Shareholder Meeting 29/11/2018 Pt 11 Dec 2018 12:07
That will teach me not to go out drinking. Got a right headache this morning.
I just watched the BBR media interview, which though not recorded at the shareholder meeting covered off a lot of the information I thought I would have to attempt to impart. The discussions of Red Rabbit was quite high level rather than exhaustively considering each prospect, especially the lesser developed ones. So apologies to VanVan, I didn’t really get to address some of your questions, there wasn’t time.
To be honest I think everyone ended up a bit fed up of me asking questions!
My apologies to Dr S for any errors in what follows, it is my interpretation of what he said.
The mood was very upbeat. For instance, after quite a detailed geological description by Dr S about Salinbas, MDV chirped up with words to the effect of ‘He (Dr S) can’t believe it. Geologists wait a lifetime for this sort of discovery and he has found it already!’. (Bear in mind MDV continues to invest strongly). Further, to paraphrase a comment by Dr S, the operations in the West of Turkey are essentially the engine, the facilitator, of hopefully the real company maker which is Salinbas/Ardala.
One thing I noted was that, following their previous successful investment in ‘technology’ metals, the company is looking at any further investment opportunities in that area.
So to questions:
Q. Kizilcukur/ Ivrindi – PIs have expressed that they want to avoid further dilution if possible. Would it not be in the best interests to sell these prospects into JV now to help fund exploration even if that means getting a little less than when fully explored?
A. Kizilcukur exploration is more advanced than Ivrindi, further exploration being done in coming weeks. It is only Kizilcukur which is currently subject to an option which can be exercised at 3 x costs. An estimate of these costs so far is £300,000. This option to take into the JV would be triggered by the Proccea members on the JV board, so will not take place until they request it. Ivrindi may be taken into JV but that will be by negotiation, there are no (potential) contracted terms. The distance from the current processing plant is a little more than for Kizilcukur but on good roads and is considered truckable.
Q. How does the 3 x costs work. Is that money due to AAU from the JV or from Proccea. If from the JV then surely AAU is effectively partly paying as it has a 50% share in the JV?
A. The JV. Dr S agreed that the net amount to be received by AAU was therefore effectively 1½ x costs, which at the moment would be c.£500k.
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