MDA30 Jan 2024 10:01
My understanding is that the "few" outstanding MDA points under negotiation are still fx, foreign accounts and royalties. Below are the main provisions re those points Globe got in March. We're rather caught in the middle and suffering as MKA shareholders, and Malawi are risking being seen as uninvestable by delaying. Definitely time for a breakthrough from everyone's p.o.v.
It'll be hard to depart radically from what Globe got despite talk of changing the law around fx, and there'll be devil in the detail. But they've surely had time enough to sort it all now.
The good news imo is that MKA's MDA is the last big piece in our jigsaw so things should move quickly when we get it. Globe's was an early piece in theirs, before much of the feasibility work, and project funding.
• Globe is required to comply with all applicable foreign currency laws but is permitted to maintain
one or more foreign currency accounts outside of Malawi to meet its foreign currency obligations to
the initial Project Lender for a period of 7 years after the establishment of the relevant account or
the date on which the Company has discharged all its obligations to the initial Project Lender. These
obligations include (but are not limited to) the payment of interest and principal to the Project
Lender, the payment of mandatory pre-payments to the Project Lender, and the establishment and
maintenance of reserves as required by the Project Lender.
• The Malawi Government is to receive, at no cost, a non-diluting 10% equity interest in the Project,
with an option to acquire up to a further 10% equity interest (Equity Option) upon completion of
the construction, commissioning, and start-up of operations at the Project as approved by the
Project Lender. The Equity Option is a fully contributory interest and is capable of being diluted if
the Government does not meet any call by Globe for additional equity funding.
• The Malawi Government will receive a statutory royalty of 5% of all revenue earned from the mining
and processing of ore at the Project. The Kanyika community will receive a royalty of 0.45% as
prescribed under the Act.
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