Member Info for OofyProsser

It might be instructive to look across to the UKOG site today. Their GM, called to approve the issue of more shares, has been postponed. In spite of the reason they give for the postponement, it seems more likely they hadn’t got the required votes. They’re clearly in trouble. Vast hasn’t got the leeway to postpone its GM.

Yes, HITS, but not merely material - existential. There will have to be an RNS this afternoon or on Monday morning.

Do I see someone on here thinks the monthly running costs are £200,000? The monthly interest charges, factoring in the fees and charges for rolling over/not rolling over the existing junior loan, must amount to almost this sum. The operating costs involved at Saltfleetby must be double his £200,000 - they still don’t seem to have got it right. And every week the field gets marginally more depleted. They’ll be trying to save up for a “new” compressor this year and another well by Q1 2025. Not much chance of that with gas at current prices. They’d better start thinking about drilling it now if they want it to come in on schedule. Even we Martians were disappointed at the length of time the last one took and the huge cost overrun. I’m not sure that Saltfleetby is washing its face when the capital spend is added to running and finance costs. People will start reverting to the Poundland moniker soon.

Asimpleinvestor: yes. I’ve only followed AIM companies for four years but I’m not aware of an occasion on which a company capitalised at £3.9mm. managed to raise $10.4mm. in the equity market by a share placing, whether it was part of a capital reorganisation or not. And the money raised is not even to invest in some great new thing: it’s to repay debt, and to top up the coffers to keep the Directors interested for another two or three months. Maybe it’s commonplace and I’ve just been lucky enough to miss such investment opportunities. I just can’t see it happening though and I’d be surprised if the lenders can either. They just want to be paid their money from the promised proceeds of the sale of diamonds whose status has morphed from myth to comic opera. These diamonds need to be magicked up, somehow - in short order.

Kever: perhaps you’d be good enough to remind me where in Europe these PGM’s are going to come from? There is virtually no substance behind any of the supposedly reassuring potential developments which might enable Vast to avoid this share consolidation and subsequent huge share issue. If the lenders want all their money back on or shortly after 29 February and this share consolidation is the route by which Vast thinks it will achieve this, I’m afraid investors’ remaining capital here is at risk.

It seems to me that shareholders have no option but to vote in favour of the resolutions, if they want they want their shares in Vast to retain any value at all.

There is a lot of detail which may merely qualify as obfuscation in the RNS. The important take-outs are the 1 for 6 consolidation and the alternatives should shareholders not approve it.

The 1 for 6 will enable Vast to issue more shares, in order to repay the $9.4mm. that Vast owe to their lenders by 29 February and another $1mm that Vast need for working capital (in other words, they’ve got little or no cash left). Forget the valueless shares that they’re proposing to issue . If someone can explain their relevance or value to me, I’d be grateful.

There is no telling what price the shares will go to once the consolidation has taken place. The number of shares that Vast will have to issue, if the share price remains where it is, is about 2.2bn. (assuming they could issue the new shares at the prevailing market price - in itself a tall order). Or considerably more than twice the number of the existing consolidated shares. Who is going to subscribe for these? How much less than the full $9.4mm of their loans will the lenders be prepared to accept, on or shortly after 29 February? And how long could shareholders expect the $1mm of new working capital to last? There will be arrangement fees on the share consolidation and subsequent capital raise.

I can’t see how Vast will raise the full $10.4mm. they’re seeking. In which case, it seems to me the only basis on which Vast’s lenders will enable Vast to continue In business as presently constituted is if they can be sure that Vast shareholders will continue to stump up more money every 2-3 months to pay the bills. The lenders may already have buyers lined up for the assets in the event that Vast doesn’t seem likely to pass this test. If they haven’t, it’s hardly an endorsement of the value of Vast’s assets, is it?

I may be missing something, but this GM and proposed consolidation seem to me to be a last-minute attempt to get a short reprieve for Vast. The consolidation changes nothing, other than to allow yet more share placings. These placings are unlikely to meet the debt payments at any stage in the near or medium term future. Shareholders will merely be stumping up yet more money to keep the lights on and salaries paid.

