Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
"Should it be required for purposes other than construction of the Empire open-pit copper mine."
Equally, If the Bond issuer did need to ensure that their funds were just for the mine and not other company plays/G&A then Phoenix have done the right thing by SH in looking to extend the non dilutive RF facility, instead of the D option which could have expedited the Bond sign off and removed this RF fund increase dependency - if this scenario holds water then their optimism must be high of achieving both the Bond and RF extend.
"The Company also refers to the $2 million short-term loan facility (the "Facility") first announced on 24 March 2023, and confirms that it is in negotiations with the lender to roll the Facility into a new and larger facility to assist the Company with access to additional working capital, should it be required for purposes other than construction of the Empire open-pit copper mine."
Market needs everything 100% confirmed, but its pretty much there now imo.
The extention to the Riverfort facility may be a proviso from Bond issuer that these funds are to be used just for the Empire mine, not other works, so it could be a quid pro quo to agree to this, gain Riverfort extention then Bond signed.
Riverfort get surety from assumed Bond in place, which generates revenue as mine developed and sales start- they could put a rider in that if Bond not gained, their extra funds not gained.
Nearly there.
Have bought in based on research and the macro on copper.
- existing mine, not wildcat drilling, website:
"Phoenix Copper Limited (PXC) has an 80% interest in Konnex, the owner of the Empire Mine project. The Empire Mine originally operated as an underground mine from 1901 to 1942 and shipped copper ore 6% to 8% copper and 6.6 gram/tonne gold."
Interims Sep 23
"At Empire, it is estimated that less than 1% of the potential ore system has been explored to date and, accordingly, there is significant opportunity to increase the resource through phased exploration. The stated aim of the Company is to fund this phased exploration through free cashflow generated by its initial mine"
"the U.S. Department of Energy has announced that it is upgrading copper to
the “near critical” classification for clean energy technologies."
The finance deal was predicated on these facts , the board remain confidant of securing the funding - delays are to be expected, albeit they should have been less optimistic on time to complete when out of their control - in principle probably agreed only imo, now final legals? - they would have known a while back if deal untenable I expect.
Macro economics/Geopolitics supports a growth in copper demand, far outstripping supply - where USA domestic markets preferred due to reshoring industry, covid impact, de globalisation, long supply chains impact etc - recent closure of Suez case in point.
https://zeihan.com/greentech-and-the-end-of-the-world/
"A world in which we “electrify everything” requires an order of magnitude more copper and lithium and nickel and cobalt and graphite and chromium and zinc and rare earths and silicon and more."
Re industrialisation of industry in USA overview , outlining the interlinked aspects :
https://www.youtube.com/watch?v=UNxkpqx1LDw
Https://www.investing.com/news/stock-market-news/us-was-top-lng-exporter-in-2023-as-hit-record-levels-3265708
The U.S. was the stand out in global LNG supply growth in 2023, said Alex Munton, director of global gas and LNG research at consulting firm Rapidan Energy Group of the rise to 8.6 million metric tons leaving U.S. terminals in December.
Full year exports from the U.S. rose 14.7% to 88.9 million metric tons
Europe remained the main destination for U.S. LNG exports in December, with 5.43 MT, or just over 61%. In November, 68% of U.S. LNG exports were to Europe, LSEG data showed.
Natural gas flows to the seven big U.S. LNG export plants have climbed an average 14.9 billion cubic feet per day (bcfd) so far in January, up from a monthly record of 14.7 bcfd in December. That topped the prior all-time monthly high of 4.3 bcfd in November, LSEG data showed."
As longer term field producers focus more to serve the LNG market, so DEC has the possibility to expand and fill the gap in demand for domestic gas.
Some great insight posted.
Also encouraging to me about the Jan 2nd $200m asset sale, was its planning, completion and announcement timing.
It could not be in reaction to the Enviro challenge as not enough time to set up the deal, but it sure played well on Jan 2nd to create confidence in the boards abilities to action this type of progressive deal, creating SH confidence as the driver is well received.
Could well be more of these restructuring moves in 2024 with a view to drive down debt, accumulate, consolidate - then push forward with confidence renewed in the business plan.
GLA
I thought the $200m transaction was well done, sends a message
" demonstrates the attractiveness of Diversified's asset base that provides reliable production and consistency of cash flows."
At any time/as required, DEC can sell off minor assets (to them) and generate substantial funds to address any potential regulatory reqs, reduce debt or for new asset purchase etc.
Creates confidence in the management insight and timing imo.
