Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
At the time of the AGM, not withstanding the 'money message stall', there was no real certainty about Providence being able to use any of its SELs beyond the likely change of Government in February or March 2020. The 'leave it in the ground' campaign has been so broadly (if absent-mindedly) supported it is bound to form some part of the next Irish Programme for Government. Although we will not see the detail for 4 to 6 weeks, the Taoiseach's initiative in announcing a version of it means that he has achieved the overall objective of the climate emergency campaign, without challenging the existing licences. This is significant certainty, compared to previously. The Standard Exploration Licences have existing requirements of having the finances available to explore thoroughly and of making progress with drilling within the timeframe of the licence, so really the legislative uncertainty is off the table from Providence's point of view. They just need to get on and find a financial solution to drill .
Everyone's doing their best to help them out here . . .
Almost every oil share I have checked today is up or substantially up . . . except Providence. A consistent sentiment!
You have to admire the Irish Times conversion of $9 million to €8.14 billion. Surely APEC will lash the money over now, when they see the return they are getting! As the Chief Exec said . . . "incredulous"! (Maybe the Irish Times just know we need something to smile about!)
The AGM was very well attended, but as the company's situation has become even more acute, the opportunity for realistic questions and discussion is neutered since the 'Climate Emergency Campaigners' are in the room. It makes no sense whatsoever to ask the challenging questions about the Providence's tactics and approach to problem solving, because it just exposes the weaknesses in front of people dedicated to bringing the company's model down. In a way, (on reflection though it did not seem so at the time!) the speech from the gentleman about having energy independence so as to not being beholden to the tyrranical middle-eastern states, and the child-labour exploited in the electric car supply chain, was kindof useful. At least it wasn't exposing yet another flaw in the Providence business model. The Chairman and Chief Exec communicated competently, but they are operating from a position of almost no credibility. At one point the Chief Exec said 'I know the situation with the funding (from APEC) is incredulous' . . . He's an educated guy and I did wonder if he had chosen his words carefully, or had it just come out that way? Afterall, incredulous (in this mis-use) means 'unable to believe'. Unable to believe because it is just not believable. I found it to be a fairly emotional morning because overall I'm a fan of this little company and what it is trying to do. I also have considerable skin in it, not painlessly (unlike the Exec). But the tide has turned against this type of venture in Europe. I have said before if there is not a drill, or almost a drill, in Barryroe by the time of the new Irish Government formation in February or March 2020, this little company has no assets. It just felt, after many AGMs, like this was probably the final one . . .
I have called Providence to ask them to clarify whether this is a typo or not (no point in using up any more of your afternoon trying to figure . . ). They have asked me to put the question in writing. I will post the answer.
I am disappointed to see this latest update - extension of backstop (I wonder what Providence would have called it if we did not have this new Brexit vocabulary ?!). I have been consistently upbeat about this sequence of events (the loan is obviously not going to be paid until the site survey consent is granted etc), and the management's initiatives in dealing with the events unfolding in front of them, but re-stating the urgency of raising funds to the third week of September takes the remaining management team to the other side of the Annual General Meeting, which is their next credibility hurdle. Consequently there is a question about the accuracy and meaning of the information being provided. Obviously Providence do not want to state anything that could leave them open to litigation by shareholders, but the company is at a point where there is nothing to recover anyway, so the potential liability is a matter of the conduct of the Directors. At the same time, when published on September the 20th, one of the main points of the FAO is that it is 'Binding', so presumably there are grounds for litigation against APEC in the event of non-performance, but APEC is registered in HK, operating from Beijing, and Providence clearly does not have the funds or time to pursue the level of litigation this matter would require. This leads one to wonder what is actually going on. The FAO published on the 20th September 2018 stated 'APEC will proceed with payment on signing', which clearly did not happen. And this was before the cluster-shambles with the site survey application emerged. On the 5th June when it was revealed that APEC had still not paid over the loan, it was described by Providence (who are responsibile for the accuracy of the statement) as being 'in part due to the change of the composition of the APEC funding mechanism', which is a (legally) meaningless explanation. Bearing in mind, the 'Binding' FOA commits APEC to 'cash ADVANCES for operational costs'. Today's statement describes 'reassurances that the loan is in the process of being paid'. These statements are being carefully drafted with the input of whatever legal advice Providence can still afford to ensure that they are not false, but 'in the process of being paid' is a wholly different meaning from 'is being paid'. I have no doubt that behind the scenes the management are doing all they can to rescue this project, but today's statement gives them cover should we get to the AGM with no APEC funding, and positions them to continue to say 'we are working on it'. I presume the representatives of the larger Shareholders are asking these questions, but eveyone is a victim of stockholm syndrome here - the share is too cheap to sell.
In relation to the overall timescale, Providence probably recognise that if they do not have some part of Barryroe spudded by the General Election and formation of a new Government in Ireland (Feb/March 2020), their entire business model is over.
Genuinely surprised that the consent was not notified this afternoon. Then I suppose Providence story is always one of surprises . .
It probably was squared away in the contract, which is why the 'payment processing delay' initiative is being used . . . to avoid the costly and destructive (for both sides) consequences of strictly applying the contract.
Sorry for any confusion here . . . it said 'APEC are not a charity'.
On the other hand, it just shows that APEC are not a charity. As mentioned before, all of Providence's partners in the past five years have been left with disappointment and loss - remember exploration well 53/6-1 exactly two years ago? Cairn and TOTAL burned again. With this track record, Providence are contract takers, not contract makers. The Providence approach so far has been to ensure there is no broken contract, and the prospect continues live.
