Churchill Mining Plc Jurisdiction ruling and restoration of trading - Punchy?

Churchill Mining plc Jurisdiction ruling and restoration of trading 

Churchill Mining plc

Jurisdiction ruling and restoration of trading

RNS Number : 8822A

Churchill Mining plc

25 February 2014

 



25 February 2014              

                                                                                               

AIM: CHL                                                     

                                                     CHURCHILL MINING PLC

("Churchill" or "the Company")

ICSID Arbitral Tribunal Unanimously Rejects Republic of Indonesia Jurisdictional Challenges

Restoration of trading

Further to the announcement of 24 May 2013, the Directors of Churchill (AIM: CHL) advise that the International Centre for Settlement of Investment Disputes ("ICSID") arbitral tribunal, comprising Prof. Gabrielle Kaufmann-Kohler (President), Mr. Michael Hwang S.C (Arbitrator) and Prof. Albert Jan van den Berg (Arbitrator), ("Tribunal") has rejected the Republic of Indonesia's challenges to the Tribunal's jurisdiction.

"We are pleased that the Tribunal has rejected the Republic of Indonesia's jurisdictional challenges and the Tribunal decisions now allow Churchill and Planet to pursue their claims for damages against the Republic of Indonesia under the respective Bilateral Investment Treaties Indonesia entered into with the United Kingdom and Australia" said Churchill's Chairman David Quinlivan.

In summary, the jurisdictional challenges by the Republic of Indonesia claimed:-

(i)   the Republic of Indonesia had not consented to ICSID arbitration of the dispute with Churchill and its wholly owned subsidiary Planet Mining Pty Ltd ("Planet") under the UK-Indonesia and Australia-Indonesia Bilateral Investment Treaties,

and/or

(ii)  even if the Tribunal found that the Republic of Indonesia had consented to ICSID arbitration as a general matter, the tribunal would still lack jurisdiction because Churchill and Planet's investments fell outside the scope of protected investments under the respective Bilateral Investment Treaties.

In its ruling, the Tribunal dismissed the Republic of Indonesia's challenges and found that the Tribunal has jurisdiction over the claims Churchill and Planet have submitted. Full copies of the Tribunal decisions on jurisdiction will be available on the Company's website www.churchillmining.com.

In its announcement of 10 May 2013, Churchill provided a preliminary estimate of its and Planet's damages as a result of the actions taken by the Republic of Indonesia of not less than USD 1.054 billion, excluding interest. This estimate remains under review and Churchill and Planet will finalise their damages presentation in the course of the arbitration proceedings.

Churchill and its lawyers, Quinn Emanuel Urquhart & Sullivan, LLP will now seek directions from the Tribunal on the schedule for submissions and hearings on Churchill's claims for damages.

The Company will provide further updates on the timing of the proceedings as details become available.

Restoration of trading of the Company's shares on AIM will take effect from 12.00pm today.

END

Uranium: Is the bottom near...for the Yellow Cake!

Now I've been following the Uranium Prices for some time purely for the "long trade", as the short trade has been harder to evaluate as distressed traders attempting to wait it out then dropping their stock/positions into market at near any price. 

What did start to make me think that the market was turning was when Goldman Sachs and Deutsche Bank put the 'for sale' sign on Iran's old uranium supplier. Most traders must be sitting on significant losses based on the trading of Uranium specifically some banks that got into trading the cake.

Niger's main Areva mines appear to be on Care and Maintenance. There's also some taxation jostling which has contributed to the lower production as Areva renegotiate historic taxation and royalty contracts that look to benefit Niger for the first time since the 1970's far greater than the benefits Areva have had. The list of tax breaks and concessions is endless (as per Reuters) and appear to be "made at any cost to the country". More importantly Niger look to have tired of the iron first of Frances demands and look to amend their existing mining and taxation laws to enable them to increase their slice of the action. 

The market will start to change direction on Uranium especially in-light of Japan's restart to their Nuclear Generation, after all there weren't many other options. Perhaps a greater "regulation" but it looks as though there will be a steady flow of Uranium deals over the coming months both in merger and acquisitions but also the 'positive' news flow that will prompt these deals. 

