Member Info for rustybucket

Its quite clear that the company has short term liquidity issues, otherwise they wouldnt raise an extra 25m, they wouldnt also have received money up from from gazbrbank or whatever they were called.

These bonds are more aligned with the repayment schedule of IRC, and with the extra processing facilities it should help increase profits over the longer term.

But, anyone thinking this company is cash rich and can easily pay existing debts AT PRESENT is living in clound cuckoo land.

But it is getting stronger and hopefully before the end of the year we can see a share price starting with 2 digits before the point. Something we have not seen in a long long time.

Bonds are extended for 5 years with slightly lower coupon on higher share price conversion. I dont think its as bad as you make out.

If IRC can prove they can make enough money, to repay their debt, and show a profit, then 2 things can happen, the share price increases rapidly, or one of the big boys get interested.

K&S OPERATED AT 97% CAPACITY IN THE FIRST HALF OF MAY
VANADIUM JOINT VENTURE RECOMMENCED OPERATION
Tuesday, 11 June 2019: IRC Limited (“IRC” or the “Company”, together with its subsidiaries, the “Group”; Stock Code 1029) is pleased to announce that its K&S mine operated at close to full capacity of c.97% in the first half of May 2019. Meanwhile, IRC’s vanadium joint venture with Jianlong has recommenced operation, providing a diversification to the product mix of the Group.
Iron Ore
K&S has made good progress in its ramp-up programme, and its production volume has increased, as most of the bottlenecks have been removed. The mine and beneficiation plant successfully operated at an average capacity of c.97% in the first half of May, demonstrating the ability to operate at its full capacity on a continuous basis; and May’s monthly production was another record of c.86% capacity. Production in the second half of the month was lower
than the first half because a design fault in the gearbox in one of the crusher’s feeder, which caused a breakage and resulted in a daily production drop to c.50% for a period of a few days.
The damage was swiftly rectified, and the production levels returned to >90% in the beginning of June after the rectification of the defect.
Vanadium Pentoxide
Having successfully sourced feedstock from China, IRC’s vanadium joint venture (46%) with Jianlong Steel has recommenced operation and this diversifies the product mix of the Group. The joint venture had been moved to care and maintenance in 2017 as the operation of this steel-slag reprocessing plant was suspended, due to a lack of feedstock.
– 2 –
Commenting on the news above, Yury Makarov, Chief Executive Officer of IRC said:
“I am pleased that K&S had a positive period of operation, with the mine and beneficiation plant running at close to full capacity in the first half of May. It was annoying that the problem with the crush feeder affected our production volume in the second half of the month, but the good news is that it has been resolved. K&S achieved a monthly production record of approximately 86% of the design capacity, and it is encouraging that the good operating
result coincides with a strong iron ore price environment.
Recently, the 62% iron ore benchmark price has increased to its five-year high of over US$100/t, due to significant supply disruptions around the globe. At the same time iron ore stockpiles at the Chinese ports have fallen to their lowest level since 2017, thanks to near record production rates at the Chinese Steelmakers. It is hopeful that these drivers will continue to provide support to the iron ore price.
I am also pleased to report that the vanadium joint venture is back in production. We are working with Jianlong Steel, our joint venture partner to bring the plant up to speed, so as to provide a positive contribution to both parties.”

KRSS, Cash flow hedge arrangements

In order to increase certainty in respect of a significant proportion of its cash flows, the Group has entered into a number of gold forward contracts.
Forward contracts to sell an aggregate of 200,000oz of gold matured during the 2018 and resulted in a US$(3.4) million net cash settlement by the Group (2017: US$0.8 million cash contribution to revenue from forward contracts to sell an aggregate of 212,501oz of gold). The Group constantly monitors the gold price and hedges some portion of production as considered appropriate. Forward contracts to sell an aggregate of 200Koz of gold at an average price of US$1,252/oz were outstanding as at 31 December 2018. Forward contracts to sell an aggregate of 133Koz of gold at an average price of US$1,252/oz are outstanding as at 24 April 2019.

as far as I am aware they still have a lot of gold hedged. It would be futile not too, as this nearly brought the company down previously.