The liklihood is that Minister Sean Canney's office will approve and issue the Permit on Friday this week, the 2nd. Most commentators (except the Dublin-centric PBPs) will be in the sun in Galway, the weekend newspapers will have been mostly put to print, and no unecessary fuss. Hopefully then the the key to the drawer with the APEC cheque will strangely turn up.
In the meantime, for anyone who has any interest in the full Climate Crisis agenda of Solidarity/People Before Profit TDs including Brid Smith, Paul Murphy TD did a good job of outlining this on Miriam O'Callaghan's RTE Radio prog on Monday this week, 29th July. Dramatically cut the national beef and dairy herds now, divert CAP payments to compensate lower earning farmers (larger farms with bigger investment are just banjo'ed, I suppose?). Electric cars are no answer because of their net cost in environmental destruction and use of child labour. Take large agri-businesses including Greencore and Glanbia out of private ownership (nationalise) because the climate crisis '"flows from the profit model". All delivered in the smooth, definite, convincing, evidence-free style we are accustomed to. If only the overall agenda had been shared fully with all the people who bought into the Climate Emergency Bill.
https://www.rte.ie/radio/radioplayer/html5/#/radio1/21594913
As research . . I searched Google Images for pics of Eamon Ryan wearing a hat . . any hat. Not one, none. I even repeated the research with a refined search of 'Eamon Ryan wearing hat'. Again, rud ar bith, absolutley nothing. Regrettably this is the story, politicians with nothing to lose exploiting the 'leave it in the ground' message to attempt to give them colossal statesman-like cool with the hip electorate. He is risking nothing here, he doesn't even have a hat to digest. I note however that he is talking about 'no licenses for NEW exploration'. I presume all Providence has to underpin its share value and salaries is existing licenses. This is yet another kick in the ass to get on with extracting the Barryroe oil and make some progress on any other holdings it has. Act now before the shutters come down . . .
So, the 'exploration interest in other five blocks in offshore Ireland' is the Exola partnership? Thanks.
It would seem that the purpose of the extensions is to equally maintain pressure on APEC to pay the funding and on the DCCAE to grant the Permit. The stalling of the funds is inevitably linked to the Permit problems. In the last five years, any partner with Providence has wound up seriously out-of-pocket. This must be a consideration for APEC in entering the partnership and they are understandably not going to go the same way. The APEC funds are not vaguely likely to be processed this week or next, but if Providence announce an extension until the 6th August, there is no pressure whatsoever on DCCAE to move on the Permit before then. And once into August, the Departments will go tumbleweed-quiet anyway. All concerned will prefer the Permit to be notified quietly, and so it was unlikely to happen while the Dáil was sitting. Perhaps now on a Friday afternoon, maybe the 26th or the 2nd August, and that might result in the least erroneous fuss. No doubt the Providence management are not easing off on the pressure with this.
I saw Tony snr at a meeting in Dublin on Wednesday, so he is not far away (if that helps!). He looked chipper enough, which is good. Still has the Bentley Arnage, so it must have been in the driver's name!
The share options and August deadline are, obviously now, a red herring. The paid Directors would have made a killing if they had just spent any of their Providence income to buy shares and then sell them if any of the planned milestones were achieved. The Chief Executive has probably fewer shares than anyone on this bulletin board. A kind of confidence trick to create the impression that £0.45 is a possibility, and to project a value illusion next to the astronomical management contract payments. As with many things in relation to Providence . . sadly wise after the event.
On the other hand, it could be LOGP responding to its particular insight that these two Providence issues, the survey cert and the partner funding, are not going to be resolved soon, and they will need to prepare for (another) long haul . .
The Government of Ireland 'Climate Action Plan 2019' was presented to Cabinet today, Monday the 17th June. I understand it was finalised and brought forward in view of the recent massive apparent increase in public interest in the Green Agenda. The Plan is short, medium and long term in its outlook . . . running to 150 pages. I cannot find one line relating to the exploration sector or any interest in or intention of altering the licencing framework for exploration and mining. I am open to correction if anyone else finds it . . .
Reflecting on the last five year's roller-coaster share price, placings and dilution, I think Pageant's shares (in PVR) are still priced at 60% more than was paid for them (although obviously if they came to the market that valuation would be upended), so on paper they are still ahead. They have shown good judgement in the past, taking their money off the table at Dalalex before that went badly wrong. However, they were probably also caught without a chair when the music stopped over at INM Plc, curiously another O'Reilly dream from the old days. Maybe they believe that the old O'R luck has to change sometime? Eitherway, cannot see any grounds whatsoever for a significant shareholder to meet the operating costs of their investment. As I recall, PVR still represents the largest single investment PH has, so they will be wishing for the luck to change as much as any of us . .
At least there was one tiny share purchase today, even if it was just to balance the account at the end of the day.
It is a very disconcerting scenario . . obviously not for the first, or even fifth time with Providence. The Barryroe prospect has always been presented as a valuable and accessible asset. Even so, to enter into an agreement with an off-shoot of an off-shoot as opposed to a major explorer was a disappointment, but one that we have become used to, since at least it will lead to developing the asset. However, for this low key partnership to turn out to have no substance would turn out to be shockingly disappointing indeed. It really would be an almost terminal leadership crisis for the Company.
I appreciate that Goldman Sachs have a £2.5 million investment in this, but I have always assumed it is from their 'mad weekend any roll of the dice' Fund. God willing it might turn out to be a surprise to amaze and impress us eventually . .
Yes a good story, with a sad end. Thanks for posting.
Hoping for a more upbeat final paragraph with Providence . .
However, as an eternal (literally) optimist, I cannot help noticing that PVR's descending momentum is much stronger than ascending. On Friday last the 7th June, more than 15 million shares bought added net .30 to the price. Today 450,000 shares sold has dropped the price .60. A very tender share.