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Friday, 27 December 2013

Merry Christmas: Churchill Mining & Rurelec

Interruptions in festive celebrations:

Churchill Mining plc Jurisdiction Hearing Update (27th December 2013)- the grinding cogs are getting there! Seems they expect a Jurisdictional update by give or take end of February. If this is positive, apart from any share appreciation, it will also lead to some form of fundraiser. One would hope for around 40p per share raiser to avoid significant issues/dilution. The fundraiser should be easy to leverage off post jurisdictional clarification. Assuming (as I believe) that the result is positive for CHL/Planet (subsidiary of CHL but combined case.) Should enable some trade opportunities as well...

Rurelec PLC Anticipated Arbitration Award & Loan Extension (20th December 2013) - There's been a number of messages left, in the absence of a name I'm loathed to publish/authorise simply because you need to place some identity on the contributor. Are RUR on an inside period on the International Arbitration result? To put it simply, no they aren't unless they have been notified of a decision, as such notwithstanding any other news to market about power generation, the RUR board are free to purchase on the basis the news isn't known.

So I hope everyone had a good Christmas day etc...I can say mine was one to remember for the better. A really good day, and can highly recommend people not cooking for themselves but getting others to do it. Not even a care for if something is remembered or is the timing right! Brilliant day, and to top it off; a present from http://www.shiteshirts.com/ For those with a sense of humour and wishing to liven the odd party or get together up, I can highly recommend it! 

Have a good break if you're off and if not, enjoy it when you are!

Atb Fraser

4 comments:

  1. Hi Fraser- just finishing mountain of washing up and the bottle bank collection indicates Ive had a good time too!!

    I agree that its nice to get a CHL update on the hopefully spurious jurisdiction case and that they need cash, so lets hope they don't go down the heavily discounted placing (EMED et al) that seems to be the norm if the dreaded SEDAs aren't used. I wouldn't mind a rights issue, but companies seem to rarely use them nowadays, despite the opportunities they offer to the current holders.

    Have you been following MET (Metro Baltic Horizons)?? - Im in long there, but I have topped up today and their IOM court case outcome is pivotal or earlier settlement, albeit they have £5m cash against a mkt cap of £3.3m even without it. Worth investigating, I believe, if the party abates over the next week :-))

    Cheers and best wishes- The Leggie

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  2. If the past is an indicator of the future, Churchill cannot be accused of not raising monies at a level that promotes current shareholder value. I would like to see CHL offer a Bond that pays out on the resolution of the case. I'd not go all in on bonds of CHL or any investment nowadays, as the risks are different compared to the Rurelec case but I would have some all the same and very tax efficient.

    For consideration: there is a very good argument for the risks of CHL being of the same level of RUR based on the judgements given in the Indonesian Court process and the appeal decisions but my concern being it also involves the actions of individuals and not a Government, albeit CHL's rights were not protected as a Foreign Direct Investor (FDI) so should qualify for jurisdiction and damages. For those that have read the full decision, you'll need to refrain from from laughing!

    Interesting you mention MET. its something I have been following...my concern being 'Russia/Ukraine' and I am unsure of how much will be recoverable. Surely one would have ascertained that prior to issuing proceedings. They're due some £22M plus costs which is a substantial premium to the current Market Cap as you rightly state. One thing that is of concern is the board's apparent belief that the process is complex. All litigation by definition is complex, but its the first time I have seen particular emphasis put on the process.

    What is not stated is the reasoning for the counter claims of 6M Euros by Ernst & Young. I’d like to see more information available, albeit from an investment perspective the POS (Prospects of Success) will have been considered before embarking on such actions. The positive is, they offloaded the St Petersburg property which was of significant risk and perhaps would have defaulted the company. I’ll perhaps review in the full-thread in the New Year, as its clear is has some 7 fold potential upside by the very definition of the success of case and they appear to have sufficient monies/collateral to finish the litigation process. One to follow…

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  3. Fraser

    Thanks for the reply- I have had then on watch for a couple of years but only bought in first after their 28/6/13 RNS, which confirmed they have settled several matters and gave me a simpler investment assessment. I could also see they suggested a delisting and knowing that some cant hold when this happens, I was keen to take advantage of the weakness this caused, so I bought at 8.5p in 3 tranches at that time.

    My understanding is that the E&Y claim has been made by MET, but I am unsure why it has been described as a counterclaim, as they haven't mentioned any claim against MET by E&Y for a counterclaim to be issued. I did email the company, without reply and I am working on the basis that the E&Y claim has been misdescribed as a counterclaim, rather than just a claim. They have said they are pursuing their former directors and their advisers too. On this basis, I am viewing this as a further positive claim, which MET could benefit from in due course. Ive applied a substantial discount for poss early settlement of both claims and taken a positive from the fact the former owners tried to buy the whole of MET earlier in the year plus that Pershing (58.5% shareholders) have been supportive too. My discounted assessment gives me a current fair valuation of circa 30p, albeit we all know how protracted and long winded these legal pursuits can be in the main and that they will need to prove their case, as set out in the Trading Statement (2/8/11), with the 11 issues listed in that RNS (a) to (k).

    Cheers for now. The Leggie.

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  4. Fraser and Ian

    Just came across this piece mentioning CHL and including quotes from the relevant gov spokesman, which appear positive, but there are spelling issues so something could be lost in translation here, so the usual caveats apply.

    http://kusnandarlaw.blogspot.co.uk/2013/12/indonesia-not-to-cahnge-bilateral.html

    Happy New Year to you and all readers here.

    The Leggie

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