Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Oofy: oh good grief. If you had actually gone through (and understood) the RNSs, you would not have posted as you had unless you did your reading with blinkers on.
It's not my job to educate you and I don't think your standing here is high. But insofar as my time permits, I'll try to correct the nonsense.
Re three asterisks: understood. This platform's algorithm achieves some very wonderfully inadvertent pieces of absurd censorship at times. We must forgive them, I suppose. They know not what they are doing.
Oofy: yes, amateur you are. It's good to agree. So first of all, you've obviously never had direct experience of reporting complex business interactions over time to the respective regulatory authorities. Pre-existing fixed charges most certainly do not take precedence over later charges when contractually agreed in the relevant manner. All you've broadcast is that you don't bother to read RNSs properly, don't understand how much you're missing by staying glued to Cos House (useful though it is to be aware of it), and haven't experienced cross-border commercial contracts at the Board level side of things.
All of that would be absolutely fine if it weren't for the fact that, despite not knowing your farce from your elbow, you insist on being relentlessly negative. If you're an amateur, then, no matter how articulate, have the decency to preface what you say with more caveats and, quite frankly, keep a more open mind.
As it stands, you just look like an off-the-shelf de-ramper who uses errors to mislead people. For that, you will of course continue to be called out.
Interesting couple of days, it's been, IMO. On the face of it, the Xmas leftover pigs in blankets were a turd filling (Alpha starting to float enforcement...) with a tasty but thin bacon wrapping (Aprelevka revenues, very pleasant but not exactly substantial enough). It's understandable that the market is cautious.
But Vast is Vast and there's always more going on. AP loves his wheeling and dealing. Not everything is quite what meets the eye. IMO.
My modest punt, fwiw, is that 2024 will not see the demise of Vast. Roughly a year ago, I said potentially a homeopathic punt. Now potentially a homeopathic x 2 punt. Vast always strikes me as a funny, squinky dog: doesn't want to run; doesn't want to die. It's been quite content for a long, long time just to do what's needed to grab a bone to live; but it wants more.
I'm very interested in the (soon due) Q4 BPPM report. That's still where the real money is, if it's going right.
Just IMO. (Certainly no advice!)
Oofy: you are relying on Companies House uploads, without paying attention to RNS information that has substantially and materially altered the overall position in the last *several* years.
Amateur.
Oofy: you're way off track. For a start, you have the wrong creditor: "if Mercuria decide to enforce their charge on or after 1 March".
Mercuria only have secondary security over BPPM, which is primarily serving as collateral to the Vast shareholder who stumped up the Bucharest real estate collateral for *Alpha* in the first place. It is *Alpha* who would be going in first, therefore.
Good grief. For all your consistent negativity, you aren't up to speed at all.
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Next: " Mercuria may be entitled to tell the banks not to take instructions from the Vast management, and take over the business".
We've gone over this months ago. You have a pie-in-the-sky, totally wrong, ill-informed, and utterly false impression that a creditor can just write a letter to a bank and secure enforcement without court involvement. You were shown up as very silly for arguing this many months ago. Do yourself a BB favour and don't bother to revisit this absurdity.
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Next: "There’s no benefit as far as I can see for the Zimbabwe Government in giving compensation for the missing diamonds. The Government will blame their predecessors if it comes to it, and the RBZ will doubtless claim sovereign immunity, so suing them won’t help, even if there were time."
It is sovereign debt. The State will still be liable. Unless you think ZimGov will go Bolshevik and renounce a liability, they'll be liable.
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Next: "If you think the process of negotiating the diamonds’ release has been painfully slow, imagine what the process of going to law against the Zimbabwe State will be like."
A foolish remark. I am the one who said, from the outset, that it could easily take 5 years. I gave Romania as a parallel, because I actually know how long it took from a favourable court judgment for Vast to actually getting the BPPM mining licence. You know this, of course, so you weren't really addressing me there.
As regards timeline for a simple suit for damages over a loss, that would be much quicker, IMO, than trying to 'uplift' the diamonds. No doubt Alpha know that - hence their change of tune - as does Vast.
