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This has also been noticed on ADVFN - latest update from Baker Steel Resource Trust (major shareholders owning about 7%) - BSRT NAV update 5/2/19 - see link below, text to follow.

https://polaris.brighterir.com/public/baker_steel_resources_trust/news/rns_widget/story/x2q836x

More jobs coming up at FCF minerals (the subsidiary of Metals Exploration which runs the mine) - 2 more in the last few days - take a look at https://www.jobstreet.com.ph/en/job-search/jobs-at-fcf-minerals-corporation-runruno-quezon-n-v/.

This is in addition to the flurry of new management appointments and others on this website in the last few weeks.

Not a sign of a company in any great financial trouble, I would suggest.

I've just had a scan back through the last 8 years of RNSs. Only 5 have been post close - and none was bad news. The precedent definitely suggests we should have already had the default RNS if we were going to get it.

LB, I think you previously referred to AIM rules around disclosure. One of the rules is "any material change between its actual trading performance or financial condition and any profit forecast, estimate or projection included in the admission document or otherwise made public on its behalf; ".

If so, a default or extension would surely constitute such a change in financial condition and so we would expect to hear today. MTL usually release intraday RNS announcements and with about 1.5 hours to go, it looks a pretty good bet that the loans news will be positive.

Hope you this interpretation turns out to be true, I think the evidence we have so far supports it.

I think the comment regarding previously overstated positions is to refer to IH/AR’s dismissal, but also to suggest that despite the equipment operating below previously stated it still produced a decent amount of gold. This is reassuring in a way as it again suggests with nameplate production it could be substantially higher. What is slightly troubling I would say, is that if the recovery was previously not as good as suggested it does mean that they may have mined more ore to achieve the gold they did. In which case, the life of the mine may be shortened. But, we do know they are intending to do more exploration.

Overall, I think this update will reassure lenders that the company has the capacity to make repayments and become profitable, albeit not risk-free. As others have said, here we have a producing mine unlike quite a few other AIM miners and I think the re-financing risk is what is now holding us back short-term as well as possible off-loading by Ruffer.

One final note:

Two elements of this re-financing we need to be aware of:
a) Senior lenders (HSBC/Paribas) = $63.8mn, but senior loan facility ($35.6mn) capital payments deferred
b) MTL/Runruno (Working capital, Jul 18, Mar 18, Dec 15) = $11mn

It looks like from the quarterly update comments, they’re prioritising the senior lenders:

“Discussions with Senior Lenders regarding restructuring of FCF Minerals Facility are ongoing and a market announcement will be made when these discussions are finalised.”

Over major shareholders:

“Restructuring of the Company's working capital loans is yet to be completed but discussions are ongoing.”

I’m not sure whether these will all be rolled into one or whether we’ll get one RNS with a senior loan restructure and one with a new mezzanine facility. My instinct is that we’ll get two new arrangements and two RNSs.

I have a feeling the senior lenders agreement will be RNS’d tomorrow.

But that we may default or get an extension to the major shareholders mezzanine discussions till end of Feb.

Looking forward to seeing how this plays out; good to know what others think.

I’ve just been trying to piece together some of the information we have from recent RNS announcements to try to understand what’s going on here and I’ve written a summary because it would interesting to hear other’s views.

I think this update is all about demonstrating to the lenders their capacity for repayments. It’s interesting that they made a capital repayment of $500k during the period but obviously had to defer most of it (~$7mn due for December working on the assumption that it’s one-fifth of the total deferred = $35.6mn). This comment from the 22nd November RNS is suggestive: “As previously announced to the market on 5 November 2018, the Company has also commenced working towards restructuring its senior debt facility and is considering wider funding options, as the Board continue to work towards realigning the overall Group debt with the Runruno gold mine cash flows. It is expected more information will be made available before 31 December outlining the strategy being pursued.”

So far the recent interest payments have mostly been facilitated by the working capital facilities provided by MTL/Runruno. The previous capital repayments look to have been made possible also by working capital loans by MTL/Runruno.

Going through the figures – they say that both the grade of ore was low at 1.53g/tn, but this is an average which increased during the quarter. Let’s say the grade started at a previous low of 1.42g/tn and increased to the average for period in November – as it’s an average we’d then expect a much higher figure for December, say 1.65 at least if it went up fairly linearly. Likewise with the gold recovery rate which is an average and we know has been as high as 75% previously. If these two assumptions are true and we mine a bit more in the next quarter let’s say 10% more (ie. 550k), then we’d expect to pour at least 20,000 ounces of gold in the next quarter. Assuming we sell this for ~$1,300/ounce, we’d sell $26mn for the next quarter. All of these have been achieved operating figures have been achieved previously, and we’re told things have stabilised so I would think this is what the new team are starting with and hinting at in the update.

The current figures suggest that operating at a fairly low rate (ie. Given all the problems of the last 2 quarters) they’re making $14.2mn per quarter. The operating expenditure went up sharply in the last quarter (to $18.3mn), although not stated presumably this is due to expenses associated with repair and maintenance, because these have been fairly stable at £15mn previously.

It’s difficult to speculate without knowing the ins and outs of the gold process what the increasing efficiency will translate into in terms of gold production (ie. what % higher) other than knowing it should be higher. Assuming the improved performance of the mine, we should easily be able to meet all financing and operating costs and still turn a profit to build cash reserves.

Good spot Mick.

Ruffer got most of their shares by a move into their management of approx. 163mn shares in Feb 2015 (not sure who from). They purchased in a few tranches of 10mn in April 2015 to get up to 183mn when the price was between 5 and 6p. They also subscribed for approx 20mn in a placing in Oct 2015 for 3p each.