Hi dougb189
Thanks for comments on other BB, your right.
Baron could hopefully do well this year. I like that they have two plays on the go and may advance via either one, a waiting game at present but great potential.
Shouston
I assure you im not being positive - this is not investable - no one should listen to any poster on a BB for either buying or selling share decisions.
There are just so many aspects which do not add up - including where the money went.
If they had expensive technical field issues which meant they could not ramp up NGL injectant then it explains the situation they are in now to a point- but we dont know as COPL are never transparent.
Im trying to ascertain motives of each party and what may play out as im not selling at this level
"Under the terms of the Forbearance Agreement, subject to certain conditions precedent and continued compliance with the Forbearance Agreement, the senior lender agrees not to enforce certain rights, remedy, powers and privileges available to it as a result existing defaults under the terms of the senior loan facility before February 29, 2024."
I read this as basically the Anavio funds coming on Jan 15th of $2.5m may all be spent on the field, as existing SL covenants no longer applies to keep cash on account.
Add to this:
"the Forbearance Agreement requires the Company to deliver a cash flow generative business plan "
COPL then have until end Feb to sort out a business plan to increase production, or the SL forces asset sale : "....which shall include a sales process for the Company's assets."
Anavio Bonds exercise price/terms reworking are just being opportunistic imo - if COPL go under they are after the SL in fire sale proceeds, may not be much , it is still in their interest to ensure COPL continues business as otherwise they would not have funded them now and instead let them go under (their new NED appointed in Q1 also indicative so they can gain board control on the off chance of progression) - but as is their MO they still will try and make profit on the way by converting and selling shares as best they can - but if COPL by some chance do manage to increase prod in the next two months, then other potential outcomes are back on the table.
What happened to the money ? If not spent on NGL then what?
They were on a cost reduction drive and had enabled considerable funds:
RNS Sep 6th
$8.5 million of liquidity ensures the Company is fully financed in to the first quarter of 2024 with the intention of reaching possible third party strategic Joint Venture (as defined below) agreement
o $3.5 million equity injection at 4p per share from Anavio
o c. US$5.0 million liquidity released from hedge restructuring
o $0.5 million cash saving from Directors agreeing to waive all cash compensation for 2023
o $2.0 million of G&A reductions achieved to date in 2023 and a further $1.0 million identified to be reduced prior to year-end 2023
The further funding Oct 6th:
"This financing package is designed to ensure the Company is fully financed through Q1-2024, at current production levels of approximately 1,200 bbl/d,"
funding throughout and to end of Q1 at current prod was enabled
"In addition, they (SL) agreed to waive the quarterly covenant tests as at September 30, 2023 and to reduce the minimum liquidity covenant from $2.5 million to $1.5 million from October to December 2023."
No field capex we know of in period, no NGL is confirmed, reduced O&A costs, SL interest deferred, hedge offset - why are they defaulting now with these financial breaks?
SL required $1.5 million needed on account to maintain cash flow, to reduce risk of going out of business
$1m for NGL was specified to be spent
"the company plans to spend over $500,000 on NGL injectant in each of October and November to increase the density of NGL's in the gas injection"
=$2.5m total - being the amount of new Anavio finance
If they have indeed burned through all other funds, this is the minimum required to increase prod/abide by covenants if they had any intent to attempt to continue business.
Doug
I think your take on the overall situation is probably the most accurate.
I was a keen supporter of the assets, much less so this appalling company - just Oct and major re-fi and support from lenders, then no prod increase, no jv, default and here we are.
It now appears the assets were poor aswell, or too many technical problems to increase prod?
This seems like an engineered situation to me - at odds with the Nov 15th RNS:
"Since the third quarter in 2023, COPL was able to use working capital to increase NGL injection at the BFSU at double the rate compared to recent period"
which didnt happen - even though they had the $1m finance to do so at $500k per month Oct and Nov planned NGL injectant
"A technical review of the oil response to increase NGL injection will be monitored closely this quarter, and it will form the basis for future production guidance and 2024 plans."
so on monitoring, they found that no injectant = no prod growth = sell all assets in 2024?
As to JV - if the confidential wells drilled in Jan 2023 had been dusters, why continue talks for another 11 months, enter a LOI in July?
It feels like COPL have scuppered their own ship.
Why not use the $2.5m coming to buy injectant? the shareholders are decimated but the company could progress to breakeven 2000 bpd, so meeting SL terms on route.
or if not - specifically state that the gas flood has not worked with new GGS and its game over (not that the increased rate occurred)
If imminent asset sales the only route, then why restructure the bonds so precisely for future?
