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
Fraser
ReplyDeleteSo it was a stalling tactic and I guess it worked as such, moving back CHL by a year or so at not much cost in the scheme of things (perhaps a few hundred thousand).
A price in the mid 30s seems about right for the next day or so, as the market makers allow the short term holders to cash in and move on.
From the ROI perspective, balancing risk/reward, they will no doubt be getting advise to offer a credible by lowball amount which may be aimed at offering a nice round CHL £1 a share- this would cost them £133m excluding legals, around 1/8th of the total claim and putting the recent 48/50p share options in the money. This would have to be taken seriously, and could be left for a few months for when things here have settled down and the share price started to drift.
Interesting times- PFP have resumed their upward journey again today. Im long there but still adding.
Cheers. The Leggie
Evening all
ReplyDeleteWell missed the announcement and managed to sell at 36.5 just before 1pm. Not a bad profit but i see it had a high of nearly 80?? Did many trades go through at that? Missed it all at work. Hope you all fared better! Now deciding whether to put the profits back in should it fall back below 30.
All the best
Oli
Morning/Afternoon,
ReplyDeleteNot at all Oli, in terms of trades going through, I was short on CHL yesterday at 58 pence, despite IT issues I managed a nice 19.4 points, so am not complaining. I still have a small equity holding, however it was a clear cut short. I'd wait a few weeks and see where it balances there's no rush.
Leggie, re: Legals I just can't see ROI seeing common-sense yet. As we all know it was 'jurisdiction' not award or inference of the prospects of success. ROI would do well to see how "Churchill raise the cash."
Pathfinder Minerals: I've been acquiring over time, nothing major but getting a decent average.
Time will tell on both events!
I'm more interested in the Depreciation of Renminbi, as the Chinese traders who leverage at shocking levels may get torched during any currency depreciation; Iron Ore may move lower as well due to the "unwinding of positions."
Some interesting times ahead Atb Fraser
Fraser
ReplyDeleteRe CHL- I agree that CHL will need to raise cash again- they had $4.8m on 30/6/13 and legals cost them $4.2m in the prior 12 months, plus they stated they had enough to cover them for a year. I cant see a rights issue, given the cost and speed, so another placing coming. The share price is likely to drift now, so the sooner the better in my view. ROI aren't noted for the regular displays of wisdom (the nickel episode being a prime example) but Im sure their legals will be making recommendations based on their assessment of the CHL case.
As usual, lets see :-))
No doubt you will be interested in the SXX dev moves this am- another $280m needed but 70% less above ground disturbance and lower prod costs. Plus capacity to gear up prod further. Lots to digest there.
Cheers. The Leggie
Quite an interesting piece here re commodities, esp metals, and mainly views I would endorse, for what its worth-
ReplyDeletehttp://www.directorstalk.com/what-predictions-for-2014-does-vsa-capital-have-for-mining-investors/
Cheers. The Leggie
Errr not so sure there Leggie :-) Already you're seeing Gold being leveraged further pushing the price up near 5% in a month. I've said for a few months Gold was looking for indicators, the arbitrage between buying America and Dumping Asia had to stop, too many parties were making small but very consistent gains there...the direction is like to push forward, which may swell before equities has to realise Emerging Markets aren't "long only" for which a lot of companies appear ignorant of.
ReplyDeleteSome interesting times, but one compelling story will be the mergers and acquisitions in the small mining sector...they have no choice.
Atb Fraser
Fraser- yes- quite a broad piece and the gold part isn't one I would endorse personally- Ive almost given up calling the gold/silver direction in the long term, but short term calls are still possible.
ReplyDeleteThere are some consolidators in the small miners section hovering, but they will be and can afford to be quite picky, given the number of miners running out of cash. Put projects together with infrastructure seems to be the main driver.
Cheers. The Leggie
Todays CHL movements remind me of a Warren Buffett quote- "The stock market is a mechanism for transferring money from the impatient to the patient". The day trading mob are all trying to exit at the same time, with predictable results.
ReplyDeleteFraser- Re Uranium- Looks like the mkt is on your side as Cameco are on a fwd PE of 23 following a decent run, but Im centering in on three stocks at present, all quite different and none in Kazakstan-
1. Uranium Participation Corp - a pure uranium trade with no mining to get in the way
2. Energy Fuels (US) - They have the White Mesa mill and various deposits and whilst their mill has 8.0 mlb capacity, they plan on reducing prod from FY13 1.2mlb to just 0.4/0.5 mlb in 2014, which will mean they have to buy 0.3 mlb to met contract commitments. They can however v easily respond to higher demand and they look reasonable price if the mkt is turning.
3. Kivaliq Energy (Can- v v far north)- They are sitting on a v high grade deposit and have some other promising sites but are v remote, but they could be a cheap t/over for their neighbours if the price of uranium turns up. This would be v high risk but perhaps the price reflects this.
What are your thoughts in this area??- I think EFR are my likely route in at present.
Cheers. The Leggie
Late one for me Leggie, but perhaps Churchill and Indonesia are putting their heads together for a common-sense approach and resolution to this issue?
DeleteThere's 'noises' coming from various quarters of a £150M offer in respect of Churchill, I don't want to add to this as some of it may be market 'echo' of old news but more importantly, the market appear 'poised'.
For myself I'm acquiring via the profits of the shorts to increase my equity. I'm in no rush whatsoever as I don't feel it'll be tomorrow, but won't lose sleep if it was. Indeed patience always pays!
I'd perhaps look to small companies with costs all in around $23 a kilo :-)
Atb Fraser
Fraser- thx- is that $23 per pound or per kilo?- per kilo looks v nice if that's available but per pound is in range of some Ive screened.
