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Although, one caveat to my previous comment. It is possible that BMR has sold additional shares to provide cash to settle other ordinary operational creditors - you know, stuff that they had actually accrued for on their balance sheet as opposed to 'out of the blue' creditors. As an aside, I wonder if BMR will have to restate their accounts for not having previously accounted for the BS debt. I almost assume that BS now stands for Bull Sh*t.
I wouldn't read anything into the use of the plural.
BMR will have the disclose the proceeds of the sale and, I would have thought, the number of shares sold. If not now, certainly in their next interim or annual preliminary statement. The shares were an asset on the balance sheet which will be valued based on the share price at the balance sheet date. So they may as well tell all now. I wonder when BS gets paid. Surely not yet?
That's true. I'm not one of those that thinks JLP will try and buy out BMR. Unless they are much further forward than I am aware, they have no way of justifying a value that would make any sense to BMR. And why raise additional equity at the current JLP share price? It would make much more sense to make the project work and grow shareholder value from there. So, I think that JLP's only focus is on making the existing arrangement work for all. I would love to see their projections for operating costs (and Vanadium). Then everyone would finally know what is possible with the project.
I just don't think that's the case, Bring. If, for example, BMR lost the license, they would also lose the tailings. If the license is security for the JV, then so are the tailings. That's the terms of all the tailings licenses in Zambia that I have read. I haven't read Kabwe, but I don't see why it would be any different, and nothing in the RNS's suggests otherwise.
Trust me, the tailings go with the license. That's how it works. And the quote doesn't say that they have title to the land. That is not a given in these circumstances. But it's no great loss either way. The land will forever be contaminated.
Trust me, the tailings go with the license. That's how it works.
"BMR still own all of the land and tailings etc" The tailings go with the license. The land is near enough worthless.
The credit line is there to secure additional earnings and JLP will apply it where opportunities exist that provide the greatest returns. They may decide that Kabwe is one such opportunity, but I don't think that they yet have enough confidence in the project. If the terms of the license are successfully re-negotiated, and the project returns look sound, they may decide to make a bid for the rest of the project. They are currently evaluating other opportunities, but that doesn't necessarily mean that Kabwe can't give them the returns they are after. One issue that they may have is that I assume that the credit line comes with covenants around project leverage. It would be unusual for lenders to be comfortable with all the financing coming from debt. Usually 30% to 40% would be supplied by equity. Does JLP want to raise the equity portion at the current price?
The same way that anyone can. Look, I am not going to spend time explaining something that you already know, which was only ever a diversion from the grown-up discussion that we were almost having.
"Lol"? Really? You should know the difference between profit and cash flow.
JLP's share is more even than 58%. It will also make a profit on the processing contract. The only part of the project guaranteed to make a profit from day one, as you said.
That's the same.
The RNS's also explain that enviro sub-contracts operations to jubilee.
That's not how LC explained it to me. The profit is after paying the operating costs, which include JLP's operations contract.
Of course JH is going to defend his process and his skills as a metallurgist. And I'm not kidding myself - I just said that I dont know about the profitability. JLP dont need the project to be (very) profitable - they get paid for processing. But I am sure they expect it to be worth much more than that. Implications are not a good enough reason for me to invest. That's a strategy that misses out on super-performance (and super-pain).
I would argue that the market knew all of that before suspension. With the exception of the possible placing. And we still dont know what the profit potential is. Extrapolating JH's 2016 figures with current metal and reagent prices there is no profit. That doesnt factor vanadium or JLP influence. I remain convinced that JLP will change the process for the better.
You are right. There may well be a short-term bounce, but without something interesting in the suspension lifting announcement, the only thing that has changed since suspension is that BMR has had to give away 800,000 usd.
It would be a bold play by JLP. It would risk the license (due to delays) and they would have to raise money at a depressed share price.
You are correct. There are economies of scale.