Having been following Uranium all the way down, it doesn't make the person an expert of change, but with a significant number of companies limited in growth or even production at the current levels, its more than likely supply/demand & more importantly speculation, will lead to a significant rise to a range of around 46-49$/kilo over the next 12 months. Yes a punchy 35-40% increase, but let’s face it, Japan blighted the market as a result of the Fukushima disaster, so reopening will contribute to the returns to a 'more balanced market place as demand increases.' Albeit I'd be very surprised if it was immediately, there are a lot of banks sitting on stocks that need to unwind these positions, so perhaps a similar occurrence to the Platinum Market in the short-term. 

Japan Plan Keeps Nuclear as Key Energy Source AP Article

New World Resources - A Classic case of the market slowly pricing in the realistic returns

This is one of those examples where investors should pay attention, including funds and institutions but more importantly Private Investors. New World Resources (NWR) is a classic example of higher costs, too much debt and an unrealistic ability to make returns for shareholders evidenced by the dire share price performance. What value will be left for shareholders?

Investors should avoid or short companies like this, I have and will continue to do so. This has only come about by a company needing to leverage significantly just to maintain operations and/or productions. Investors seriously need to consider the leverage and what that means in a deteriorating market of the product the company sells, produces or manufactures. You'll note the commonalities with POG (Petropavlovsk: still can't spell it properly without checking) and the share price performance, yes at the current prices POG can maintain debt repayments/reduction but the question should be, when is there a decent return for shareholders?

New World Resources as of 24 January 2014

Rather sums it up just off the chart but its a very important example of something that should be avoided. Rule 1) Revised/Missed Targets 2) Increased Debt 3) Lower Prices 4) High costs & 5) Falling Knife syndrome or "belief of value" when there is not any!

Atb Fraser

Churchill Mining - Trading Suspension from 24th February 2014

Timing of jurisdictional ruling in the international arbitration claim against the Republic of Indonesia

Well it shall be an exciting ride over the next few days. Thanks Oli for also pointing it out.

Atb Fraser

Any old iron...overcooking, production & ignorance.

So we've had results from Rio Tinto Full Year Results , BHP Billiton PLC Results for the Half Year Ended 31 December 2013 and today Fortescue Metals (FMG-ASX) 2014 Interim Results.

What is a common theme is the increasing production and it appears no one is 'worried' about an over cooked super cycle which may be forced to change direction earlier due to massive oversupply. This isn't likely this year, but as increased production comes online even allowing for Rio's scaling back (Slightly of production) its still getting to a point where it will force a re-correction in the Iron Prices. I'm avoiding the provision of a chart to show this, as parties should do their own homework. However the price in my view is now becoming toppy as a result of over supply and lower than expected Chinese Growth. 

This also has an impact on Australia with an overcooking (perhaps cooked) Housing Market, massive reliance on exports to China and the revenues associated with that but more importantly is likely to cause a contraction in Australian Property prices...and the knock on banking issues that will cause. 

The Chinese Growth will also have an impact on the "Chinese" Bonds and local Government Debt. The expansion of Cities and Companies with Development Grants is fracturing global markets, as evidenced by the Solar Wafer Crisis that has taken near 4 years to recover and still in the throws of higher costs, low production and low wafer prices, albeit increasing nowhere near where they were at the peak. The expansion of production with almost blank cheques has been ignored by investment companies on the whole. The story of the 'Renewable Energy Corporation' would adequately cover the history of the entire sector when read in conjunction with Chinese Solar Company's defaults that I covered previously. 

As requested: List of All Listed Companies (Spreadsheet of all listed companies). 

Have a good week, I have a mosquito bite on my nose that is akin to a second head! The question is, will it double my intelligence. Any name suggestions welcome...

Continuing on...Pure Wafer discussions & Solar Panels...to CHL

Apologies for the IT Issues...

