Member Info for Leo_IX

I always believed the threat of dilution was the biggest danger to shareholders but today's RNS seems to have removed it. Now we seem to be looking at revised repayment terms or the major lenders/holders taking on more of the debt. Either way this can only be good news although the market does what it always does and immediately goes the wrong way. Finally a genuine buying opportunity and so I'm in again, hopefully for the long haul.

Anything's possible. But the lower the placing price the more they dilute those who aren't invited to participate. Who will be stumping up the cash and how greedy will they be? Like others, I'm just waiting for clarity before jumping in.

Some seriously dodgy 'facts' flying around over at ADVFN on both sides of the equity argument. Someone has suggested there's a limit on how many placing shares can be issued, but unless there's something company-specific at MTL, this seems unlikely. HAYD has just announced a placing of 190m shares plus an open offer of a further 200m, compared to a current 28.5m in issue. Could something similar be the way forward for MTL? HAYD new shares will be trading by 13 Mar subject to the necessary resolutions being passed, so there could be enough time for MTL to do likewise by 31 Mar, assuming potential shareholders have already been sounded out. And no, I'm not suggesting dilution on that scale here, it's just a timely example of a quick fundraise.

If calling it right every step of the way is showing myself up, I guess I can learn to live with it.

Until there's clarity on who is providing equity funding and how much of the company they're taking in return, this share is uninvestable imo. Best of luck to those who believe otherwise.

Dangerous times for PIs. The deed specifies an equity fundraise, which doesn't need to be a rights issue. If the big shareholders put up the cash for equity they can be sure they won't be diluted, but everyone else will be. The price per share of such a deal would determine the extent of this dilution.

Net equity proceeds = gross equity proceeds less broker/advisor fees.

It is a condition precedent of the Deed that the Company raises net equity proceeds of US $20million before 31 March 2019. These funds will be immediately utilized to reduce the Senior Facility by US $15million and provide a working capital facility of US $5million to FCF.

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That seems pretty unambiguous to me. There will be $20m raised in new equity, it's a condition of the deed. Considering the company is $30m+ behind with capital repayments, demanding only $15m initially seems very fair and is at the better end of the spectrum of possible outcomes. But let's not pretend there's little or no dilution to come, it's there in black and white.

Looks like some poor sap's taken a negotiated trade. MMs have taken in a lot of stock at 1.2 and above this morning and obviously want to make a profit on it, but that's taking the piss.

Since you're so interested in my strategy, and clearly in need of advice, I'll give you the details.

I've traded four times since Dec '18, because whatever happens with the refinancing, there have been plenty of short-term opportunities since then and there'll probably be more before the end of March. Each trade has been reasonably low-risk, e.g. buying the morning after a positive article on TW's website. That was 20% profit in an hour if you're interested.

Am I looking to buy back at a lower price? Of course, if there's a profit to be made. Do I think I can influence the share with my postings? If your endless ramping can't raise the price, it seems unlikely don't you think?

Thought you might have had the decency to apologise for your blatant lie at 11:35. Very disappointing.

Adam, your post from 1Feb

These shares are worth so much more than what they’re getting sold for, this time next week on confirmation banks have agreed to extension we’l be over 3p.

Lee, I wasn't suggesting a fundraising, but since you mention it we haven't even been able to repay interest on the bank loans without loans from the major shareholders, never mind the capital. If everything's as rosy as you believe, what do you think the lenders will be discussing for the next eight weeks?

Hi Adam. Weren't you predicting 3p on news of an extension by the banks? People in glass houses...

There's one thing holding this back imo and it's this much-overlooked snippet from the RNS of 22 Nov...

"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."

How exactly do they intend to realign debt with cash flows? Sounds like a debt for equity swap to me on terms we can't even make a guess at. Small shareholders will surely be punished at some point, it's just a question of how much.

One of us has misunderstood the RNS. It's not me.

Don't mind admitting I got out at 1.58 today having got in just before the turmoil of the chairman's resignation last week. Nothing like going 30% down in five minutes to make you glad of a profit, however modest.

Assuming the banks grant an extension, the proverbial can has been kicked down the road to 31 Mar, which just brings us back to where we've been this week, waiting and hoping. That's two months of limbo and I don't mean the dancing. See you back here in eight weeks.

Board's unusually quiet this morning. Everybody sold out during the excitement?

According to their recent review, gold producers are where they want to be. Seems contradictory to sell MTL.
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We have been pleased to see the gold price creeping up – again, we have increased our exposure there. The value at the moment is in gold stocks, rather than gold bullion. The mining companies’ share prices have been in long–term decline, and have reached that happy–hunting ground where the enemy of stock appreciation is not bearishness, but indifference. In a world where everything goes down, before everything rallies, and then everything… here is a genuine diversifier. Gold is an opaque and shadowy investment – many refuse to admit it is an investment at all – and so its early signal of a positive response to difficult markets generally is a hopeful sign.

Adam,

Is it possible the CEO has only had assurances that the banks won't force the co into administration? What will they want in return for their continued support? If they insist on a d4e swap, the other major debt holders will insist on it too, and small shareholders would be squeezed out. Plausible? Your thoughts please.

Hi Adam

Not really negative at all, just playing it more cautiously than most, not seeing every big trade as a buy. A 40% gain in four weeks is above my target profit and I don't expect good news on financing until the eleventh hour, so am on the sidelines watching. Getting the standby loan sorted is obviously important, but it's the $35m due later this month that could go down to the wire. Major lenders and major shareholders are jockeying for position and if we stay alert we can all benefit, but you can bet that if there's way to shaft small shareholders, the big boys won't hesitate.