ReplyDeleteCheers. The Leggie
Hi De Hi Leggie, I reckon F means lbs. F's had a long day kicking the arse out of greggs - very shrewd move on his part & disappointed he didnt discuss it here. F you need to ramp it up as much as I :-P just landed back in Cameroon from SA - SA has a lot of tensions which the world press are ignoring - from Indo the gossip is that meetings have been arranged for next month with CHL - with all ranting about it it might be speculation ? Cheers Ianh
ReplyDeleteHi guys, hope your all well!?
ReplyDeleteInteresting discussions.
Glad i sold all of my churchill on the day. Thinking if it can get back to 24 again i will re-buy with my profits into my ISA. No idea how it will pan out in terms of long term or short, but £150m to get the issue done with and move on would be sensible for ROI. Whether this would be accepted i don't know but i would have thought that would put the share price at a near all time high with few investors having paid higher.
I didn't realise your in Sirius Leggie. Some people at work have been 'selling me it' for some time now. Ive just never liked the idea of the constant issuing of shares. Still a few £million left to issue i believe? I viewed it more of a trade to try in a couple of months for the mining app.
Don't suppose anyone's any wiser regarding metro Baltic's court date? The court never got back to me after requesting i explain my interest.
Regards
Oli
Morning/Afternoon,
ReplyDeleteMakes sense Leggie. I've been proactively covering most of the uranium producers to look for weakness in their balance sheets to short. As you are long only, I would not consider any company with costs above that mark give or take and I would include all "board" costs (all in figure) rather than just operational as there is a bug difference with someone.
Oli, your Churchill Wish may be granted as people are "margined" and/or timed out of their trades. That is the beauty of these stocks, you can more or less play them very well until such time as the final decision is known.
Ian, consider yourself told off for the crack of dawn phone call! With Greggs, As you know it had to come to a point where it stopped the gains *(in the short term). The company has funded itself from within. The cash flow is good, but the margins despite increased sales appears to be getting smaller. It was unsurprising as people push for healthier offerings that Greggs would suffer as a result of brand perception. Without filling this comment box with all my calculations, I have a target price of 410. Numbers below expectations, despite expansion...Remember Ian it's not a "tipsters" page but discussions...
Atb Fraser
Finally we have a response from the powers that are Blogspot. It appears when Ian set up my commentary that it caused an error in the "published" elements which stopped both of us posting. As such, we've been told to have one publisher (for a month) which we will identify at the end of text. As you can see, today I tried posting under Ian's ID and the post doesn't appear but does in email format. Not the best, so Ian will be using mine from now on and we will both identify ourselves at the end of post until they've fixed it! All the best Fraser
ReplyDeleteHi guys- good morning from Nottingham (please adjust to your relative timezones)-
ReplyDeleteIan- thx for update- I made an inv in Ur Energy last night- $22/lb prod costs (my calcs for life on mine) and several nice hedges until 2019 (between 1/3rd and 1/2 prod hedged), giving $63/lb average selling cost in 2013. They are in the lowest quartile for cash costs and I have more on them here, if anyone is interested. Thanks Fraser for your input here- v helpful as usual. Im long uranium now :-))
Oli- Re SXX - I have friends in Pickering so I picked up on SXX sometime ago- they have a SEDA, which will dilute via new shares over the next few months, but it is for only 5% of so of the shares in issue and it was arranged at a time when they were in some disarray so Im really focused on whether they will get permission (the odds got much better after they went underground for delivery to port yesterday, as the environmental requirements were a big hurdle re their pipeline build) and the funding (more tricky, as £2bn or so needed, but not unreachable imo) over the next year. My average is around 10p, after adding at 6.6p last year, and Im looking for 20/25p by June (July is when the planning apps are submitted), when I will hopefully top slice.
As usual, lets see- I would like to see the project succeed as the area and the UK needs it but I will try to not get too sentimental here.
Re MET- nice try but the courts seem to be consistent in holding this information back.
Cheers. The Leggie
Hi Leggie, you can't go to far wrong with that Ur Energy's had some pretty good gains in recent weeks so I'm not so sure it shall continue in the short term, albeit most "brokers" are just switching on to the idea of Uranium being 'higher' up the demand curve than they envisaged. Remember though Japan don't give an indicative time-frame but likewise they 'cannot afford to be delaying the process too long."
ReplyDeleteKazakhmys (KAZ) is motoring again as positions get closed out. I am very surprised parties held their short positions open on results day, even the most dire assets are being given a glimmer of hope. Their costs came in bang on the money for me, and despite the prices being lower, they managed to 'chuck enough at the market' to improve their situation but they’re still losing 3cents a pound by my estimates. Debt, even allowing for disposals is slightly ahead and although the commentary is "they are considering" partnering options, they have no choice; in fact nothing will progress without “partners” in my opinion.
Anyone for a cash call? Even allowing for the Ekibastuz GRES-1 disposal there’s still a requirement to fund raising before partner or “their terms” could be significantly impacted.
Atb Fraser
Fraser- yes- thx re Japan- Im also aware that they have some uranium stocks in Japan which will help them avoid spot purchases and given them an orderly re-entry into the mkt.
ReplyDeleteRe KAZ- coming off the spike now, and the major positive for me is that they are considering spinning off the "bad" part of the business (Zhegkazgan assets)- it is around half their prod (140kt or so) but I have 100kt of this as being loss making and the regional gov have hinted at financial support, as there are 22k workers /25% of the regions workforce employed here. Good luck to Vladimir Kim if he takes that on himself. Cash is an issue, esp given the new project they have bought and the cost overruns elsewhere. I can see the price drifting down before the close, as the extensive update gets digested.
Cheers. The Leggie