Member Info for ViciousHippo

Mainly they need to hang on to cash, stop buying revenue, grow organically and reduce costs.

I'm not sure any of that is in MM's bones, so we need the finance team to dictate the next couple of years.

THG didnt issue a profit warning beause it is loss making. It is a key difference between it and Boo.

I appreciate all the doom and gloom about the going concern point, but they were obliged to say it by the AIM regulations. The amount they need to raise to survive (ie pay suppliers and first tranche of debt) is a few million. There are plenty of indivdual private investors that can afford that even. It's a rounding error to the Newfoundland government if it saves jobs (esp after Hurricane Fiona). With enough to limp through the next few months, they could manage their cash properly this time. The share price would rise and then a placing would be more reasonable.

The CFO has moved to Newfoundland. She is not going to move back home after a couple of months. She will plot a path.

But lower copper price is partially offset by higher dollar v CAD. But the main take away is the company needs some resuilience in the face of extreme volatility. Copper could do a short term nose dive at any time. So could the dollar. You need a healthy bank balance to absorb short term shocks.

You actually said 8p!

I have a reasonable hope for this. Canadian mining was already having a bit of a renaisance before the war started, due to new techniques making deep mining more cost effetcive. Now with the war, my expectation is that Canada will become a geopolitically strategic producer for the West. Still higher cost than China/ Russia/ Chile etc with their huge open mines maybe, but safe and secure.

How does delisting help? Or do you mean a buyout?

Small shareholders only have their small vote. However why would the large shareholders accept a lowball offer!

I agree with you Metalhead. I think the only downside of Newgen having securtity over the assets means they control the sale process, but I'm guessing. I just cant imagine we'd get less than $50m for the mine. And probably nearer $100m.

Sorry should have made clear - May 2022. But audirtors were clear then the copmany would need more finance.

This is what the BoD and Auditors had to say. BoD seemed quite relaxed about being able to refinance

BoD
The Group continually reviews operational results,
expenditures and additional financing opportunities in
order to ensure adequate liquidity to support its growth
strategy while increasing production levels at the Ming
Mine. The consolidated financial statements have been
prepared on a going concern basis which assumes that
the Group will be able to realise its assets and settle its
obligations in the normal course of business. Management
believes that the Ming Mine will generate sufficient
operating cash flows to support the day-to-day activities
and future growth requirements of the business. If the
production is not ramping up in line with forecasts or
lower than forecast copper grade and commodity prices,
the Group would be able to obtain additional funding
through either equity or debt financing. For the year ended
31 December 2021, the Group successfully obtained debt
financing of $18.8 million and equity financing of $18.3
million. Also, the Group completed a gold stream financing
of $11.0 million in March 2022.

Auditors:
Material uncertainty relating to going concern
We draw attention to note 1 in the financial statements,
which indicates that there is a risk that lower than forecast
commodity prices or production issues will result in a
threat to the going concern status of the group.
For the Group to expand production levels to the threshold
at which funding of operations and growth can come
from the operating cash flows of the Ming mine the Group
requires additional financing, as well as commodity
prices, primarily copper ore, to consistently remain above
breakeven prices. We do note that the Covid-19 pandemic,
which began in the previous financial year, has now largely
subsided, which has resulted in improved commodity
prices over the course of the year and since the year end.

Fuku - yes you're right I was just having a look back. Hence the value could be 0p, if the finances are dire. I do think they should release another RNS that clarifies that question. "Yes we are almost dead" to "No we can hobble along with what we've got, but that is not how we want to do things"

The key terms of the Loan Note include:



· The Loan Note will be closed in three tranches with the first tranche of US$12.4 million today, which includes rollover of the existing senior debt of US$5.0 million from a fund advised by West Face Capital Inc. ("West Face") and bridge loan of US$1 million (as announced on 13 October 2021) plus 5% early repayment premium, US$1.8M by 5 November 2021, and US$7.8M by 31 December 2021;

· The Loan Note bears interest at the rate of 8.0% plus the greater of: (i) US Dollar 3 month LIBOR; and (ii) 1.75% per annum, payable monthly;

· The Loan Note matures in three years and principal repayments will commence the month following the first anniversary of the closing date of the first tranche and be paid monthly thereafter (i.e. fully amortized for the remaining 24 months from the date of first principal payment until the end of the third year);

· The Loan Note is subject to arrangement fee of 3% of the gross amount of the Loan Note, payable on the closing dates of each tranche;

· The Loan Note will be secured by first ranking security over all assets of the Company and its material subsidiaries;

· Warrants over 5,400,000 new ordinary shares of the Company has been issued to NewGen (the "Warrants"). The Warrants have a term of four years with an exercise price of 26.61 pence calculated based on 130% of 20-day volume weighted average prices two days prior to closing of the first tranche.