So, it's easy to know how much they paid for about a quarter (AVG about 4.5p) but not the rest. They've got rid of some slowly over the last few years.

Be interesting to see what they do here, but it's reassuring to have evidence that its strategic (as we suspected) rather than something to do with MTL (where it seems a poorly timed decision.

Fairly chunky buy just gone through too!

I think it's a fair assumption LB - this is from the 15/03/17 Project Update RNS:

"Metals Exploration announces that it intends to commence quarterly reporting of the
activities of the Runruno Gold project commencing Q1 2017, by 30 April."

suggesting a commitment to an operations update by the end of month following the end of the last quarter.

But, I suppose they have been rather busy lately as we know. I think we will get the operations update and loans update in close succession, as we've not heard anything yet.

Excellent research Pharmajohn - sorry for doubting. Seems I jumped to the wrong conclusion - HSBC obviously provides private banking (@hsbcpb.com) for Edwards/Runruno holdings and it's a nominee account. Interesting though that HSBC also happens to be the major lender here.

And the details given for Runruno have an address for HSBC house and a contact email at HSBC?

Not sure why the HSBC company stamp is on the signature page for Runruno holdings on the charge filing in October 2017 then: https://beta.companieshouse.gov.uk/company/05098945/charges/UKY2CMgNOEoiNM0W_FGyYWKqA6I

I'm also wondering whether this is part of restructuring the board - at the moment MTL hasn't had a traditional board structure with Chairman, CEO and CFO and a series of NEDs annd other directors, presumably owing to its size and traditions.

It's quite notable that DB was hired as CEO rather executive chairman, in my opinion. Perhaps Guy Walker (who has financial experience) is being lined up as a board-level/executive CFO. I think in the update there was an illusion to creating a new operations/mines director of memory serves. And perhaps we're also likely to see a few more nominated NEDs.

A larger board would point to a ramping up of operations and potentially more professional outfit in future, which would bode very well.

I may just be carried away though, in any case it would be good to hear what everyone else thinks.

Some great research and insights from everyone.

Another interesting snippet I noticed from the SP article is that he mentions quite specifically that the lending has been agreed with HSBC and Paribas (rather than Candy via MTL Luxembourg). Guy Walker is Runruno's nominee (ie. HSBC) but from what I can tell Paribas although current lenders don't have a representative.

My thinking here is that Paribas want one of their people as a director (or at least a joint nominee with HSBC) but are happy with HSBC's nominee for chairman overseeing things for the moment. Not sure about the logic behind Candy's nominee (Simovici) going but I am confident it has something to do with refinancing and perhaps shifting power towards the banks, as it seems pretty clear from looking into Mr Simovici's background that he is something of Mr Candy's right-hand man.

Tying the SP article and the movements of the various personnel (and their affiliations) to different positions makes me more confident that the motive behind these changes is refinancing related. So, nothing else to worry too much about - in fact even something that's reassuring despite the uncertainty created. Furthermore we have a precedent for movement of senior personnel during the 2017 refinancing.

Can't wait to see how things pan out next week and whether our deductions and speculation turn out to be well founded.

Could be a delayed sell trade though (which hasn't come through yet).

We know that since the afternoon news was released, there have been nearly 1.5mn buys (rather than the reported sales) - looking at the pattern of the apparent sales (ie. price increasing despite being below mid-price) and corroborating with IG and Roy/Adam's buys at 1.175.

I agree with Lee; A) we know about the credentials of the new CEO (ie. unlikely to have come to MTL given his track-record if it was going to crash), B) we know there is a precedent for the major shareholders asking for fresh blood during a mezzanine debt restructure (look back at switch of CFO July-Sept 2017), C) the evidence from another major shareholder (Baker Steel) is that the previous dump was by "a major shareholder who had grown impatient with refinancing" - the likelihood is that all the major shareholders have grown impatient with current board, D) it is notable that with the exception of IH, the rest are remaining in post at least for the short-term, and not leaving immediately, which I imagine they would want to do if this was going to crash to avoid the reputational damage.

My feeling is that DB and the major shareholders want change and the change is a condition of the re-financing. In any case, it is surely better to get the "bad news" out of the way this week, before hopefully good news next week.

Adam - surely these developments put the banks in more control (Runruno, as I understand it, is entirely owned by HSBC). As Guy Walker is Runruno's nominee and is now (temporarily) chairman, surely he has greater oversight and authority than a non-executive director, and also by virtue of his longevity/survival compared with the rest of the board. The question this raises in my mind, is whether this sets a precedent ie. will the new chairman also be a Runruno nominee?

Notably, the RNS suggests that MTL (Candy's) nomination has been received but not appointed, the implication being that the nomination may not be approved (by the board/other major shareholders).

Be good to get some LTH perspectives on these points though.

Last one that went through (839,747 @ 1.19) is a definite buy ... I'm being quoted 1.15p to sell and 1.175p to buy on IG.

MMs obviously want to get their hands on these cheap ... just like their tricks a couple of weeks ago when it was at 0.7-0.8p.

Can really feel the boardroom drama here. It seems DB, shareholders and lenders want a clean slate. Looking at the history of this, I can see why - the patient evolution rather than revolution approach under IH's leadership has failed recently to make the most of MTL's assets.

Under DB's "revolution", hopefully we'll get a dramatically different approach which will improve the production and exploration considerably.

Real sense of excitement here ... looking forward to next week (and maybe Tuesday as 801948778 predicts).

I agree, doesn't do to get too serious.

Hopefully 5(p) golden rings soon, followed by 6, 7 ... all the way to 12.