cornerstone investor, who will also need some collateral or equity for their risky investment. Quite a puzzle for AP.
We know that there is around $3.4m SSGI debt to pay back, plus $4m owed to Mercuria if Vast wants to release their revenue mortgage on Sinarom for a new Offtaker (or release security for a new financier). Add into that $3.5m for BP startup costs and that's at least $10m in restructuring and startup capital to clear the external debt and bring BP into production. If Vast proceeds with Marange then they will also need up to $10m more to get it into production.
So lets assume Vast sells it's 24.9% interest in Dallagio, how much could it raise?
I personally think that Pickstone Peerless possibly isn't worth as much as some others might think in the current climate (despite the Sulphide potential), as 45% of gold sales from Pickstone are paid in RTGS dollars, and the new currency has devalued 20% since it was introduced the other month. Zim also has announced a use it or loose it policy so Giant is looking a bit vulnerable if no-one is willing to spend $5m evaluating it. Ditto Eureka. Not forgetting that Eureka still has at least a year's worth of debt which needs to be paid back to SSGI from Dallaglio (assuming previous payments have been made on time from Pickstone). We also know that Vast previously sold their 50% stake in the group for only $4m USD in 2017 (see http://www.vastresourcesplc.com/news/non-convertible-debt-facility-disposal-of-non-controlling-interest-in-pickstone-peerless-gold-mine-and-giant-gold-mine-to-raise-us-8-million-30-01-2017/).
Given this, the cornerstone investor / off-taker is going to need to make up the shortfall. So does anyone have any idea on how Vast might practically achieve elimination of all debt within the company and reach production in 3-5 months time at both Marange and BP? I just don't see how Vast could possibly be bailed out without having to give up a huge chunk of equity as part of the deal.
Does anyone have any ideas or thoughts on how the balance sheet could be tidied up?
Indeed, the way I see it this tiny company has some very exciting possibilities for growth:
1. Thorny River drill results might show alluvial deposits and could be quite a decent size mine overall
2. James Campbell and Vast are pressing ahead with the marange diamonds. Could be worth millions in revenue to BOD
3. Maibwe prospectus could lead to a new JV partner, and Maibwe is rumored to be massive
Three very exciting prospects. Revenue from Thorny River should be pretty much nailed on once license arrives which easily justifies the marketcap. $2-7m per year based on initial estimates, although the drill results might upgrade this estimate. It's really difficult to buy shares here so get in now if you want to because it is often very hard to enter / exit positions.
Excellent Interview:
https://www.youtube.com/watch?v=bHSetSxA0Jw&t=248s
Newsflow soon:
1. Conclusion of drilling programme at Thorny River
2. Thorny River section 20 bulk sampling license
3. BCL Prospectus
Isas I am afraid I was taking the piss out of the CEO who has a history of misleading shareholders on timelines. The company is insolvent so who knows what will happen, but IMO the RNS today was not a step in the right direction.
All I would say is that if you are willing to risk your shirt here then make sure you have a few spares.
Time scale? The restructuring is imminent.
Cheers Tiger!
It sounds like the license news could come soon. I'm excited to hear about the Maibwe JV most of all. Clearly the BCL liquidator has agreed to find a buyer for the diamond JV and the new prospectus should be snapped up quickly given the potential of the deposit. The Botswana government recently decided to privatise it in Parliament so with a bit of luck the prospectus should be tempting. Presumably they will do something like a sealed bid system and perhaps BOD might even bid for it!
So the way I see it, BOD has pretty much nailed on revenue from Thorny River (assuming license granted) and two outs to potentiall huge diamond deposits (Marange and Maibwe). That's before you even start looking at Sunland Minerals and Free State which also look interesting.
The company is in excellent financial health and we have a super competant MD so I think it is a fantastic time to own BOD shares.
Listen in @ 25:55
**************************************/articles/live-company-group-bigblu-broadband-rockfire-resources-botswana-diamonds-and-malcy-d1e7825/
Lots of news to come this year :)