Please tell me is I’m missing something. But please don’t mention diamonds. Or any of the vague optimistic statements offered early in the RNS.

If the VAST NAV is £200mm. (or $ even), why does the Board not sell 5-10% of them and clear the company’s debts? Yes, the answer is, that’s not a realisable figure, or anything like it.

No, there’s also tax and interest payments, plus the fees attached to all these bridging loans and on the prospective new loan deal. The Trafigura offtake price is likely more than to offset the lower interest rate on their proposed loan. Then there’s the royalty to be paid to Mercuria, assuming they’re not to be paid a lump sum in settlement. The sidetrack last year appears to have cost in the region of £12mm. Angus were at pains throughout to emphasise how comprehensive and superior their drilling preparations were to earlier sidetrack attempts, they’ll be lucky if they manage to avoid similar issues in the future.

And the Global Re-Financing hasn’t appeared yet.

Zac1426: who says we’re led to believe this? The sale of a parcel of exclusively industrial diamonds would hardly raise the sum Vast needs, would it? And no, if they’re all industrial diamonds and she knew it, I don’t think Mrs Mugabe will have been interested in them.

Sandy: this is my last reply to you. You’re just rude and abusive. Your answers are irrational.

First: “agreed a way forward” is equal to enforcing the order to deliver to Vast the diamonds that it owns, is it? Really? For the sake of clarity, my view is that enforcing the High Court order means Vast getting hold of the diamonds within a very short period of time. Vast have made no apparent progress on this whatever in nine months.

Second: the Reserve Bank of Zimbabwe does enjoy sovereign immunity. You can’t prosecute it or its officers in the courts (and if you could, judgment would most likely be in their favour). And if you could and you won your case, you couldn’t enforce the judgement. Vast has tried to enforce an order of the High Court and has been given the bum’s rush.

Third: justice delayed is justice denied. If this thing can go on for year after year with no one knowing when a court order will be complied with, what is that order worth? Vast can easily go bust in the interim. That’s the effect of dealing in such jurisdictions. Vast needs the money it would get from the sale of the diamonds. It has no way of getting them.

I hope I’m wrong. It’s quite possible that the diamonds’ absence and the RBZ’s unwillingness to restore them to their owner has nothing to do with Mrs Mugabe or anyone else. However, if they’re there, it’s in everyone’s interest to expedite their delivery to Vast. You appear to think its quite natural that it should take year after year for someone to go down to a vault and get the diamonds and deliver them to the accredited owner at the ground floor counter. I don’t.

Your final remarks are merely ignorant and insulting. I shan’t waste any more time on you. A green box will replace any further comment from you on my message board.

Yes, HITS, £5mm, according to the latest (19 January) RNS. As understand it, the bridging loan interest is payable in a lump sum at maturity. What interest Mr. Forrest’s deferred payment terms attract, if any, is unknown - at least, to me.

Sandy: where’s the falsehood?

steward1: I agree. There’s nothing to be gained by RBZ in not complying with the High Court order. So why haven’t they? The reassurances you’ve been offered come from Vast. Well, they would say that wouldn’t they? I agree that there’s no evidence that Mrs Mugabe walked off with the diamonds, but she has a house and a diamond cutting business in Hong Kong, where she also enjoyed diplomatic immunity while her husband was President. And she loved diamonds. There has been a heap of speculation over the years about their pinching diamonds from the diamond fields and taking them in their diplomatic baggage to Hong Kong and Singapore. It’s quite possible the Vast diamonds are still there in the RBZ. I understand why you would think so. If they are, why have they not been restored to their rightful owner? To do so would be a win-win, surely?

Firewood:

I missed these other messages. I should say that if they have net profits anywhere near the levels quoted in these posts, Saltfleetby would be bankable, they wouldn’t need to go to the sharks in the commodity pool for finance.

