Member Info for okenia

Given the fundraise is at 50p (post consolidation) .... "Are we going to get consolidated at 10 to 1 i.e. we would need the sp to open at 12.5p to breakeven ,based on a 1.25p last close?"

The amount of money they raise from institutions will give an indicator as to potential upside from 5p. Those guys ain't throwing $40m at this in the expectation of just washing their faces.

Thanks for that BtS. I think we all deserve a bit of good news given what we've been thru this last year. The 1.6p placing was the low point but hopefully this deal is more than enough to offset that. It's been a helluva ride.

Rub your eyes. You're correct levi! 5p. In the terms of what we paid before suspension. And Board happy to throw millions of their own cash at this at 5p (in our money terms) Nice huh?

Suspension mid price was 1.25p (most of us have higher in prices) and thus raise is at a 400% premium to that. Plus Board et al intend to put $5m of their own cash in at this 5p (old money) level. They're not doing that out of charity I can tell you! They expect a big payday from a base of 5p.

Yes you can. I've explained this to you before. With examples. The vendor receives a deferred consideration paid out of a share of the production revenue. Eg $1m initial payment gets you a $25m mine (such as Clinchro) to give one recent example. The rate limiting step is the requirement to deploy a team and be the operator. Assets are around, what's lacking are the ppl to run it.

zumore - I think you're the only one here baffled by the warrants, sorry. Warrants are warrants. They are a contract that confers the right, not the obligation, to buy new stock at a certain price. As Andrew says, to exercise those warrants the holder will have to pay RRR £500k in cash, and they'll get in return a number of shares equivalent to that sum divided by the trailing 3 day price plus 20%. Simples. To make economic sense you'd thus not exercise those warrants and send a cheque for £500,000 to RRR (which is what they all have to do) until the SP was well north of that SP+20% figure. This is not unusual (although I accept that it might be out of your own experience). Warrants have a value, and can be used as a payment / incentive. For example, it's common for a broker to be issued warrants in part payment for services rendered. If you read an RNS for a company other than RRR and RGM (... yes, there are other AIM companies ....) they you'll see this pop up repeatedly. I would recommend spreading your interest just a little wider than your fixation on Andrew's two companies, and these sort of things wouldn't perhaps be so "weird" or surprising to you.

I doubt that lithium play is material given the size of Pembridge post-acquisition. 10% v5% makes no odds, it'll be a drop in the Yukon River either way.

There's this whole bubble of interesting news regarding copper and loads of signs money is inflowing into Cu - which obvious is a good thing for Pembridge!

If not next month, then some day ... Rodney ...

On that basis, it could also be Mitsubishi. Their war chest would certainly allow the $30m "sweetener" and the willingness to co-work with Pembridge going forward fits with the spirit of that article as to how these Japanese trading houses work.

"Mitsubishi CFO Kazuyuki Masu said this month the company was looking to invest in COPPER mines - one of its three focused assets along with liquefied natural gas (LNG) and coking coal - to meet expected rising demand for electric cars. This could include the bolstering its stake in mines in which it already has a share, such as Peru�s Quellaveco project, where it has invested with majority shareholder Anglo American, and which is awaiting for a final investment decision. The five trading houses combined had about $48 BILLION in cash and short-term investments as of end-March 2017, according to data in Thomson Reuters Eikon." 2/2

"Japanese trading houses on the prowl as record earnings boost appetite TOKYO (Reuters) - Japan�s trading houses are scouting for assets as they enjoy their best profit outlook in six years, driven by higher prices for commodities from metals and coking coal to oil and natural gas. Equipped with a nearly $50 billion war chest, trading houses are looking to bolster their global commodity supply chain networks, eyeing gas fields in Australia, oil in Iraq and coal and copper assets. But - still smarting from huge writedowns in the last investment cycle - big debt-fueled acquisitions look to be off the agenda, with the focus on greenlighting undeveloped assets, taking bigger stakes in existing projects, and trading up to better quality operations. �Now we have a lot of money that we can invest. We didn�t invest so much in recent years,� said a senior executive from a major trading house on condition of anonymity, declining to be named. �We want to be in the driving seat in investments. We are searching for good projects,� he said. Known as shosha in Japanese, trading houses led by Mitsubishi Corp and Mitsui & Co fulfill a quasi-national role by importing everything from oil to corn to sustain the country�s resource-poor economy. Together with Itochu Corp, Sumitomo Corp and Marubeni Corp, the five major trading houses reported record April-December net profits this month, with many upping their full-year forecasts. Combined, they expect annual net income for the year to end-March, 2018 of 1.88 trillion yen ($17.4 billion), the most since 2011/12 financial year. ASSETS IN SIGHT Mitsui this month won a bidding war for Australia�s AWE Ltd with a $470 million offer that will give make it operator and 50 percent owner of the promising Waitsia gas project. Analysts described it as a low-risk investment, while Mitsui said becoming operator of a gas field for the first time would bolster its credentials to bid on other Australian gas assets. Mitsui has been expected to step up its spending in energy and metals, where it is the strongest of the top five trading houses, said Nomura Securities� senior analyst Yasuhiro Narita. Itochu - the least exposed to natural resources of the five - is set to buy a stake in Iraq�s West Qurma 1 oilfield from Royal Dutch Shell. It is also eyeing coal assets to replace declining output from its current operations, Chief Financial Officer Tsuyoshi Hachimura said earlier this month. " 1/2

