Member Info for zumore

because on reflection maybe nothing changed from the terms of the 27th Feb rns to the 6th June terms. Because in 27th Feb RNS it says:

"Regency to hold proportion of 70% of JV equal to its proportion of cash contributions"

So proportion of the cash was $2m RGM v $1m LH, so 47% RGM v 23% LH.

Though back in Feb most thought the RNS meant RGM would be 70% majority shareholders. But it was just a misleading RNS.

So forget my earlier 17.39 post.

that last part should've said:

"So just my opinion but i think this JV is stacked in Legacy hill's favour "
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Because new poster Radagast guesstimated at least 20% profit margins on the RGM/LH coal JV, i will also have a guess. :) With 4 months now gone my guess is this coal joint venture is losing around $600,000 each month.

Lots of varying opinions. I guess one day we'll find out whether it's profit or loss making. Though the way Bell is acting everything indicates to me it's loss making. Even protecting himself from Winnifrith by flying over to Greece and creeping around Tom by trying to care and ripen Tom's olives. https://www.tomwinnifrith.com/articles/14236/photo-article-from-the-greek-hovel-the-olive-harvest-underway-andrew-bell-in-action

the more i think Legacy hill have completely stitched RGM up over their coal joint venture because everything seems in Legacy hill's advantage.

This is the original 27th Feb 2018 rns http://www.lse.co.uk/share-regulatory-news.asp?shareprice=RGM&ArticleCode=yteibkvo&ArticleHeadline=Joint_Venture_with_Legacy_Hill_Resources which set out the "principal terms of the joint venture":

(1) LHR will own 30% of the JV which reflects it role in financing, Investing and managing the acquisition to date.

(2) LHR will contribute to JV a further $1m cash

(3) Regency will contribute to JV up to $2m cash

(4) Equity contributions to JV under this Agreement capped at $3m cash

(5) Regency to hold proportion of 70% of JV equal to its proportion of cash contributions

So i think we can all agree those original 27th Feb rns terms on the joint venture look fair? But now we fast forward to the JV term changes http://www.lse.co.uk/share-regulatory-news.asp?shareprice=RGM&ArticleCode=uckq983q&ArticleHeadline=JV_with_Legacy_Hill_Resources_and_Loan_Agreement in the 6th June rns.

(1) Regency mines still contribute $2 million to the JV and Legacy hill still contribute $1 million.

(2) Legacy hill become the majority 53% shareholders because they gain a free 30% stake because they are managing the coal operation.

(3) From 6th June rns: "This 47% stake represents Regency's proportionate share of cash contributions after the 30% management share held by LHR"

NOTE ^^: So that works out 47% for RGMs $2 million cash contribution. So around 23% for Legacy hill's $1 million cash contribution. Lastly Legacy hill gain a free 30% for managing the coal operation.

(4) From 6th June rns: "The assets of MET at inception are the cash contributions of the JV partners"

NOTE ^^: So from point 4 (and down to cash contributions) RGM will still own 66.6% of the Mining equity trust assets because of RGMs $2 million cash contributions. So Legacy hill will therefore own 33.3% of the mining equity trust assets because of their $1 million cash contributions.
That seem good ^^ but that basically means because RGM still own 66% of the MET assets then when future cash calls are needed they will contribute the most money.

So the big disadvantages of this JV deal for RGM:

(1) RGM are the minority shareholder even though they contributed the most money. They have little say (so disadvantage)

(2) Based on present contributions RGM will own 66.6% of the MET assets. So they will have to stump up the most money if cash calls are needed (so disadvantage)

(3) Legacy hill's 30% management share is nothing to do with cash contributions. So if this JV got into massive debt then Legacy hill could resign their management duties then their 30% management share disappears and so based on cash contributions RGM would become the majority 66.6% shareholder. (so disadvantage)

So just my opinion but i think this JV is stacked in Legacy hill

Booboo, well the 6th June RNS says Legacy hill have only got 30% of their stake because they are the one's managing the coal operation. So you would think if they agreed with RGM that somebody other than Legacy hill should manage the coal operation then they presumably would lose that 30% management stake and then the stake would go to something like 66% RGM majority holders + 33% Legacy hill stake minority holders. So that would represent the twice as much cash RGM are putting in.

So to answer your question RGM are taking a far greater risk than Legacy hill. And if more money is needed i bet Legacy hill would insist (just like it says in 6th June rns) that the 30% Legacy hill management stake is nothing to do with cash contributions. So like i say that would mean RGM would again have to contribute twice as much cash than Legacy hill.