Pure Wafer PLC (PUR)

Having seen a significant increase in the the SP for those holding long, I've elected to take the same proportion of cash off the table as profit from the buy in. Purely because the market is now awaiting indicators and its positive to bank profits. This is perhaps shorter term than I liked but likewise, in the current market I believe its prudent.

Rurelec (RUR) appears to have performed a lot better than I thought in terms of the negative elements, perhaps because of the support of Santiago listing? Albeit I won't be complaining there having banked considerable profits. Ben, I'd be interested to hear how you're going on with that...so any update, not to be right but to find out how you'd done or how your fairing would be great.

For those following Gold Stocks the quality is starting to shine through, this perhaps may overlap to platinum in due course, but I'd not hold your breath. I'd avoid dross and overpaid boards where their performance is related to their share options rather than actual share price. It begs the questions why NYO still has the current board in light of the dire returns for shareholders there. Yes some market sentiment can be attributed to their performance, but there is a lot that stops with the board in terms of responsibility. The spat with Centamin Egypt has not exactly helped, albeit may be able to be leveraged off in due course for those willing to motivate certain elements. There was a rumour that NYO had an offer on the table at a significantly higher price than the current SP, if this was that case why was it not published/made public?

I'm not sure what is maintaining the current FTSE level, volumes down and little progress. This is in part mirrored by the recent results, although I'm perplex why Rio Tinto wasn't most people's favourite in light of their results. RIO were and are looking good, yes some risks but when compared to BLT Half Year Results with the paltry increase in dividend Rio wins. One could argue its BLT's prudent financial management to keep debt at or near the 30% of shareholder monies and a further near 10% repayment of debt is envisaged by end of 2014 Financial Year. 

BLT have not realised any  foreign exchange variances (losses), which is a surprise compared to its peers but the Oil bias may have helped this. Also BLT may have elected not to book derivative losses and in part because they booked some losses the previous year, which may result in an overall gain (Clear as mud). BLT, I've liked, more so than AAL, which I don't rate their assets or value but the market will no doubt prove me wrong. The investor should note BLT's Commodities Outlook, which for the first time mirrors mine to a good degree. The essence being oversupply due to low cost high quality shipments coming online and weaker than expected Chinese Growth. 

I'll perhaps review further when I have the time. 

Finally, Churchill Mining plc Jurisdictional Update  is noted, I suspect due to a high result of enquiries about 'when is the announcement coming?' Do investors really think all companies sit there not wanting to announce key news? Or are investors so pathetically impatient it shows there psychological trading model is flawed...perhaps due to over exposure or even playing with monies they cannot afford? One to think on!

Atb Fraser

Apologies they have just fixed it.

There seems to have been an issue with posting in the main; alleged IT problems. Apparently things have returned to normal (Test). Atb Fraser

Common-Sense: Rurelec Award

Two items that are most important and will significantly impact on valuations in the future, which I have downloaded and would advise others to do the same is the Financial Award (Spreadsheet) Annex A. 

The answer about costings are covered from pages 192 onwards Bolivia Vs. Rurelec Plc Award 04/02/2014. I will reread in the fullness of time, but suffice to say I have a few issues with 'why the costings' were not awarded. This also perhaps explains the lack of commentary on the award and costs. I will start the thought process off: Why was such a sized award claimed when weighted against the commentary in the award and Financial Award Spreedsheet? In essence can it be suggested, Rurelec cost themselves significant costs by over-claiming? 

If this lags the page up too much can people please message me due to its size. Atb Fraser

20140131 Award for Bolivia & Rurelec

Yesterday's Rurelec: BRR Media & the RNS...(More Legal)

Rurelec - (BRR Discussion) Wins Historic Bolivian Compensation Award

I was surprised not to hear about the Compensation being on the low side. It would appear Rurelec's strategy is to accept the matter quickly (nothing else they can do) and move on. With the exception of one message, I am so pleased people did the appropriate thing. This isn't some form of smoke up my own, there's nothing better than seeing people make profit. I'd also be interested to hear how Ben did or what his strategy is.

The derisory size of the award or the complete lack of costs based on Bolivia's actions being illegal and causing the Company/Shareholders a loss is disappointing. Surely common-sense states that costs were essential? However, the publication of the full award and decisions will no doubt answer a lot of questions for which I shall review. 

