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What liabilities? Who knows. The asset may have been sold but the legal shennigans stay with the company. Who knows what MA and AB did over the years to create liabilities. Blue Square was an example of what can appear. I'm not saying there is anything, but it really isn't worth the risk for JLP when they have materially the whole project.
There's no point lashing out at me. I've been 'stating the obvious' for months. The only difference now is that you believe it.
I can't see any point in JLP buying BMR. It's an expensive process to go through, given the thousands of small shareholders, for little upside. And JLP end up owning a company of questionable history. And JLP won't want thousands of additional shareholders to administer.
BMR only becomes worth anything if Kabwe is big, and JLP effectively already benefit from 92.5% of Kabwe (plus the return on their capital and their processing contract).
There is no chance of AB doing anything with SZ or Ester. He doesn't know how to. Nor does he have the development capital. He will just tread water hoping that royalties start to arrive.
Shareholders need to realise that they have effectively bought an annuity. Sadly, one that may or may not pay out, and one that has higher than average management fees.
I see no reason for good management to get involved with BMR. There are far better platforms out there. I see no reason for anyone to buy BMR, it has nothing much of value (there is no ability to control anything at Kabwe, so there is nothing for anyone to do).
I also don't see why any exchange would admit BMR. Why would anyone invest in the company? AB's track record is poor, BMR's track record is worse. What does it even need money for other than to keep it afloat. That's not a reason that companies should be admitted to the stock market.
BMR is now established for the long-term as a private company. BMRWatch should focus on getting answers and getting the cost base down to almost zero. Give up on any pretensions that allowing AB to invest in SZ or Ester or anything else would be anything other than a waste of their capital.
Frankly, all BMR qualifies for in this situation is a finders fee for the project. They have achieved precisely nothing. They don't have funding. They don't have a methodology / process. They were on the brink of losing the license. They have no management skills or mining expertise. The Zambian government has had enough of them. They don't know how to build a plant. They don't know how to reinstate the land and build the new tailings site.
You get value if you add value. Where was the BMR value add?
Sure, there is a lot of metal in there, but it was only ever going to be a pile of dirt with BMR in charge.
I don't think your maths are right, KlueLoss. JLP don't just get a flat 20% return on their initial investment. I think they are looking for an IRR of 20%. So, 20% keeps compounding on whatever is outstanding until they are paid back. So it depends on how quick they get to profitability and recover their cash. So, my guess is that it is more likely to be between $25m and $30m off the top for JLP. That assume it takes between two and three years for JLP to get paid back. Which is pretty quick.
The other problem is who is going to check what costs are charged against the project? This mechanism is open to abuse. For example, will JLP be allocating central costs against the Kabwe project? Who is there at BMR to check the calculations? Nobody.
Agreeing a royalty on profit instead of revenue was daft.
Rofert, if you think administration is a serious risk you ought to think about whether the shareholder group can influence the appointment of the administrator. Doubtful, to be honest. If AB and CB are still around to appoint a 'friendly' administrator, the only chance of a proper investigation into their activities will be gone. Part of the role of an administrator is to investigate the behaviour of directors, including looking for transactions at undervalue, and where necessary recommending a DTI / SFO investigation. It's one of the reasons why I now don't think that AB will resign. He will want to see the company carry on for at least a couple of years, or, if not possible, pick the administrator from his contact book.
I'm guessing that pride might get in the way of Vigenere signing up.
Voluntarily leaving AIM does require shareholder approval. However, a company needs to fulfil certain obligations in order to maintain their listing, one of which is having a NOMAD. So, no NOMAD, no listing. Seems to me that the delisting event was engineered.
BMR is still a PLC (as far as I am aware), but just not listed on any exchange. The directors are free to do anything that they think is in the interest of creditors and shareholders. Tough to prove that this isn't in shareholders interests.
Most things requiring shareholder approval relate to things like individual class rights, and indeed switching from a PLC to a Limited company. As long as certain shareholders are not getting preferential treatment (which seems unlikely) then I doubt AB has done anything wrong.
TBTT
I would be interested to know the annual throughtput of the planned plant, together with an estimate of the operating costs on a per tonne basis. They will probably dodge the second part of that question, but will know the answer to the first part.
I know, right? But I am sure AB has taken advice. A key part of the plan appears to have been contriving a delisting event and then moving before shareholders have a chance to stop anything. I still wonder if AB has had to extract himself from a very dodgy legal position with JLP having not disclosed the loss of the license at the time of the original deal. Perhaps this is the price.
It is now possible to stay afloat. BMR will be not much more than a postal address. Once the next audit is out of the way, it can be run for < £10k a year plus whatever the BoD gets paid. (ignoring potential for legal fees!). It has nothing to do other than file statutory documents and wait til JLP is operating at the site. It will be interesting to see if the BoD still sees fit to pay themselves much at all.
No, I never invested. I didn't think JH's method would work and then had (and still have) license worries.
"If JLP spend as much as they state they may need to then royalties won’t kick in until they’ve made £18m. That could be quite sometime."
I think it is much worse than that. They need to make 18m clear profits PLUS cumulative interest at 20%. So, 18 becomes 21.6m after a year, 26m after two years. This looks a pretty complicated set up and I'm not really sure how on earth it will be computed. But I would think the details have been figured out.
I was expecting a royalty deal, but that is a particularly bad one. JLP has to make a 20% IRR before anything is payable. It is very possible that BMR will not see a cent. A royalty should be payable on revenue, not on profits. AB has outdone himself here.
Perhaps there is an AGM coming up for one of his other companies. He'll be there.
KlueLoss - I am certain that AB engineered the delisting. A lot of people called it weeks ago, it's just hard to really believe that kind of stuff actually goes on. AB is just trying to get out of this as intact as he can.
Edzi, that's something of an overreaction to a very reasonable point.
Visitor, you are right to be cautious on the timing. JLP has missed most deadlines to date (probably deliberately, due to the uncertainty around the achievability of the license conditions, and the state of BMR) and three months is no time at all to build and commission a zinc circuit. Unless it is really, really small.
So, I would still have concerns about meeting the license conditions and I would expect JLP to not want to be working to that tight a timetable. I would have thought that Leon will be looking for comfort from the authorities before pushing ahead with that tight a schedule. No way should he commit £1m of shareholder money (or whatever it is) before getting comfortable that the license won't be pulled. However unlikely at this stage.
BMR is an irrelevance and has been for months. JLP needs to focus on the ministry. JLP has not been taking its time in order to strenghten its hand against BMR. It is waiting to see if it can get a license with manageable conditions.
Don't rush to buy more JLP just yet.