Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Phil: this sounds like the most likely scenario alas.
So I have a suggestion, and it would be good to hear what others think, especially Looed.
Maybe we can petition the court, as shareholders, to say that we don't want to be eliminated (ie liquidated). That we are honest investors in what we thought was an upstanding company with wonderful prospects. But now we know we have been shafted. So we will have a whip round and pay the debts, if the court, in return remove the liquidation and give us control over the company. This may sound ludicrous, but is it?
Otherwise we just sit here and await our fate (probably already sealed).
The facts are that the Company we own has just been liquidated. This is the end. Are we going to just do nothing? We have listened to the Company for years and done nothing. If we don't do something now, then we will never get a chance. It may already be too late. I don't know. Thoughts please.
Excellent measured post Looed. Thank you for this and for sharing what you know and your opinion on it and for your on-going efforts.
Yes Tsbs, the most obvious outcome now is that, having cleared all the debts and obligations (including to us) they sail off into the sunset with the asset, purely for their own benefit and this was the plan all along, with the communication via Looed just to keep us all from causing any problems.
The one caveat to that conclusion, in my opinion, is the fact that they are still communicating with Looed. The liquidation has now happened and so we are history, so why continue to communicate? That gives a smidgen of hope that there is some way around this that still involves us all.
Monti: good logical post.
I asked the question I posted earlier of a mate of mine who knows a bit about liquidations (he is also an FRR shareholder). So: can a liquidation be reversed? He said "not really unless the Directors step in quickly and petition the court." He then outlined potential other scenarios from here and said that much is possible, but can't see us being involved in them.
A petition seems unlikely as SN knew about this well in advance and it would have been straightforward (with no risk) for him to have stopped it happening.
Good morning Looed
Many thanks for sharing the latest message and so quickly, especially bearing in mind the news that Ziggy sleuthed yesterday. It would be good to know if anyone has the knowledge of whether a liquidation notice in the Caymans can be reversed? If not, I don't see how we can still be in the game.
I hope I am misinformed or misreading here, but FRC have just had liquidators appointed. Our shares are in FRC. So is that the end of this miserable journey? I hope someone is able to correct my error here...?
Looed: can I just echo the views of Bedex and Contra?
Please ignore Pyro's rant.
If I hadn't met him and know he actually is genuine and wants this to come good, then, given what he has said, I would think otherwise. But he has clearly gone completely bonkers here.
The overwhelming majority of people on here do not share his suspicions/views/conspiracy theories/whatever, so please ignore what he has said and carry on doing the great generous work you are doing.
Thank you.
Good morning Looed
Many thanks for obtaining, and sharing, the Company statement. Good to have that reassurance.
Re your list of unresolved cases, isn't there a Yellow Jersey (or whatever they're called!) one too?
Good point Looed; thanks!
Thank you for sharing Looed.
No surprise here; do we ever settle a debt? Given this I think we all now can guess the answer to whether the monies owing to GOGC was paid in September ... :(
Thank you Looed.
I must confess that as a holder of a large number of shares in FRR I somewhat take offence at the second part of the (otherwise welcome) communication.
What do they expect when they don't communicate with us?!?!
We have invested huge amounts of our hard earned monies in this Company, keeping them afloat. They do not communicate with us via appropriate channels and, I'm guessing, do not follow proper procedures, in that surely we should be having AGMs and voting on resolutions. They tell us nothing, so it is completely understandable that some of us will try other avenues to find out what on earth they are doing with our Company; the Company we own!
To then issue threats is unacceptable and not ethical imo.
Apologies if this of off the mark, but I am really p***ed off at this statement.
Ahead of the game as always :). Thank you.
Looed: would you be happy/able to ask you contact at the Company if the monies have now been paid to GOGC and whether we have now had the PSA extended as a consequence?
Hi Looed
You should be able to download them from here. The link is to the right of the 2023 interims.
https://www.gogc.ge/en/investors-overview
Copied from the 2022 accounts (part two - final half):
"By way of the Consent Letter dated 11 November 2022, SAOG and the Company approved the
assignment (“Assignment”) of all interests, rights and obligations of Frontera under the PSA to Frontera
Resources US LLC (“FRUS”), subject to certain conditions including a full and final release of Frontera
by SAOG and GOGC from any and all of their claims in the liquidation of the Company arising out
and/or in connection with the PSA, which claims (including obligations and liabilities) have been
assumed by FRUS.
On 14 November 2022 SAOG and GOGC, acting on behalf of the Government of Georgia, on the one
part, and Frontera Resources Corporation (“FRC”), a Houston, Texas USA international oil and gas
exploration company and FRUS (wholly owned subsidiary of FRC) signed a memorandum of
understanding (“MoU”) setting forth their mutual agreement regarding the assignment of the rights,
interests and obligations of Frontera to FRUS. According to the MoU and the FRC and FRUS are
imposed to pay to the Company all sums ordered to be paid to the claimants by Frontera and FRUS
under the Arbitral Award and reimburse damages arising out of non-sharing by Frontera of the
Petroleum produced from the Contract Area. Prior to the date of the payment the Company will
continue operating on respective Contract Area.