The five major Japanese trading houses are: Mitsubishi Corp Mitsui & Co Itochu Corp Sumitomo Corp Marubeni Corp This is a very good read as to how they behave: https://www.reuters.com/article/us-japan-traders/japanese-trading-houses-on-the-prowl-as-record-earnings-boost-appetite-idUSKCN1FZ0D8

lol

The purchase cost is $37.5m but they'll want cash on top of that for exploration (extend LOM) and operational improvements (albeit some are paper things, like this off take being at mine gate not Skagway - that's added real value to Minto just by negotiating a better deal). We should be close to the book build now this off take is announced.

We don't know exactly who the Japanese are, except they're a global trading house (and clearly with deep pockets and a desire for the concentrate). Having fought to get the off take, the Japanese presumably want to make sure it continues into the future beyond the three years, and potentially expands in quantity. It's thus intriguing to read this bit: "Both parties envision working together on the Company's planned development of the Minto site and developing the broader region; and" No the obvious way they'd 'work together' is by the Japanese providing further finance (e.g. a line of credit, secured on production - like reserve-backed lending facilities in the O&G sector). That hints to me that the Japanese aren't just a vanilla buyer of the concentrate, they're going to be an active partner alongside Pembridge going forward. That's a massive bonus to have that sort of financier "on tap".

Another very important bit of the RNS is this: " The Offtake agreement allows the Company to sell concentrate from Minto at the mine gate thus eliminating the historically large working capital requirements when the site is unable to transport concentrate owing to seasonal weather conditions;" To explain: Minto is the other side of the river from the main highway. In winter the river freezes and an ice bridge allows it to be trucked out. In summer, a barge is used to get it to Skagway. However, in autumn/spring there is a transition period when neither option works, and the concentrate has to be kept on site as it is mined (in a whopping big shed). The previous Capstone-negotiated off takes saw payment upon delivery at a port (I think Skagway). Until it arrived, no payment. That caused a big issue for cash-flow as a very large chunk of cash needed to be held back as working capital to cover those two periods each year. With the new deal, the Japanese pay at the mine gate. So even if it can't get any further until the river freezes/thaws, the Japanese still pay, then accept that delivery will be a while later. That is a massive bonus for Pembridge going forward as that working capital requirement has just evaporated. It's changes like this that will see Minto improve, and it's good to see they're already getting to grips with these various issues.

To give a bit of flesh to the bones here. If you look at the recent MD&A financials for Capstone, you'll see that Minto has historically generated around $100-150m per annum in gross revenue, almost entirely from the copper. This off take agreement gives the Japanese exclusivity - they get to buy 100% of the production for the next three years, or until 125,000t has been delivered (whichever is earlier). They pay market rates for that. The Minto concentrate is high grade (all that bornite) and much sought after, so in order to secure the deal the Japanese have offered to pay $30m in advance, as a pre-payment. That's about four month's production (roughly). After that they'll continue to pay for each shipment, so will end up paying around $300m or so over the three years (extrapolating from the MD&A figures). Think of it like a down payment in order to secure the deal. It's not a lot for the Japanese (in percent terms) but getting $30m now is obviously a massive help to Pembridge.

It was GEM that filed for Ch 11 protection, not Clinchco. That's now been resolved and that specific deal is back on, this time via a US listed co. It's supposed to be throwing off $2m per month, but as with anything SM related I'll wait to see the relevant SEC filing! But does show these deals can be done and are being done. And LH/MET have more $$$ firepower so as to get a bigger asset.