Morning Mumble: Rurelec: why has the market not been informed &...LGO (Cash)

Rurelec: So its been known for awhile but busyness meant I have been out partying and was waiting the post Friday news updates. We know Rurelec have had a material decrease in their award as a result of a number of elements a) Birdsong agreement with revised terms (which are unknown). b) were unwilling to play hard ball and seek recovery of Bolivian Assets c) had no alternative but to 'compromise' to obtain payment plus a few other items. 

It would appear from various news flows that Rurelec to receive $31.5 million for expropriation of shares. Staying with the 'suggested' amount Rurelec will receive, and with Rurelec's announcements, that matter has been reduced now to around £3.65M, not far off the gossip. The company requires funding and stock support the latter is unlikely including I dare say a reconsideration for the Santiago listing in light of the most recent announcement. 

It would be interesting to know why the £6.5m reduction has not been disclosed to market as its a material event and falls under disclosure. Now a contractual agreement has been made removes any commercial sensitivity. For this reason, I'm taking the view not to short or long, but to stop page coverage on the basis that the company has not only risks with disclosure but the ability to grow has been significantly impaired without additional funds. Further the information tones have changed with limited information creating greater risks due to speculation, one to watch for volatility to trade or a change in disclosure/news flow before returning to the stock.

Rurelec need to announce a) what monies they are receiving b) what exactly is happening with the Santiago Listing which I suspect was more about financial transparency than AIM Regulation. Surely if one was "going to achieve such a premium on the Santiago markets one would have merely cancelled AIM? 75% of the Votes required with Stirling holding a significant proportion not a difficult task.  Finally C, how they propose to finance the developments. There's a short fall on the planned receivables to the reality of the 02nd May 2014 announcement which is lacking the significant information a shareholder wouldneed. There's perhaps a reasonable explanation for this, but the fact remains it was not disclosed, I'm sure there will be a fanfare for the amount received...either way for the long-term buyers holders they should have still made significantly. 

Over to Rurelec to inform their holders.

We were discussing the LGO position the other day and it was surprising that a couple of people whom are better informed than I on oil asked a couple of interesting questions:

Question: Did the Company known about the "drilling report" Leni Gas & Oil PLC Goudron Drilling 28th April 2014 showing the discovery of Oil on or before the Funding and New Trinidad producing fields review 25th April 2014. If this was indeed the case, it raises questions of why LGO raised the funds at that time to "assess a number of potentially attractive producing oil fields in Trinidad." C

Question: following on from above, were LGO so desperate for cash to pay someone/something urgently before further details came out they would have waited for a full assessment of the Leni Gas & Oil PLC Update on GY-664 Goudron, Trinidad. (i.e. a better placing price).

Question: Is LGO suggesting that the full amount of the funds was/is required to assess a number of potentially attractive producing oil fields in Trinidad, which have recently been made available to the Company. £1m to assess 'further opportunities', Two readers I know, your fees are not high enough! add a zero on the end please...don't send me the bill.

  

Nickel: Has anyone noticed the price of Nickel? Well there's a surprise...Will Indonesia be caving in at 9 month mark as native Indo miners lay people off, businesses suffering and China has an issue with the price and the pig iron mills closing down in their homeland. Nickel is 25% up (on futures) from the beginning of the year and some parties expecting it to Double. I closed a number of larger positions perhaps too early to make solid gains purely on the basis of common-sense. Longs working positively...

(Disclosure: No position held in Rurelec as of 02nd May 2014).