George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
I would expect to see fluctuations in both directions in the coming days as the short termers who took advantage of the recent low levels, start to sell. Consolidation is expected at these levels, however, I anticipate we should see a steady rise back towards the 9p region early next week. All IMO of course, GLA.
greendave66 - I recommend you read the RNS again... The drill has now commenced, therefore, the standby costs are no longer an issue. Total costs incurred (as announced by PM this morning) were $150,000. As annoying as it is, it now comes to light that this was out of the companies control. Furthermore, if Heron and/or Gazelle come through, $150,000 will be a drop in the ocean compared with whats to come.
Just gone through... 650k buy post market close yesterday. Lets put things into perspective, it has been 7 working days (9 days including the weekend) since PM reported the issue). This inst going to be an overnight resolution. At this stage I anticipate they are drafting a contingency plan in parallel to negotiations with the local authorities OR they are aware of what is required and are confident it will be resolved in due course.
Either way, always interesting to see how the volume dramatically increases on a share board and how every individual decides they have a story of how they are happy they didn't buy in and how they got burnt last year... Wonder where all these posters were when news was flowing and the SP was near 9p? That being said, the company still have their due diligence to fulfill and I would expect an update regarding the position and action items required (if not a resolution) by the end of this week.
Other potentially informative/useful extracts from the document:
"Under the cooperation agreement between Matad District of Dornod Province and PetroChina Daichin Tamsag, local businesses and herders have preferential access for supplying goods to the company. Procurement notices are regularly posted on district government information boards." Page 6 - 'Good practice: Specific obligations'
"Most LLAs in Mongolia are rudimentary documents. An average LLA does not exceed five pages in length. The Oyu Tolgoi Cooperation Agreement and Khushuut Mine Cooperation Agreement are exceptions among the nine agreements monitored, as they are significantly longer and more detailed. The content of most LLAs does not vary considerably. In general, they provide local government support for proposed or existing mining projects, in return for some company commitments and obligations to contribute to local development and mitigate socio-environmental impacts. The company’s obligations often include preferential access for local community members to employment opportunities, participation of local businesses in contracting opportunities and social investment in different forms." Page 6 - 'The content of LLAs'
https://resourcegovernance.org/sites/default/files/documents/nrgi-mongolia-agreement-briefing-english.pdf
To add to the below... After reading the document and developing an over all better understanding of why the provincial government may have requested this agreement (i.e. to ensure local jobs and preserve environment etc... (presuming that is their intention))... I am slightly more confident that they aren't trying to derail the project but want to ensure the communities best interests are taken into consideration. Whether that in monetary form or employment for locals...
Either way, if the facts stated in the 'Briefing' are accurate and applicable, this would indicate that the oversight could have been from MATD's side IMO. However, once again, I will reserve definitive judgement until sufficient information is available.
I came across a very interesting (an relative) document while undergoing further research with regards to the requirement of a tripartite agreement between the provincial government and central government.
The 'Briefing' titled: "Local Level Agreements in Mongolia’s Resource Sector: Lessons Learned and the Way Forward" is dated November 2017 and covers a significant amount regarding the legalities and their purpose.
"The Minerals Law of Mongolia has ostensibly made LLAs (Local Level Agreements) mandatory since 2006. However, a distinctive feature of the legal requirement is the pivotal and direct role assigned to local governments in agreement-making. The Minerals Law of Mongolia (Article 42.1) requires minerals exploration and mining license holders to “work in cooperation with the local administrative bodies and establish agreements on issues of environmental protection, mine exploitation and infrastructure development in relation to mine development and job creation.” In May 2016, the government of Mongolia approved a “Model Agreement on protecting the Environment, Developing Infrastructure related to Mine Operation and Plant Construction, and Creating Jobs”—the first instance of legislative guidance regarding LLAs. The model agreement, however, does not include guidance on the process for negotiating and concluding an agreement." Extract from 'Introduction' - Page 2
https://resourcegovernance.org/sites/default/files/documents/nrgi-mongolia-agreement-briefing-english.pdf
Although it may not all be applicable, it definitely provides a good insight and fundamental understanding of laws imposed surrounding the mining industry in Mongolia. Highly recommended read.
I would like to think that the BOD are currently in the process of drafting up a contingency plan as I do not believe that they will tolerate anything close to a 100 day delay on drilling. They way they handle this interruption will is key to future programs so I anticipate they are working flat out on coming to a reasonable conclusion in the most efficient way possible.
At this stage, there is not enough information to be able to identify the root cause of the issue. PM have stated the following:
'In all of Petro Matad's operations the Company has followed the land permitting regulations as required under the PSC and in accordance with instructions from the Ministry of Mining and the industry regulator MRPAM. The absence of a tripartite land use agreement between government agencies has never previously been an issue. We are working with the Ministry, MRPAM and the provincial government to remedy this situation as soon as possible.'
Based on the above, PM have adhered to the legal requirements set forth by all parties, therefore, I am not entirely sure how anyone can establish where the blame lies at this stage. I reserve my accusations until further information arises regarding the legitimacy of the 'provincial government agreement' and why it was overlooked in the first place.
Until then, its BAU at Red Deer and all hands on deck to sort out the current issue as efficiently and effectively as possible IMO.
I believe this will be a slight set back as PM have stated the following in todays RNS:
“In all of Petro Matad's operations the Company has followed the land permitting regulations as required under the PSC and in accordance with instructions from the Ministry of Mining and the industry regulator MRPAM.”
The agreement took place with PM and the central government which supersedes the provincial government. Furthermore, based on MRPAMS’s mission and objectives:
“ The mission of the Minerals and Petroleum Authority is to support the government in the development of geology, mining and oil sector policy development, to provide light and fair service to investors and consumers, and to implement the policy of the sector in the field of mineral resources, to enhance the role of the oil sector.” (Translated by google translate)
https://www.mrpam.gov.mn/article/3/
Furthermore, as stated by the ‘Ministry of Mining’ Mongolia…
“Ministry of Mining and Heavy Industry will work focusing on the following priorities:
- Oil and Fuel Industry policy and legal environment for refining the oil and non-conventional oil (coal bed methane, oil shale, oily sand, etc.), search and sustainable long-term exploration and intensify production and sales Saving and the potential to increase the supply of oil products supply is stable and improving fuel quality standards and reducing air pollution;”
http://www.mmhi.gov.mn/public/page/pageid/3
Based on the above, this would be a huge over sight by a number of different bodies if it was in fact the case, also, It would compromise the future of any oil explorer within the region as all explorations will be subject to agreement with the central government and the provincial government. If this comes to fruition then there is nothing stopping the provincial governments of any province the region from seeing the same agreements.
Technically they both could be... Jimithebrush is counting down PM 40 day schedule with contingencies and CaptainStanley is using the 21 day quote given by our drilling partners.
Im forecasting somewhere in the middle of those (28-30days?). Either way, happy to wait!