To repeat at the moment the LH 53% stake to RGMs 47% stake is worked out like this:

RGM 47% stake because of $2 million cash contributions

Legacy hill around 23% stake because of $1 million cash contributions

Legacy hill another 30% because they are managing the operations of the mine
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So to me it stands to reason if RGM and Legacy hill both agreed to bring in a team outside of Legacy hill to manage the coal mine, then Legacy hill would lose that 30% mine management stake. Of course if they employed someone outside of the partnership to manage the mine then they would only receive pay and not an hefty stake in the company. Well that's what i think!

In the Feb 27th rns http://www.lse.co.uk/share-regulatory-news.asp?shareprice=RGM&ArticleCode=yteibkvo&ArticleHeadline=Joint_Venture_with_Legacy_Hill_Resources RGM were originally going to be the majority 70% holders. So i suppose when in the March video he said 2-3% margins to the lenders that could've meant looking for coal assets with 10% profit margins. So 7% RGM and 3% for Legacy hill. But worryingly since they took over this Omega coal operation this RGM/LH Joint venture is bringing in over 25% less monthly coal revenue than the previous owners.

Of course since that Feb rns Legacy hill had wangled a 30% stake for managing the coal asset: so according to June 6th rns RGM gained a 47% stake through $2 million cash contributions, Legacy hill gained around 23% stake through $1 million cash contributions + (nothing to do with the cash contributions) LH gained another 30% for managing the mine. So if any future cash calls are required then you would assume (if same terms as last time) RGM would have to stump up twice as much cash as Legacy hill?

From 6th June RNS:

"This 47% stake represents Regency's proportionate share of cash contributions after the 30% management share held by LHR"

PS: These days i never like to post more than 50 posts in a month, so no more boring posts for a while. And i say boring because believe me i bore myself silly with my repetitive posts. Bye!

Booboo says: "might be wrong but based on WC last raising our holding is worth £350k not £400k."

but could they sell it for that? Seems totally illiquid to me.

Booboo says: "Personally we could always sell our holding to LH"

I think you was correct the other day when you reckoned the previous owners seemed canny in offloading the coal asset for $3 million. I agree with that because i'm sure in August Andrew Bell was saying that since taking over the coal asset the highwallers would begin from fresh locations.. but it appears that there was little coal there because in the 19th October RNS it said

"However these issues have been promptly addressed and despite a planned 12 day downtime for one of the two high wall miners as it is moved to a new location, we expect October and November sales to revert to planned levels"

Then in the 28th November RNS it said:

"The other highwall miner is currently operating on a single shift as it completes mining of the reserve base at the Mudlick location. Once the current reserves have been exhausted at Mudlick, which is anticipated to occur in late 2018 or early 2019, the machine will be moved to one of two available sites."
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So maybe the previous owners fully realised that the coal reserves were dwindling fast and therefore they made a stonking deal selling it for $3 million? And if LH/RGM are making huge losses month after month (i suspect they are) then i would say it would be very doubtful Legacy hill would want RGM's 47% stake.
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On a brighter note RGM chairman Andrew Bell was apparently on another holiday this week picking olives with Tom Winnifrith: https://www.tomwinnifrith.com/articles/14236/photo-article-from-the-greek-hovel-the-olive-harvest-underway-andrew-bell-in-action.

I remember a couple of weeks ago someone said he was on holiday in Croatia. Then a couple of months back he was taking that 5 day holiday at Champney's luxury health farm. I believe he tweeted he lost 15 pounds in those 5 days and an astounded gym instructor told him that was the most anybody had lost in 5 days. Of course some remember another record breaking Andrew Bell performance when he quickly lost around 2 million pounds by investing with Stephen Mosicicki during 2016-17.

Booboo, the 2-3% margin is just my interpretation of what was said in the linked March 2018 video https://www.youtube.com/watch?v=giEub8sOzPI (from 50 secs- 1m 25 secs). Bell talks about the lenders being exposed to a possible 100% loss for a 2-3% margin.

Like i say those at Legacy hill will often invest their own personal money into projects, so i think when Bell talks about "lenders" who are exposed to possible 100% losses for a 2-3% margin, then he's possibly talking about Legacy hill. Of course i'm sure some will say Bell is not referring to Legacy hill.

Obviously from the Legacy hill resources website they seem to think their expertise can improve profit margins on any project they take over, but the former Omega coal owners were averaging $2,825,000 in revenue in each month of 2017 but since Legacy hill/RGM took over they've only averaged $2 million in revenue a month. So i think that indicates possible huge monthly losses.

according to the currency converter is a massive £1.517,000.

Regency mines Curzon energy shares are only worth around £170,000. Regency mines White car £400,000 investment seems totally illiquid and worthless.

So unless the coal joint venture shocks me then it very much looks like RGM will be looking to repay the massive loan by an huge amount of RGM share dilution.