Rightly, as per Leggie's comment this is useful in working risks into awards with other companies Oxus and Churchill. The interesting element is, this past few weeks there's been some significantly lower awards. As discussed the other day on ML was the Redhall Group Plc (RHL), whose settlement was not only low, was contrary to all the boards assertions. Alas, there's something in terms of factoring in the risks which may lower the expectations. However I shall not change my investment case on these Companies until other variables change. Over the period for Rurelec there was significant profit, like what I have built in Churchill Mining and Oxus Gold Plc.

Irrespective, the matter is now moving forward for Rurelec. So for those of us whom are staying long-term anyway, it shall be an interesting time ahead for Rurelec. 

Now this is something that surprised me, whilst having a coffee yesterday I took a call from a trader. He's actually going long on Albermarle & Bond (ABM). No I was not smoking crack (I haven't smoked for 12 years), but was confused by his argument. He's off belief the Management with larger shareholders is going to try and take the company out cheap. I'm not sure the term cheap is the right word, but I shall certainly follow as it had crossed my mind, not enough to trade long though! It wasn't many days ago I was congratulating him on his trading prowess at going "large short on Barclays (LSE: BARC)" and a few well-timed plays on Facebook (too big for me for the moment).

What is a change for me is my plays on Apple (NASDAQ:AAPL). Its something I have steered away from as the juggernaut takes no prisoners. This is new for me, but the reasoning behind it is simple, for 20 months, I have been keeping a diary of when I would short and long according to the News and Market influences. I think I'm getting my head round the Company, albeit still on the low side at 70+% accuracy. With their increased focus on profit and margins, their should be some turn in the company, but my main basis is the trades. With Tech stocks comes litigation, which appears non-stop, the latest line ups appear to be Samsungs predictive text/wording which iPhone whom appears to have patented the format. I wonder when Nokia come to the fold and start a 'true party.' 

Staying with that theme Emblaze LSE:BLZ due to start the case with Apple this June 2014 (Jury Trial). The Apple and Microsoft proceedings are on-going. Emblaze Ltd Interim Management Statement 19th November 2013  (when you click on the link press Ctrl+F then search for the term "Legal proceedings in these two cases are ongoing" which will speed your search up.) This could have significance for Emblaze on the basis of any size of award. The Company is trading below the cash held...albeit without good reason, a quick glance across any coverage is limited, I would not say the company has pushed its viability or stock for some time. 

Atb Fraser

Rurelec result: Why Fraser's derisking works $35M is not the best result at all.

Exceptional work Fraser on the de-risking & playing all the way to the end-Will be some selling but hopefully some progress made- $35M whatever dividend is recovered I'm perplexed by the statements on it. NAV looks like 10p or thereabouts - no comment about it being a disappointing value Ianh ((thanks for the scribd tips).

Bolivian Award Decision - Website RNS Final 01-02-14

In the small hours of somewhere...

...whilst most investors were either binge drinking or comatose after binge drinking (apparently there's a direct correlation with investing and binge drinking) 

In the small hours of 1st February 2014, the Permanent Court of Arbitration in The Hague finally released the long expected arbitration  award of compensation to Rurelec, finding in favour of Rurelec.  The Board of Rurelec will issue formal summary of this award on the Company website over the course of the weekend.  This formal summary will be released verbatim as an RNS announcement at 7 am on Monday 3rd February.

Speaking today, Peter Earl, CEO of Rurelec, said, “I am delighted that the waiting is now over and we can at last analyse all 199 pages of the judgment and see what this award is worth in monetary terms to Rurelec .  The greatest gift we have received overnight from the Arbitration Panel is certainty so that we can at last fulfil our primary objective of building in Chile and Peru the new power plants which replace the net 270 MW of generation capacity which were taken from us, against our will, almost four years ago.  That wound can now heal.  The result is a complete vindication of the long and difficult hours we have put in to get compensation for our shareholders who had suffered a great wrong.”

Have a very good weekend! 

Atb Fraser