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Give it a rest, Oofy. Your endless negativity is transparent and, though articulate of syntax, not that smart to the business situation.
Steward: you might be right, or else the Bank might be an institutional 'fall guy'. I think it's impossible to know.
In an interview, AP said it was politically sensitive, and an RNS referred to the discussion being delayed by election. But what does that mean??
My own view is that RBZ had legitimate reasons for wanting legitimate processes cleared up by the political masters. Whether those politicians are now helpful or not is unclear to me. But I sense that Alpha's patience with the excuse of delays due to elections just ran out. It might be that ZimGov are stalling; or it might be that they provided the necessary oversight promptly enough and it's now back with RBZ dragging *their heels*. We'd love to know, wouldn't we?!
So, it might be, as you indicate, that ZimGov just wants to tread gently around the toes of an old Mugabe throwback appointment. I quite like that idea, I must admit. But I think the risk remains that there's a blockage in the political sphere with higher echelons.
I just don't know: and very few people, I guess, really do.
Steward: "I think AP's strategy will be to play for time regarding the debt and get those production figures up."
Yes. Absolutely. I have thought from the outset that this was the proximate aim of leveraging the 'historic parcel' all along. An actual result would be great; but there has at least been this much all along.
If there's a discernible and meaningful process going on in Harare that can be demonstrated to Alpha and/or a court, then two things are possible: (1) Alpha will be willing to extend again without yet initiating enforcement over collateral; or (2) a Romanian court might well grant an injunction before endorsing any enforcement, as indeed might a UK court, in order to allow the Harare process to play out. IMO.
If there is not a meaningful and discernible process going on in Harare, and it's apparent to all that ZimGov are simply farcing around for no legitimate purpose, then Vast might have a very good basis simply to sue ZimGov for damages to the tune of the value of either the Bucharest real estate collateral (over €9m asset with ongoing revenues) or, at least, the value of Alpha's loan ($4.8m). In this scenario, fwiw, I think the British Embassy in Harare will not be unaware of what would in that case be transpiring. In this scenario, again, Alpha's recent shift of tone is as much a polite warning to ZimGov as it is a threat to Vast. Again, IMO.
If Vast were to feel compelled to sue ZimGov for damages, there would be some headlines in the local and investor press, if not more widely. I'm not sure that any stakeholders in the process have any interest in that - but money talks, so you never know.
This is all just personal speculation, obviously.
Urai5: no, not correct.
My phrasing ("somewhere in the ballpark of towards $1m") might perhaps be rendered into your native German thus: "Irgendwo in der Größenordnung von annähernd 1 Million US-Dollar."
(If the platform will cope with that...)
Nevergonnaretire: "and since we don't know how much the loan is, we can't extrapolate when it will be paid off in full back to lender..?"
I think a clue is in the 3-year window that Vast have been given to decide on whether to convert to equity in Gulf. It's likely IMO calibrated to about the time when dividends would come into play, after settlement with creditor.
Nevergonnaretire: "doesn't the loan (interest free) have to be repaid first before Vast begins to receive any monies".
I read it differently. The loan comes before dividends - but that's entirely standard. Vast's interest will only take the form of dividends if they elect to convert to equity share in Gulf, about which there's no hurry.
In the meantime, the operators (including Vast) will only be subtracting loan repayments on the basis of net operating surplus, otherwise the project would go bust. (Compare Mercuria settlement via BPPM: creditors do need to let the operation function...)
IMO.
Urai5: "your estimate of $1m annual net value".
Read again if you want to put words and figures into my mouth. I wrote (now third time): "somewhere in the ballpark of towards $1m".
Your calculation of my calculation of costs ($300k) is not a figure I gave or suggested.
Have a good day.
Urai5: read more carefully.
I ran the ballpark monthly calculation as $107,738. You will be pleased to know that there are 12 months in a year. 12 X that figure = $1,292,856.
But I scaled that down when I said: "I'd estimate the immediate annual net figure to be somewhere in the ballpark of towards $1m".
Some numbers for once.