"Details of the Note

Regency has agreed to borrow gross proceeds of $1,600,000 (net $1,520,000) from institutional investors in order to fund a portion of its obligations under the JV. The loan will carry a 10% interest rate and be for an initial term of six months, and is subject to an implementation fee of $96,000. A further six-month extension available for a 5% fee. If extended, the loan may be converted by the noteholder at a fixed price equal to 130% of the 10 day VWAP prior to the initial repayment date/date of the available six month extension period (the "Fixed Price").

If the loan is extended past six months a payment schedule will be applicable and the payments may be paid in either cash or shares at the discretion of the Company. If paid in shares, the payment amount will be convertible at the lower of (i) the Fixed Price, or (ii) a price equal to 90 per cent of the lowest daily VWAP over the five trading days immediately preceding the date of the relevant payment date"
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Booboo because it's only an initial 6 month loan then Rodger could be visiting sooner than we think.

The $1,6 million loan looks to gather 10% interest in it's first 6 months. So it will rise to $1,760,000 by the 6th December. Plus the above says a $96,000 implementation fee, so if we add that on then the debt rises to $1,856,000. Then if RGM decide to extend the 6 month loan they will incur a 5% fee, so i'll add $80,000 fee (from original $1.6m loan) so that means the RGM debt should rise to around $1,936,000.

At the time Andrew Bell was trying to say the lenders would only convert at a premium. "Here there is no conversion possible for 6m and even after that only at healthy premium......" https://twitter.com/AndrewBRRR/status/1004329336080609280

I think Bell's lying because the above rns extract says "If paid in shares, the payment amount will be convertible at the lower of (i) the Fixed Price, or (ii) a price equal to 90 per cent of the lowest daily VWAP over the five trading days immediately preceding the date of the relevant payment date"

The FIXED PRICE is the inflated 130% share price, so you would think they would convert shares at the lower "a price equal to 90 per cent of the lowest daily VWAP over the five trading days immediately preceding the date of the relevant payment date"

Legacy hill resources coal joint venture may be presently making big losses each month.

(1) On the Legacy hill website they describe who they are and what they do:

"Legacy Hill Resources is a private mining company majority owned by its employees. We have a track record in turning around troubled assets that suffer from either poor operational or financial management decisions.

Our team is multi-disciplinary but is centered on technical and operational expertise gained in engineering, mining consulting, geology and management of mining businesses. This is supported by experience building businesses as entrepreneurs and financing mining companies as bankers and investors"

^^^^^^ So Legacy hill like taking over troubled assets. So when Legacy hill and Regency mines bought the Omega holdings coal asset for $3 million, we were then told that Omega generated $34 million in revenue during 2017. That $34 million revenue at first glance seems impressive but we must remember Legacy hill look to acquire troubled assets, so we can assume that Omega holdings were either making small profits or even losses when they sold up for just $3 million.
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We skip back to a share talk interview Andrew Bell did in March 2018 https://www.youtube.com/watch?v=giEub8sOzPI . This interview was many months before LH + RGM acquired the $3 million Omega coal asset. You only need to watch the first 2 minutes. In this video Bell says because Legacy hill are a private company they are very careful with money and they will be doing extra due diligence. He then says any lender could be exposed to possible 100% losses for 2-3% margin is going to want even more due diligence done.

The worried lenders are not on the RGM side because they will get their money back because RGM will eventually dilute RGM shareholders into oblivion. No Bell's talking about the investors in LH because their business model is for them to often sink their own money into projects. So it's worrying if they were looking to acquire assets with 2-3% margins.

(3) Once the coal asset was acquired Bell did interviews expressing his hopes of increasing production compared to the previous owners. The previous owners generated $34 revenue during 2017 but LH/RGM are only averaging £2 million revenue a month, so presently on target for $24 million revenue in a year. So if the previous owners were only scraping 2-3% profits on $34 million revenue then Legacy hill/RGM could now be making huge losses, especially with additional costs of leasing two highwallers.

(4) Andrew Bell usually comments in an RNS when he thinks he's got something to brag about. He made no comment in the 28th Nov rns

Even though they've been operating this coal JV for 4 months Bell just won't give shareholders the numbers on whether it's profitable. So with his track record you suspect he's sitting on bad news.

PS: Of course all the above only my opinion.

I think you are correct booboo I recall private landowners who lease the coal fields often get advanced royalty payments. I also recall the local environmental agencies expect the coal companies to pay expensive bonds to clear up any pollution, for example coal dust contaminating the local water ways - maybe sewerage from the coal site that enters the water ways.

The local county council also expect if the coal company uses its heavy trucks on its county roads then again the mining company will have to pay for an expensive bond. A good example is that these small county roads are often not properly reinforced to take the constant heavy loads of the coal trucks, so over time the roads churns up, so the bond would be used to fix the churned up county roads.

