This should have been published earlier due to Blogger IT issues it wasn't! However, I was surprised by the absence of commentary on the Intrepid Mines settlement which really puts things in perspective for an early resolution for CHL. There's not much to comment on from Intrepid's perspective, clearly they have elected to receive $80M in lieu of their $109M sunk costs, nevermind their all in costs which I estimate around $140M.
From a commercial viability perspective it makes sense, but it certainly doesn't bode well for CHL's 'high' end claim especially with the need for cash. The Directors of IAU argue the point very well about quick settlement and their reasoning. Like for like, the lower end of CHL's pricing would be more appropriate, say around 27p for which I don't see parties accepting; could be as low as 20 pence for "early" settlement.
Congrats to Scott for getting it away earlier than envisaged, albeit not to everyone's satisfaction.
Atb Fraser
Fraser
ReplyDeleteThanks for the update re Intrepid Mines- they appear to have other plans re some gold mining venture or other that they are keen to get some money to press ahead with, and the settlement is via the sale to a third party, rather than a govt payment but it does seem to show that we need to be patient if we are to get full value. CHL need to organise a whip around shortly or get a litigation funder in at this fairly late stage (which could be a better option, despite the costs, as it would further validate their claim). We know that CHL did spend much before they were stopped from furthering the project, so lets hope any settlement or judgement isn't on a rebate of expenses basis and that NPV or DCF comes into the calculations.
Cheers. The Leggie
Fraser
ReplyDeleteNo doubt you've seen the holdings RNSs this morning- Cause First Holdings Ltd aren't coming up in searches and the name has a hedge fund sound to it. Perhaps the Indonesians have had some political pressure put on them to lever them out of the CHL holding, which was quite substantial at 12.86%. The Jakarta press is continuing to support the gov hardline, re "the battle must go on" but I would again suggest the next month or so for CHL could be quite interesting. Any thoughts from your end?? It would be nice to link a price with this transfer or even see if they are genuinely unconnected entities.
Cheers. The Leggie
Leggie, perhaps the holdings RNS's will become clear post any fundraiser/deal. Sometimes its just an obvious trade with no further elements involved. You will note more companies are willing to fund these types of deals, they had been in the background for sometime.
ReplyDeleteIts always an interesting ride on anything associated with Indonesia.
Atb Fraser
Fraser
ReplyDeleteYes- interesting indeed :-)) Luckily I stayed well clear of Bumi, as I don't like exposing that part of my anatomy - don't mention EXI, my Achilles heal, I will carry on muttering "one day, one day" until the men in the white overalls arrive to bundle me off. And maybe WLFE will have raised that money by then too. I know its complex but I would have thought it was mainly agreed before that Aussie RNS.
Cheers. The Leggie
Well, another day, another $1m OXS CLN conversion and again its Sturgeon, albeit OXS did state that they had converted all of their CLNs in the 3/3/14 RNS so they don't seem to know who holds the CLNs they have issued. The number of shares issued is around 7m again and OXS cash coffers get another boost.
ReplyDeleteJust to recap, OXS did issue $16m of CLNs so now there are $14m left. And the holders are ??? Perhaps this will give those holders so food for thought as Sturgeon seem quite keen to swap their option to get cash on settlement for a share price based return at this juncture. Again, positive news for OXS holders. And possibly some more conversions to come shortly.
Cheers. The Leggie
Re above OXS comment- there is no cash here for OXS on conversion, Im not sure why I typed this above- my error. I have reprimanded myself :-))
ReplyDeleteI will be keen to see if Sturgeon hold on to the 14m shares, which I assume they will as it wouldn't have made much sense to buy the equivalent of 7m off Tau for £257,575 given this implies a breakeven of circa 3.7p, which they cant achieve via selling now. And have they collared anymore CLNs. The mystery deepens...
Cheers. The Leggie.
Fraser,Ian and all
ReplyDeleteRe CHL- they have slowed the cash outflow, sold their final asset and they now have stated that they feel they have enough cash to pursue the arb case and "any other subsequent action to restore value for shareholders". This seems to be very positive as a fundraiser did seem to be a possible dilutative re the current share price, as does the retention of the legal team for the final stages. Mid 20s does seem a little below fair value, given the updated scenario but we are in binary territory here.
Cheers. The Leggie