RE: Mr Magic18 Jan 2019 14:05
Indeed you are quite right that we can't lose with the CLNs, which is why we do them. Regardless, I have shares in RRR and I think the share price will go up in due course.
In fact, if we thought we were only getting the 10% coupon on the CLNs we probably wouldn't do them. The reason for rolling over the CLNs and extending the life of the warrants was that we think that in due course we will make a substantial equity return. If we make an equity return then so will everyone else.
I must point out that there is nothing to stop other people offering to do CLNs with RRR and with other companies; we have them with other companies too. It is a commercial transaction disclosed in the public domain. Just because you don't have an adviser that can get you access to discounted placings and CLNs doesn't mean it is sneaky; there are plenty of people out there who can get you access.
Further, the conversion right is at 0.8p; you can buy in the market today at a lower price, there is nothing to stop you doing it.
With regards to Steelmin there were two issues last year; the price of electricity and the spending. The price of electricity went through the roof in central Europe because France took nuclear power stations off line following safety issues. Steelmin was buying in the spot market and paying through the nose but that was symptomatic of the then CEO's attitude. There were some minor operational issues but otherwise the plant worked.
Steelmin still has a value regardless whether it is shut down or not. The value would be greater if were up and running but we are where we are. I expect a deal will be done to sell Steelmin and RRR will still do quite well out of it but not as well as it looked June 2018.
RRR didn't have the DRC/VUP deal then, it was chasing tailings deals. If and when Steelmin is sold, I expect the proceeds will be used in DRC/VUP JV. Given the quality of the DRC/VUP JV I also expect that RRR will release funds from elsewhere to fully exploit it.
You will see in due course that those licenses are going to be worth a lot of money. I also expect that RRR will bring Musonoi into production at a low level pretty quickly. I don't know for deffo but my view is that with a bit of work those licenses can be sold for a multiple of the current market cap.
FYI I am not happy about the Diamond deal; I think that was a mistake. I told AB to his face this week that it was a mistake.
DYOR
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