Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Baht - NogWig wasn’t saying the Omani deal is a mortgage the point was just to illustrate the distinction between short and long term sources and uses of capital
I agree. That is a more elegant explanation than mine!
I don’t have a detailed sources and uses but the cash they have (and to come from the capital raise) is enough to deal with the capital required to complete construction, my interpretation is that there will then be a short gap between starting production and incurring operating costs and receiving the first proceeds from sales which is a working capital need. It does seem a bit odd that you wouldn’t just fully find to the position where you are cash positive, however it’s not really a permanent capital requirement and so it is more efficient / cheaper to leave that gap and not fully fund with equity. You just have to be very confident that the debt will be available, realistically for this project that’s a probably fairly safe assumption and in the scenario in which it’s not that’s probably the least of our worries! Hugo (the chief commercial officer and was responsible for the Oman deal) spoke last night about the funding and clearly knows what he’s doing, it’s pretty much inconceivable that they’ve dropped a ball here
I went to the drinks last night. It was a fairly informal presentation/talk about the project (briefly, generally just what we already know) then quite a bit more detail on the financing. The circular should be out tomorrow, as the company is Australian incorporated they have to follow Australian companies law procedures and the ASX seems to be the primary ‘regulator’ so they have to vet the document - same as the UKLA would if it was on the main list in the UK so it’s a bit different to the normal tin-pot aim stuff. The details on the financing are already know and a bit more in the circular so no point going through those here. Overall the team is very pleased with the deal and rightly so, they are very positive and credible. I said I’d report back on the working capital point, they are confident that this will be a debt facility which is exactly what I’d expect. They say they do. It need more equity now, we’ve all heard that elsewhere but this may well be one that delivers on that
I would imagine that they will be able to arrange some form of debt to cover working capital. Smaller scale riskier miners will sometimes have to default to equity for this but BKY really should be able to use either an RCF / overdraft, or factoring or some other form of trade finance. It’s one of the questions I’m going to be asking this evening
Yes I remember well my days as a junior banker when I was regularly tasked with buying a single share the day before we put announcements out for clients THE ONE CODE IS NOT A THING!
I can’t see it
I’m assuming this will be out tomorrow now, it would be rather odd if it’s not released prior to tomorrow’s drinks. Are many people attending?
Email from the company has just said that the circular for the approval of the financing will be released next week with the vote at the end of November
I give up. The compliance issue is about wall-crossing and making people insiders. As you say they have a responsibility to all shareholders which cuts across your argument that they just need to get some major shareholders to sign it off. Btw being a plc has nothing to do with being listed There’s little point arguing about this procedural stuff as it’s just that and I assume that we actually agree on the stuff that matters which is that the deal is a good one and will happen
Yes of course they talk to them but the formal notification is the circular which has to go to all shareholders at the same time. Sometimes these things may go to bigger shareholders the day before if they are prepared to become insiders and will be restricted from trading until it’s released publicly. The compliance is a pain and on something like this I can’t believe it’s happening. I have no doubt that this will be agreed by shareholders but to state that it had been ratified when the circular hasn’t gone out can only ever be completely wrong as it’s impossible BKY being a plc is not a factor in this!
Not sure it has been ratified. We are still waiting for a circular and then there’ll be a formal vote - you don’t just go around and have a chat with the major shareholders
I emailed on 11 Sept to ask about timing and was told ‘I can advise that we expect documentation to be circulated during next month’ I don’t know whether that meant in the next 30 or so days or during the course of the next month which would be any time in October. It’s slightly frustrating!
Anyone have any idea when the shareholder circular for the deal will be released?
No. The announcement refers to shareholder approvals. One of these will be for the waiver of preemption rights to issue the shares another will be for a waiver of rule 9 (a 'whitewash') so that they don't need to make a bid when they go over 30%
Hopefully the existing institutions won't vote down the necessary rule 9 waiver
Cold fusion is decades away! All of the current generation of reactors use fission and will continue to do so for some time
I hold BKY and Greenland Minerals and Energy (Australian listed). The resource is primarily rare earth elements but there is also a significant amount of uranium that is extracted as a byproduct - high risk but worth a look, hopefully nearing the end of its permitting process which has been complicated by the uranium
Call me old-fashioned but I always thought H2 ran from July to the end of the year
Anyone seen this or know anything about it? https://politica.elpais.com/politica/2017/07/04/actualidad/1499180983_277153.html It seems very odd to me given the previous EU approval for the off-take agreement. Hopefully it's just some mis-information from environmentalists