Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Just a quick note of thanks for letting me know you found my earlier posts useful, it’s refreshing to visit a board where posters are genuinely helping each other and I very much appreciate your courtesy. I hope it's good news all the way from here for AFE. PS Like you I hold a parcel of PMO, mine from Encore days, keeping my fingers crossed they manage to build reserves then attract a nice takeover offer !
Hi, you originally asked why they chose this option as opposed to a consolidation. I was attempting to explain that this method was chosen as it achieved the purpose without changing the number of ordinary shares in issue. A consolidation would increase the nominal share value and reduce the number of shares is issue. Alternatively a straightforward subdivision would achieve the desired reduction in nominal value but increase the number of shares is issue. Re your other query, in a nutshell, UK registered companies use nominal share values for accounting purposes. There is a useful source here http://www.out-law.com/page-8204 that explains that even where a company subsequently issues shares at a price below the nominal value, nil or partly paid, the difference remains due to be paid at some future point. I hope this helps.
In this case the deferred shares are being issued to all shareholders solely to facilitate the reduction in the nominal value of the existing ordinary shares. By way of the subdivision the company is transferring (1) all the rights attaching to the existing ordinary shares and one tenth of their nominal value to the new ordinary shares and (2) no rights from the existing ordinary shares but nine tenths of their nominal value to the new deferred shares. This way shareholders will end up with the same number of ordinary shares that they currently hold and retain the same ownership rights. The new deferred shares will be retained by the company as they are effectively worthless. The advantages to the company are they will have the option to issue new ordinary shares to raise fresh funds at a price above the new nominal share value and no new share certificates need to be produced from the subdivision as the number of ordinary shares in issue remains unchanged.
The purpose of the exercise is to change the nominal value of each share in issue rather than change the number of shares in issue that a consolidation (or subdivision into new preferred shares) would achieve. After the event shareholders will hold the same number of new ordinary shares as they currently hold in existing ordinary shares and the new shares are expected to have the same market value whilst having only a tenth of their nominal value (allowing the company the option to issue new shares to raise further funds). So, the choice of corporate event hasn’t been made with warrant or option holders specifically in mind and ordinarily I would expect that in due course they will be offered new shares under the same conditions as they would be entitled to convert to the existing shares. The circular to shareholders might already have some detail on this.
Well, PL leaving is no bad thing in my book as is cutting ties with OKAP. I guess that's why he paid off the RRL loan, lol.
Kira, if you’ve looked at Hotcopper you will have noticed the UK rampers that have gone on there and made disparaging remarks to fellow PI’s who lost a lot of money by simply following Conti in exactly the same way that some over here are doing now. If any of them do make negative remarks then they paid a heavy price for the privilege. I genuinely think that perhaps you should consider listening to what they think went wrong before you write them off as weird derampers. How better to avoid making the same mistakes ? When I read this document http://www.conticoal.com/_content/documents/540.pdf , I think it’s striking how much is similar to the way that the business is being promoted again now to a new audience. And yet the share price is right back to where it was before the 10:1 share consolidation that took place not long after this was published. Many of the reasons why can be seen by analysing this simple promotional document. This is just a friendly piece of advice with no malice intended, feel free to ignore me if you prefer.