Georgian Oil and Gas Corporation JSC
Notes to the Consolidated Financial Statements for 2022
24
According to the arbitral award and MoU, Company has right to claim GEL 16,488 thousand from
FRUS. The receivable is treated as originated credit impaired accounts for balance at nil. Receivable
should have been paid in November 2022, nevertheless due to non-repayment payment term was
prolonged till 15 September 2023."
Copied from the 2022 accounts (part one):
" In July 2018, the Company and SAOG (State Agency of Oil and Gas) submitted their statement of
claim against Frontera Resources Georgia Corporation (Frontera). SAOG and the Company inter alia
are claiming that Frontera has materially breached certain provisions of the PSA (production sharing
agreement) including but not limited to the obligation to relinquish approximately 99% of the Contract
Area.
On 17 April 2020 the Arbitration Tribunal rendered its final award (the “Arbitral Award”) as to the
matters in dispute. The Arbitration Tribunal upheld the Company’s and SAOG`s interpretation of the
PSA as it defines the parties’ respective rights and obligations. The Arbitration Tribunal ruled inter alia
that the respondent - Frontera committed a material breach of the PSA by its refusal to relinquish and
return to the State the exploration area. According to the Arbitral Award, Frontera is obligated to
reimburse the amount of the mineral usage tax paid by the Company on behalf of Frontera as well as
the costs incurred by the Company in the arbitration proceedings, with a total amount of
GEL 18,522 thousand. The Arbitral Award is final and binding on the parties, in accordance with its
terms and the PSA.
On 13 January 2021 an order was made by the Grand Court of Cayman Island pursuant to which the
liquidation of Frontera has been brought under supervision of the Grand Cayman Court and the joint
voluntary liquidators thereof were appointed as joint official liquidators (JOLs) of Frontera.
On 10 February 2021 JOLs made a declaration of Frontera’s insolvency.
The JOLs entered on behalf of Frontera into the letter agreements (the “Letter Agreements”) with the
Company and SAOG dated 25 June 2021 and 25 August 2021. The Letter Agreements set forth express
agreement of the parties that the Company and SAOG take over with the immediate effect the Contract
Area (as this term defined in the PSA), all Petroleum Operations (as this term defined in the PSA), and
the production therein (including disposal of the Petroleum (as this term defined in the PSA))."
Good morning all
I have been checking the GOGC website daily for the past few months awaiting the publication of their audited statutory annual accounts for the year ended 31 December 2022. The reason for wanting to see these accounts is to understand what the latest disclosed position is in relation to the debt owing to GOGC by Frontera. Some of you may recall that in the statutory accounts for 2021 it was reported as purely a note to the accounts under "litigations" and mentioned the debt but ending with the rather ominous sounding statement "On 10 February 2021 JOL made a declaration of Frontera's insolvency".
The update in the accounts for the year ended 31 December 2022 is rather interesting (even to a non accountants!). It appears under receivables on pages 22 and 23, although I will endeavour to copy and paste it on to here directly. Before anyone gets too excited, my reading is that the debt is included in receivables at nil value. So this begs the question as to why it has been reclassified from a contingency to a receivable. (For non-accountants: disclosing a debt as a receivable reflects that the debt it more likely to be recovered than when it is classified as a contingency). If there are any fellow accountants who can provide an explanation that would be most welcome.
It also states that the debt of 16,488,000 GEL (just under £5m) was payable by FRUS to GOGC "in November 2022, nevertheless due to non-repayment payment term was prolonged to 15 September 2023".
Now, the date of these accounts being signed off was 12 September 2023. To explain the significance: despite including all the figures as at 31 December 2022, they would reflect any significant matters that had happened up to the date of sign off. So we can assume that the debt was still due on 15 September at the sign off date.
At the same time they have also published the interim (unaudited) accounts for the six months ended 30 June 2023. Tantalizingly, these are signed on 15 September 2023 and there's no mention (I can find) of the debt. So my assumption would be that it still hasn't been paid.
So, what does this all mean? Well my interpretation is leaning marginally towards the positive as (as at 12 September 2023), GOGC still expected Frontera to pay the c£5m debt, and once it had been paid, permit Frontera to start drawing oil/gas again. (My reading is that GOGC have been doing that in the meantime). And the timing of the scheduled debt repayment suggested Frontera expected to be in a place to repay, presumably having come out the back of all the court cases. Sadly our assumption now has to be that they're still not there yet.
Would be really interested to learn others' thoughts on all this. Would also appreciate others going through the accounts in case I have missed anything.
Dulwichman: very interesting potential consequence; thanks for sharing your muses.
I hope you are keeping well.
Abkaz: I too have a life changing amount "invested" here and I agree that it is just not acceptable for the Company to not communicate with us; they have behaved abominably and continue to treat us with disrespect with their silence. So your ire towards them is understandable and well directed.
However, where I do disagree with you is in your remarks about Looed, who has not only worked tirelessly on all of our behalf, but also very generously shares what facts he does manage to glean. For me, he has provided a beacon of hope for us all.
No problem Baramara.
I was communicating with Bryce Linsenmayer who was at Taylor English at the time (I believe he may be working elsewhere now). I sent details of my holding and then I had a communication back from info@frontera-resources.com answering my original question, but which said first "after verifying your holdings".