I'm sure there is numerous other costs that none of us have thought of. So probably best for Mining equity trust (or MET) release a detailed coal quarterly so we can finally know if this new coal venture is making profits or losses.

In one of my earlier posts i said:

"Compare that of new owners RGM + Legacy hill, just $3,974,852 of revenue in the first two months"
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Of course that should've been revenues for months two and three, September, October. Of course the new owners took over coal operations on August 2nd but thus far August revenues have never been revealed. Presumably those August revenues were small.
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I'm also guessing the new JV owners of this coal mine are starting to realise that the previous owners were a pretty slick operation; the previous owners were selling during 2017 on average 62,000 tons of coal a month but the new owners have only averaged selling 44,000 tons of coal during the months of September and October. So the new owners are massively underperforming compared to the previous owners.

I disagree Harry, i don't think it's looking good. In fact i think drastic managerial changes need to happen here because Andrew Bell and Scott Kaintz are way too similar.

You look at the RGM website and you see Scott Kaintz expertise is raising money, likewise that is Andrew Bell's expertise. So you have two similar individuals who year after year can raise huge amounts of money but both seem pretty clueless when it comes to picking a good asset. So because both have deficient expertise they then have rely on others, like Steven Moscicki, to tell them that an asset is good (even when it isn't) . So year after year the clueless duo get persuaded to buy into rubbish assets and then quick as a flash they squander away the company money.

Why the bigger shareholders still persist with Kaintz and Bell i will never know. To me it seems absolutely ridiculous to stick by two individuals whose only expertise seems to be fundraising.

We were told that previous owners pulled in coal revenues of $34 million during 2017, so that is an average $5,666,666 of revenues every two months. Compare that to new owners of RGM + Legacy hill, just $3,974,852 of revenue in the first two months. So not looking good.

that Luke1, Stephen Pearce and Mark Lancaster all reacted positively to yesterdays RNS. If we look back at the coal revenue forecast in the RGM 4th September rns. It said:

"For the ten month period to June 2019 MET expects to sell 692,196 tons of coal for total revenues of $30,468,239"

So to be on schedule, Mining Equity Trust (or MET) should' have had revenues of $6,093,647 for the two month September, October period; but from the subsequent RGM rnses the actual revenues for the September, October period totalled $3,974,852. So they've pulled in $2,118,795 less revenue in that two month period than they had previously predicted.

Luke1, Stephen, even Mark, why so happy with yesterdays RNS?

If these new operators continue selling around 44,000 tons a month and generating $2 million in revenue each month, that would mean $24 million revenue in a year, compared to previous operators $34 million revenue in a year.

So the worrying point is, could they survive generating $10 million less revenue in a year than what the previous operators were generating? You would think highly unlikely. Plus of course these new operators also have to lease the expensive highwallers.

So i wouldn't personally bat an eyelid , if in the future we get an RNS to say "coal operations halted"

I titled it "Luke1 says" but i decided not to quote him.

The flaw with your calcs is that you forget what the "mining equity trust website" says about former Omega coal mine operators. https://www.miningequitytrust.com/omega-coal/

"For the year ended 31 December 2017, Omega sold 749,000 tons of coal, generating revenues of $34m. Omega employs approximately 70 employees with strong mining experience, competencies and customer insights."
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The new operators are only selling on average 44,000 tons per month and bringing in around $2 million of revenue per month, so that would amount to approx 528,000 tons of coal sales in 12 months and around $24 million in revenue in 12 months. So at present these new operators of this coal mine are doing far worse than the previous operators. Also let's not forget that this new JV outfit are leasing the two highwallers. I recall Booboo saying they could cost upwards of $6 million each to lease each year. I believe previous operators owned the highwallers because i remember Andrew Bell saying in an interview that originally the highwallers were part of the deal but then they were taken out of the deal to make the deal cheaper.

So taking all the above into account, i agree with the others that it is highly unlikely that the new operators of this Omega coal mine are not making any profits.

even you must admit that Red Rock's big loan and investment in Amulet diamonds corporation looks incredibly dodgy? How is p***ing away such an huge amount of money good for RRR shareholders?

It was never RNS announced and it was buried deeply in the Red Rock annual report:

"On 19 July 2018 the Company agreed to subscribe for 35,519 common shares in Amulet Diamond Corporation at a subscription price of USD2.76 per common share. The Company further subscribed to USD401,961 of shareholder loans. These shareholder loans are unsecured, non-interest bearing and have no fixed maturity or repayment date"
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Of course nothing will be done about this but i'm sure to most PIs it looks incredibly incredibly shady. Let's be honest it looks shocking.

that only does deals for the best interest of RRR shareholders?

https://twitter.com/AndrewBRRR/status/1065336672265674753

Or does he only do things with his best interest at heart, so he can continue the cushy life?

https://twitter.com/Boardo65/status/1028928533974999040