Thanks for your post. For some reason none of the shareholders here seem to care how many shares are issued to lenders who want to retrieve their loan amounts. And when the result is a falling share price they instead exclaim that the price is being ‘held back’ :/
Nat, lol, you gotta know that was most definitely a case of fat finger ! Kira, I’m aware of the VMR related investments and I’m not ignoring the prices VMR are paying, I’m just not taking it as a basis for my investment decision. I recall that the last cornerstone investor put in far more $$$’s at far higher prices less than two years ago so I’m certainly not going to be seduced into following VMR in now just because they have paid over market price. Unfortunately it was that kind of blind faith that led thousands of Aussie PI’s to end up as ‘Minority Holders’ with virtually worthless holdings. So no, I don’t think the current market price reflects VMR confidence. I think the market doesn’t remotely share the confidence shown by VMR and I’ve made some posts about why I think that is. If the placing had been to achieve something game changing like wiping out the debt they are trying to restructure or get De Witts or Bots heading for production then I could perhaps get excited. But its not really doing anything more than helping them through the current cash crisis in my opinion so I’m looking for tangible news on how and when they are going to progress these other things before deciding on whether it’s a good investment or not. Sharendipdity, there’s plenty of trains in the station, the tricky is trying to spot which will get me to my destination or derail on the way ;)
Predictably disappointing responses from both of you considering that this is a Continental Coal share discussion board. Every point I've made has been based on announcements that the company have released to the market. The VMR deal has been announced to the market four times now and the share price should be telling you that its not the news the market wanted to hear. That's the simple truth you are either failing to see or choosing to ignore. And petty insults won't change that.
Of course, part of the reality is…. 26 April 2013 ‘the Company has the following total number of securities on issue: 537,801,552 Ordinary Fully Paid Shares’ 8 May 2013 ‘100,000,000 ordinary shares issued. Following the issue of these securities, the Company has the following total number of securities on issue: 684,104,446 Ordinary Fully Paid Shares’ Actual reported change to shares in issue = 146,302,894 Today shareholders saw their share of ownership of COOL assets fall by 27% (33% since year end) in exchange for a cash lifeline that COOL already started spending when they took the $2M loan from VMR. That’s on top of the significant dilution last year and the market already knows there is more dilution still to come. In my opinion there is no shortage of shares for VMR if they want to start adding to their holding.
CeePee01, great, let’s stick to discussing the stock and you can keep making your points which I have never tried to stop you doing and you can let me give my opinion from time to time please. I am a firm believer that the better you know your history, the more prepared you are for the future, which is probably why I consider recent events here to remain relevant. There is no doubt that especially in Oz their reputation has been tarnished and I think it will take actual achievements to regain backing rather than woolly promises of jam tomorrow. On VMR, all I know about them is what I get from google and I’m not sure I yet see the ‘liquidity, balance, experience and influence’ you are expecting but, as Nat says, time will tell. Sharendipdity, if they could get through the debt restructuring without issuing a barrow load more shares then I’d be a lot happier. Shame is we are a month past the date they were to provide a comprehensive update and we got no news on it at all today. ----------------------- I do have one other concern on today’s RNS so best I get it out the way now rather than bugging you all again tomorrow :/ Up to today they have been guiding us to expect Penumbra to ramp up ‘ROM production for Q3 2013 of 75,000-80,000t with monthly budgeted ROM production of approx. 63,000t scheduled to be achieved by June 2013.’. Today, they state : ‘Geotechnical work related to support of the sandstone roof above the coal seam has been a focus during the Quarter, as this has impacted on the mines planned accelerated ramp-up, with particular focus on determining the optimal amount of support required. Further work on methane monitoring in areas below the overlying wetlands is also a key focus for the current quarter.’ I take this is a warning that the ramp up is subject to slippage but I continue to have faith in the capability of the operations side of this business.
I've already said umpteen times why I post here and I explicitly said I WOULD ( I know how you like inappropriate capitalisations) buy if I think it becomes investable again. Why can't you just discuss the stock ? If I'm wrong then show me why. Why don't YOU look at the whole picture ?
Surely you can see that it’s cash that they need not non performing assets. Isn’t that why they said in the last ‘going concern’ statement and repeated in the latest Interim Report that sales of non-core assets formed part of their financing plans ? Total cash and cash equivalents as at the end of the Quarter is stated as approx A$6.2m. During April they announced the settlement of the final US$9 million Mashala payment. The cash box looks empty and this is a stock with a $17M cap that says its renegotiating $16M of its debt and looking for project funding and is already in the process of issuing two hundred million more shares.