That is NOT what they are seeking. A lot of companies do this every year, including IRC last year, it only lasts for one year. And can help them if they are looking at maybe an all shares transaction.

They are NOT saying they are going to do a share buyback. That would, in my opinion be futile as the first concern is to repay their loans. I do not believe we are in that position YET.

to see this company in this situation. I remember commenting on how everyone though Harriet green was the "messiah" she sold off the family silver, that was profitable,brought in her mates, then got out as her "transformation" wasnt as easy as she thought.

But, she was hailed as a hero. Not blaming her for all this mess, but I never thought she was as good as other people.

I hope this company can make another turnaround. People need to remember that a large amount of the loss was "writing off goodwill" thats paper loss not pounds and pence.

Hope this turns around for all of you.

b) Nature of the transaction Disposal of shares Price(s) and volume 8.3654 pence 681,818 Alya

The bondholders, have the option to convert, which I would imagine they would, as if they didn't they would only get initial amount back.

My reading of this is, the company would only have to pay the extra amount, if they stopped holders from converting.

If bond holders decide not to convert ( unlikely ) then they ( in my opinion ) only get their invesment amount back.

IRC still needed c.US$3 million for working capital purposes. Also, the remaining c.US$5 million will be drawn as and when required for working capital purposes.

The repayment schedule of the Gazprombank facility, which is still guaranteed by Petropavlovsk, is more closely aligned with the production plans of K&S than was the ICBC loan.

So that suggests that not only sare they not making good money, yet, they still needed working capital going forward.

Lets hope Iron ore keeps up a good price and they make the expected savings from the completion of the bridge.

PVX233, I dont think its broker forecast its NAV, If you read the report you have so kindly reproduced.

Thank you.

I presume you don't know what EBITDA means ??? And selling IRC stake, you forget we are guarantor for the borrowings and I am sure we cant sell unless any buyer takes over our guarantee which I feel is highly, highly, unlikely.

PVX233 you say They've just received 60 million. More than enough to deal with the bond issue next year. How ??Love to see your calculations.

Polymetal, offered to buy POX hub for a paltry sum. It was rejected out of hand.

If pox hub is successful. They might want to try again, but this would be at multiples of prevailing share price.

From the article you post relating to " spare capacity" of POX HUB..

Strategy
If POX continues to ramp up successfully, the business will need to find ore sources for the autoclaves. Presently, because the concentrate grade from Malomir is much higher, it takes up less room and there is additional space in the autoclaves. To fill this, POG has initiated a tender process to toll treat ore from other operations. They have had conversations with six interested parties and will lock in an agreement as a priority. There is also more that can be done to provide material from Pioneer and Malomir.

The grade of the concentrate going into the autoclaves dictates the space taken up so in theory you can prioritise higher grade concentrates in any 3rd party stream allowing POG’s own operations to take up the slack. Third party concentrate ranges from 25g/t – 65g/t which makes a big difference to economics of POX because it doesn’t take up much room. Generally this spare capacity at POX is, we believe, underappreciated by the market. We believe that a coherent strategy with analysis of the various options to fill it will be a strong catalysis for the shares delivering upgrades to consensus earnings and cashflow.

Full market capitalisation is less than what it cost to build pox hub. Looks very undervalued once we get bondholders sorted.

was there not rumours Polymetal had offered $100m for the pox hub, which was rejected. ??

who is saying pox hub is not useful processing plant. ??

It allows POG to process there own concentrate and other peoples. Other companies have wanted to fund part of this to get use from it. They wouldnt offer this if it wasnt valuable.

See below, unfortunately, I cant answer that question, but, companies were willing to fund the pox hub facility so I would suggest it might be very worthwhile.

§ The Group is on track to commission the next two processing lines of the POX project in June 2019 once availability of third party concentrate for processing is secured