· A gold equivalent payment in total of 300 ounces over three years.

Newgen cannot seize assets worth more than they are owed. If th asset is worth more than the debts, the shaeholders get the difference. Unless the loan is secured against the mine itself of course. Hopefully not...

This is a tricky question. There is no doubt that even with a huge dilution, RMM has the potential to be in £1+ terrirory.

The RNS has made investors question whether the company will survive at all. So the price is either "quite a lot higher" or 0p. It really depends if finances are dire or not. Simple as that.

However even worst case, unlike, say, a retail operation, we have a real asset that is valuable. With new mining techniques, the inevitable rise in copper prices over the next 10 years, efficiency gains, and Canada's status as a "friendly country", Ming Mine can be a very nice cash cow for 20+ years.

Worst case - find a buyer for the mine. A $billion working mine needing, say, $50m further investment, has to be worth something more than $50m. Assume Newgen and other debts/ costs come to $35m, $50m price would leave $15m = 9p a share.

Beauty the key driver at +20.0% reflecting, in part, the impact of the Cult Beauty and Bentley Labs acquisitions.

So revenue is up due to acquisitions. Is there any organic growth.

In fact Ingenuity is the only bright spot in terms of organic growth. But the problem with Ingenuity is is how much is being spent to achieve that.

In both cases shareholder funds are being used to grow. There is no proof yet that this will all convert into profit in the long term. It might. But with recession on the way, it might not. The jury is still out and that's why the share price keeps going down. It will stop going down when THG are cash neutral. It will start going up when THG is proving it can survive a recession. This is a LTH.

I really wish they didnt have that loan facility. Once they get into debt, they might srew the whole future. Hopefully management will stop being overconfident about the future, and live within their means.

OK then worst case - we have to flog the mine. If it's really a $billion potential, and requires, say $50m to get it working, you'd thnk someone would buy it for minimum $50m, probably nearer $100m. Let's say $75m. Less the loan+debts of, say $35m, that leaves $40m for the shareholers = 25p. Not great at all, but it's back to where we were before the drop. Dunno, whichever way you cut it, 10p a share looks way off.

Presumably the copper price resurgence and strength of the dollar will be making quite a useful difference this month. So it's not all downside at the moment. I'm sure they will get through. TB is not giving up a billion dollar asset to pay a few creditors and a $20m loan. He should do a 1-for-1 rights issue at 10p - I'm sure many (most) shareholders would stump up.

I would only add that while copper (and all commodities) will be a safe bet in the long term in an inflationary environment (their prices generally keep up with inflation, and copper should be in high demand), in a recession in the short term demand can collapse, and copper could go down to MArch 2020 levels which is around 40% lower than current price. So they need enough headroom to cover a short term slump. This can be done through lots of cash, or hedging. I would think the CFO is working on a package of measures. All to play for, but it could be squeaky bum time for a while.

Extract 2:
rescheduling the repayment of longer term debt to better match Rambler's operational cash flow generation [IS THIS A REFERENCE TO NEWGEN AND DOES IT IMPLY NO ACCELERATION OF THE NEWGEN DEBT? (COMPARE ABOVE)]

My thoughts:
Two things I think it could be
a) either 'reschedule' is to be taken at face value and it IS to do with NewGen i.e. they accelerate the existing debt by reorganising longer terms on a larger debt with NewGen and accelerate payback of the current arrangement...or
b) they are jusmt saying any new debt (loan) will aim to be on more manageable longer term repayments that are more sustainable (but may not be with NewGen). It may just be bad use of the phrase 'reschedule'...

My take on this would be they want to roll up interest/ capital repayments for a period, and pay more later when profits increase. Basically working capital is too low to fund operations and the debt payments. They are at some risk probably of going bust, but they could also spend less on exploration and just concentrate on mining what they have. My feeling is TB is looking to make a step change up with Ming and start up Little Deer. He has proven the mine can produce A LOT MORE, and now wants to accelerate things to make his millions (and ours potentially). He has talked about listing on TSX, that is where I think this is headed, and what the CFO is working on between now and end Sep.

I never realised the insane rate they (ie we) are paying Newgen:

Rambler Metals & Mining PLC said Friday that it has closed a $22 million loan with NewGen Resource Lending Inc. to complete the development of its Ming copper-gold mine in Canada.

The mining company said that the loan note will be closed in three tranches, matures in three years and bears interest at a rate of 8.0% plus the greater of three-month Libor or 1.75% per annum.

10%+ per annum. Yes we need to recapitalise...