CeePee01, I’m the only one who does look at the whole picture, whereas you only look at the rose tinted bits and dismiss the concerns I raise about finances and ongoing shareholder dilution. From a re read I see a drop in costs attributable to something called Stock Movement which has resulted in a deduction from costs this quarter of approx ZAR15.8M, equal to approx A$1.4M. Do you expect costs to continue to reduce like this and if so why ?
Sharendipdity, the sale of Vanmag was first announced to the market on 25 September 2009 http://www.conticoal.com/_content/documents/499.pdf and announced as finalised on 9 May 2011 http://www.conticoal.com/_content/documents/415.pdf It was finally announced as settled on 8 March 2013 http://www.conticoal.com/_content/documents/684.pdf I was hoping for news on the sale of the non-core assets following the update given in February : Sale of Non-Core Assets During the period the Group progressed its discussions regarding the sale of a number of its exploration projects within its thermal coal mining portfolio in South Africa that are designated as non-core. To date this has included proposals to acquire 100% of the Group's interests in the Vaalbank, Project X, Wesselton II, Leiden and Mooifontein Coal Projects in South Africa. The lack of mention in the latest update was disappointing.
Revenue for the Quarter of A$13.8m was 4.1% lower than the previous quarter. Doesn't look like discussions are ongoing for the sale of any non-core assets.
Which is what makes you the kind of investor that JB travels half the globe trying to find. Someone who claims to be a substantial holder and who has followed the company for years, yet seems to care not that the strategy to grow has caused shareholder value to implode by 90% since the time of the last cornerstone investment while they await approval for the latest one. The biggest growth here has been of debt, shares in issue, directors pay and consultancy fees and all at the expense of shareholders. And as another week closes, instead of the delivering the overdue updates they deliver more dilution instead. The way things have been going I won't be surprised if they try to bury more bad news with the next quarterly operations report.
Exactly, of course the number of shares in issue is important as is the accurate reporting of it to the market. The plethora of new shares is all major dilution to existing holdings and I think that a lot of the millions of shares going to lenders will be available to buy when and if Village Main looks to buy some more in the market. As for delivery, I agree the next quarterly production figures should look good, Penumbra is ramping up from a near standing start ! Just remember though, the company has given clear guidance on what the numbers should be looking like by June so only muppets are going to be dazzled by big % rises in the meantime. What matters most just now is debt and cashflow. When the company has to pay directors in shares in lieu of cash and meet an interest payment by way of issuing new shares it should be clear to anyone that lack of cash remains a major issue with Conti unable to touch the revenues from Penumbra until at least next year according to what was said in the Autumn. Anyone seen any broker notes lately ?
Have I miss-counted ? Don't you think it matters how many shares are in issue ?
In my post on 27 March I detailed what I reckoned to be the amount of shares due to hit the market based on announcements made to that date. In today’s confirmation of the new shares going to directors they have announced another issue of shares, this time to meet an interest payment adding 10,681,818 to the pot and taking the shares total to 537,801,552. But if I use their last total stated in the December report of 511,119,601 and add the shares issued : 10,453,698 - January 2013 - Conversion of debt to equity 5,485,781 - April - to Directors 1,000,000 - April - to Director 10,681,818 - April – to meet interest payment ..I get a new total of 538,740,898 which is 939,346 higher than the total given today ? Not sure if it is related or not but according to the annual report the total of 511,119,601 included 939,346 shares issued on 18/12/12. Something looks to have gone awry somewhere. What next ? Well, I am yet to see these hit the market : 2,000,000 - January 2013 – To lender 50,255,531 - January 2013 - Conversion of debt to equity 47,572,181 - 25/02/13 - Conversion of debt to equity (was expected to be admitted for trading commencing 25/2/12, did this happen ?) 100,000,000 - To investor 2,485,001 – balance To Directors So that’s 202,312,713 more shares coming to market and still no news on the $16M debt restructuring talks, any asset sales or new project funding arrangements. I won’t be buying today and I think the Aussie's will gleefully sell into this rise.