".The exercise price of the existing warrants will be amended to the Subscription Price, and the expiration date will be extended to 26 August 2028.
"the commencement date for any exercise by the Company of its parity call option under each of the Bonds will be extended to 1 January 2025"
and if all company assets to be sold why appoint another NED in Q1?
"The Company will appoint one additional independent non-executive director to be nominated by the Purchaser by no later than 31 March 2024."
My shareholding decimated either way , but it would not surprise me at all if they announced prod increase using the $2.5m funds in Q1, another consolidation, name change, revised agreements made with SL and Anavio and then "new" discussions with JVP.
HtTps://www.touchstoneexploration.com/wp-content/uploads/2023/12/Corporate-Presentation-December-2023-.pdf
2023 performance and 2024 plans review:
Slide 4/5 summarises key metrics :
- Prod growth 1581 to 8200 booe/d in year
- Managed debt evidence - 2022 $27m and ends 2023 with $30m, after works completed - intent to end 2024 with $25m debt after all proposed works.
- 37% increase in operating netbacks
- Topside facility capacity 42k boe/d - room for growth without further capex in 2024
- Slide 9 Disciplined investment for solid foundation growth, reduced risk, sustainable cash flow - only one exploration well in Choh/Gibba - remainder are development wells of producing fields and recompletions
slide 16- shows 24 exploration locations identified and 14 prospects
Overall conclusion, TXP are building a solid sustainable foundation with stringent debt management.
Disconnect in SP value.
GLA
Silver, spot on
AM pushed all boundaries on funds use in the past, not great at admin and this SL default on new terms may just be more of the same( I thought terms generous to offset the hedge, interest payments, cash on account to $1.5m)
SL in no mood now, as out of the loop on JV negotiations and JVP rationale (as they should be as third party), their payback and more nb the 8% of the shares issued to them on retiring the debt as per loan terms for them to hold for end sale of asset - now at risk
Equally, these two RNS have sure removed a swathe of LTH retail shareholdings, now owed by whom?
Silver - excellent insight, It plays
Apart from that, multiple Major interest if we believe the RNS, they could have said just one JVP interested - no need to make it plural if made up:
"if the interest being shown by certain third parties in joint venturing with us matches our own views on value, we will seek to further scale through partnership."
Since JVP left the table, AM may well have had calls from these other parties.
Uund, reasonable post, thanks
But Frontier 1 is key and flows after the CC recompletions
GGS/pressure aspects are focused on BFU and Shannon
Your right, AM could provide a loan
As profit sanity stated - "based on nothing, other than c30 years of investing" that it sure as **** aint over yet."
Silversprings - your post is exactly my perception aswell - doesnt add up does it?
Also look at the upbeat wording in all Cowans RNS since he took over, if plan was to take it down - then downplay, under promise from the get go - otherwise the hard working SWP guys are also complicit in not making the field work with proven tech - I just dont buy that. They at least have done a great job with multiple constraints and problems to deal with, I expect the field is working well by now and thats down to them.
Uund
we disagree on all it seems...
"The JVP and the SL actions seem to suggest that production is not rising at this time."
To me the JVP does not give a flying about COPL BFU production, its not a dependency in this billion barrel investment decision - if they liked the discovery project optics they would have bought into it with a reasonable offer.
I personally think they made a low ball offer, COPL rejected it, the SL then played their card as just want a deal done and here we are, its chess not chequers.
Note also the massive deramping poster increase, first time posters, in last week before the news - paid on for a reason -for PI to sell and reduce SP -
Obfuscation aswell -PI who were confidant on the asset become trolls/paid on accoriding to this gang - you know who they are.
latest sent in just now who likes sushi posted for the first time - there is the naked agenda
Id rather hold and see what play out than sell to intimidation and game plays, greed will win out - AM is also greedy.
Seem orchestrated to me, many PI exit, but many buys.
I cant see AM giving up easily on this, he could provide a loan to company, he did it before - or he goes down in infamy, as does his daughter by association - he sold this to his business contacts, friends etc - so personally a lot riding on this outcome for him - he is not without resources.
The JVP made their move
SL made their move
AM must have multiple contacts in Oil firms, needs to deal with the SL terms issue, evaluate whats possible - if the Prod is rising then then there is a chance.
Equally not sure on the COPL America affiliate and main COPL nuances, who own the discovery?