Sillybuttons: yes, there’s no doubt that if he agrees to take shares in lieu of cash in settlement of the outstanding sum, it would be a great vote of confidence. Sadly, I rate the chances of that happening as vanishingly slim.

Ocelot: Mr. Herbert has not completed the 5-year £20mm Global Re-Financing. He can’t turn his attention to anything until he knows what terms have been imposed. I wonder if he’s even in the room when negotiations are being conducted. And we won’t be getting answers to monthly Investor Questions, so we may not get a progress report until the lenders have concluded a deal to their mutual satisfaction.

The Earl of Lucan resigned on 29 September. Effective, I believe, at the end of October.

Is all the gas flowing through the permanent flowline now?

HITS: I think we differ on the Board’s commitment to Mr. Forrest. I think if there’s a choice between paying him out or saving the money for investment in another £12mm well/sidetrack, they’ll take the former course and raise money some other way. It won’t make much difference to shareholders but will make a great deal of difference to Mr. Forrest. But in any case, in the absence of a nice big rise in the gas price and a decent reliable gas flow in excess of the forward contract volumes, Angus is completely in the hands of its lenders. Whatever Mercuria, Trafigura and Aleph come up with, Angus will have to accept. Horse trading, salami slicing etc. while the poor Angus Board is over that barrel again. The noble Lord Lucan must be pretty glad to be out of it. Mr. Herbert could find himself made a Herbert of (if you’ll excuse the syntax).

Possession of a High Court order doesn’t mean much, does it? There’s no means of enforcing it. This is an extremely corrupt country and the Reserve Bank enjoys sovereign immunity. Even if the diamonds haven't accompanied Mrs. Mugabe to her Hong Kong diamond cutting business, and they’re still on the shelf at the Reserve Bank, if the latter doesn’t want to part with them or with their monetary equivalent, there’s nothing any foreign business or individual, or any Zimbabwe lawyer, can do about it. As for big mining companies being put off investing in Zimbabwe by the failure of the RBZ to deliver up to Vast the parcel of diamonds, that’s a bit comical. Every potential big investor in Zimbabwe knows the score.

Ocelot: I think we should await the terms of any new debt agreement before assuming Angus have got spare cash to pursue other avenues. Most of the new loan will be going to repay the bridging loan and and Mercuria loan, and the debt to Mr. Forrest. The £3mm or so excess, spread across all these other prospects, would not go far, even if Angus didn’t have to finance a new compressor and a new well in the next twelve months. Meanwhile the field is depleting already. The gas price is not supportive, the hedge price for the Spring/Summer months is in the 30’s and they still haven’t got the existing wells anywhere near the planned output. The terms of the Mercuria loan came as a shock (once people understood what the hedges meant). It’s all very well to parrot what the management of an AIM company says but it doesn’t count for much when the company is in trouble and the list of disclaimers is so comprehensive, does it?

Simonalexsmith: no, I can’t recall any such undertaking either from Lord Lucan or from Mr. Herbert, merely statements that they understood shareholders’ dislike of constant dilution and would try where necessary to raise debt capital, once cash flow from Saltfleetby made debt affordable. Sadly, Saltfleetby is a bit of a disappointment so far and Angus really need this Global Re- Financing in order to be able to meet their existing debt obligations. As long as Angus can meet its debt interest payments, whether from cash flow or share placings, the lenders will probably keep it going but if Angus can’t meet debt capital repayment schedules - which they can’t currently - the lenders will want a higher income from their investment. It’s unlikely to leave a lot for shareholders. If Angus is perceived as unable in the medium term to meet its interest payments and can’t raise equity finance to cover them, all bets are off.

“Apparently AP spotted outside RBZ...”. Been given the bum’s rush again then.

Apologies, that was not quite correct. Angus doesn’t have a footing in the debt talks at all, in my view. It’s all between Mercuria, the Aleph consortium and Trafigura. Angus will have to take whatever terms are given, if any. The fact that’s it’s taking so long suggests a lot of horse trading is taking place.