"Vast will be entitled to a 10% share of the earnings before interest and tax that Gulf receives from its 49% interest in Aprelevka;"
i.e. Vast receives a 4.9% share.
In the immediate term:
"Aprelevka holds four active operational mining licences located along the Tien Shan Belt that extends through Central Asia, currently producing approximately 11,600oz of gold and 116,000 oz of silver per annum."
(Also: "It is the intention of the Company to assist in increasing Aprelevka's production from these four mines closer to the historical peak production rates of approximately 27,000oz of gold and 250,000oz of silver per year from the operational mines." Though that will take time.)
In other words, in the *immediate* situation, 4.9% share of revenues on *current production* of 11,600oz of gold and 116,000 oz of silver per annum.
That's an average *monthly* production of approx. 966oz of gold and 9,666oz of silver.
LME ceased gold and silver contracts in 2022 so one turns elsewhere for a ballpark valuation. Current market valuations that I am seeing around are ~$2,046 per ounce (gold) and ~$23 per ounce (silver). I'm open to correction, of course.
(966 X $2,046) + (9666 X 23) =
$1,976,436 + $222,318 = $2,198,754
of which Vast's 4.9% = $107,738 (gross), subject to any adjustments for terms of contract (shipping, impurities, tax, etc.).
I'd estimate the immediate annual net figure to be somewhere in the ballpark of towards $1m, with upside as indicated from project optimization. (I'd anticipate a year or two, easily, for the upside but it's then potentially in excess of doubling.)
Not a bad little earner. It's not exactly a game-changer for the Profit & Loss report, but it's helpful even as it stands.
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Not immediate but foreseeable:
"Aprelevka has three existing tailings dams that can be reprocessed containing high gold values of which two tailings dams can be exploited in the near term."
Obviously Alpha would themselves need to agree to that solution as it could not otherwise be mortgageable.
Obviously, I am wondering first of all if the shareholder who provided the Bucharest real estate collateral - very possibly a boutique hotel as Firwood's research plausibly found - would mortgage it. The asset is worth over €9m so easily enough to cover the $4.8m due to Alpha.
Aimgambler123: "They've had ample opportunity to call it a day, the fact they keep extending suggests they are expecting the loan to be paid off from the recovery of the diamonds."
They are calling it a day. They have indicated that they are reserving the option to litigate as of 1 March.
The issue now, in the absence of diamonds, is what other strategy the directors will employ. Litigation, if it materializes from March, will take a good while IMO - as I've said before. So they can potentially put something else in place.
The line breaks in my previous post are formatting glitches, where I copied in the company's text from the PDF of their AGM notice, downloadable these last several weeks from the website.
Nevergonnaretire: indeed, the last AGM gave headroom for another 1.1 billion shares. One or two posters have missed that. It won't solve the debt situation at this SP but, for the record, they do not need an EGM to raise.
The website contains the Notice of AGM from November 2023. Item 8, which passed, states:
"That the Directors be and they are hereby generally and unconditionally authorised pursuant to
the Act, to exercise all the powers of the Company to allot shares in the Company or grant rights
to subscribe for or convert any security into shares in the Company (“Rights”) up to an aggregate
nominal amount of £1,100,000".
The nominal SP is 0.1p, so £1.1m aggregate nominal amount is 1.1 billion shares.
The authority stands (unless varied) until AGM 2024.
ASI: "As an aside i have been reading up on the insolvency and bankruptcy legal framework in Romania in relation to defaulting on debts and Alpha starting insolvency proceedings and to be honest its well and truly drawn out and could take longer than just awaiting payment."
It's Vast Resources Plc, i.e. UK jurisdiction, that was indicated as the debtor to Alpha. Alpha have security by means of an asset in Bucharest but they did not lend finance to a Romanian entity, so far as we know. So Romanian insolvency law would not apply. It would be a matter of contract enforcement in Romania against a third-party asset only to collect security.
In turn, if in theory the Bucharest asset were lost - which, as you know, I've repeatedly said would take about two years in court IMO - then the party that stumped up that collateral could duly seek to enforce against BPPM. But that again would be an asset seizure, not insolvency.