Atalaya Mining Share Discussion Threads

[sirmoori] 22/12/2016 16:58

aaannnnd, boringly, back to copper:

[laurence llewelyn binliner] 22/12/2016 14:32

#wanderer1210_0, we won't mention Greece, but Train drivers earn £60K, the luxury air conditioned stations for public transport are free for travel, Hair dressers get danger money added to their salary because they work with Peroxide, Civil servants can retire at 55 with 80% final salary pensions.. and they wonder why they are in a muddle..

They royally had the EU's pants down, took all the loans with no believable / credible repayment strategy in place, Stevie Wonder could have seen that train crash coming.., but we won't go there.. :o)

So what's the shelf life of the great Euro project..? another 3-5 years before the wheels come off..? I predict a riot...!

The Catalans / Basque regions want to break away from Spain
The Bavarians want to break away from Germany
The Venetians from Italy
Corsica from France
Denmark is looking flakey
Belgium is split in two

[husbod] 22/12/2016 14:21

Ok wanderer I promise not to mention Greece again...oops sorry.... but only if you promise never to mention public sector pensions. I can feel my blood pressure rising already.

[husbod] 22/12/2016 11:16

Could be even more interesting LLB cos the Italian government really don't want the bondholders to suffer (apparently there are a lot of small such holders ie actual Italian individuals) so they have just passed a law to create a government fund of 20b euros to assist/nationalise the Banks which in turn will be contrary to EU law re state aid so it will be Rome versus Brussels which will also by definition upset the Bundesbank so Berlin will also be involved.

No doubt yet another sordid EU compromise will be reached to keep the Great Project alive despite it continuing to be contrary to all economic common sense.

In the meantime the Greek crisis rumbles on with the government giving hand outs to pensioners which further ups the Greek debt and is completely contrary to the existing agreements and the EU is paralysed by the thought of looking scrooge-like at Christmas.

Yer couldn't make it up!

[laurence llewelyn binliner] 22/12/2016 09:45

Bloomberg are reporting that the Italian Monte Peschi bank is about to fail to raise the full €5BN needed to shore up it's reserves.., most likely leading to government intervention and a hit for Bond holders.., which is the 1st in a line of Italian banks about to have the same problem.

The Euro is only going 1 way which helps us out as we are buying all our labour in Euros, so operating costs are going to get relatively cheaper to the dollar as we head into 2017..

[manfrom] 22/12/2016 08:51

Oh look! A 5K sell 2p under the bid.......how unusual?

[acamas] 21/12/2016 19:44

LLB,

I am with you all the way

[laurence llewelyn binliner] 21/12/2016 19:14

#lango, this was the mining contractor who had some invoices deferred for 12 months, and this is covered in full by the €8.2M grant we are now entitled to receive having got to 9.5MTPA...

Good negotiating by the BOD to incentivise this move by using the carrot of future business with the same mining contractor on the next project I would suggest..

[langostino] 21/12/2016 18:58

Does no one ask themselves why, with such apparent bounty flowing in, Trafigura has to cough up 8million euros to pay the wages bill? Not a loan of course!

[iankn73] 21/12/2016 18:51

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As always DYOR

[rougepierre] 21/12/2016 18:44

copper looking good for next year...

silver to follow...?

[acamas] 21/12/2016 17:44

tedoby2,

I think that is what Traf will rely on in Court to win the day. Hoisted by your own Petard Astor.

Also I believe both parties want it to go to Court for clarification of Contractual Law

[tedoby2] 21/12/2016 17:29

Husbod - "So lax drafting by Astor's solicitors could actually save the day for them if they get an overly sympathetic judge."

"Contra Proferentum" is a cornerstone of contract law I believe.

At current exchange rates we're saving around 7% or so on the costs given in the latest appraisal and NI43-101 So AISC's may be around $1.65 not $1.80! Therefore perhaps the margin is more like $0.70/lb at today's Cu price LLB

GLA

[laurence llewelyn binliner] 21/12/2016 15:14

#Husbod, that's about the size of it..

"I suspect you had meant to cover the situation that has arisen but you failed to do so"..

Intending to cover something off contractually and doing it is a very different matter when it comes to the letter of the law..

The result could be no debt due, a compromise reached, a reduced number agreed.., or Astor could even ask for more too..!

Astor still have all their brokerage fees in place for every single DMT they sell for us, so they are getting their dues here, they will also get a deferred consideration if Copper is above 'x' for 'y' amount of time..

Worst case IMO we will have to stick to the original terms and it's $53M over 7 years, ($7.5M p/a) but this can almost be be covered off in full in 2017 at the current Copper price and a $0.50 margin.

[acamas] 21/12/2016 14:36

mpclag,

This board seems to favour Traf and their solicitors having a good shout of winning. So why not give it a go.

Many of the posters here believe Traf to be wide boys so lets see just how good they are with escape clauses via the letter of the law.

As people have also said if Astor lose it makes a case for them to challenge their own legal eagles in court

[waterloo01] 21/12/2016 14:31

Another possibility is that they will settle before hand for a one off cash payment.

[husbod] 21/12/2016 14:31

In my experience such legal documents tend to start off with a clause headed "Definitions" and that "Senior Debt Facility" would have been defined.

The fact that it hasn't could work either way for us as it will now need the Court to decide whereas if it should be defined by way of borrowing from a Bank or other third party. If it had been so defined we would be home and dry. So lax drafting by Astor's solicitors could actually save the day for them if they get an overly sympathetic judge.

Still think any commercial court judge is going to say something along the lines of "I suspect you had meant to cover the situation that has arisen but you failed to do so, so hard luck"

[mpclag] 21/12/2016 14:06

Why use senior debt when its gonna cost in excess of $53m?

[laurence llewelyn binliner] 21/12/2016 13:21

My guess is the potential for navigating the Astor debt obligation was uncovered when Trafigura were doing their due diligence a couple of years ago and before they bought in...? Trafigura are well known for 'sharp practice', and who can blame them for looking closer at this, it's a major oversight by Astors lawyers..., the fact remains that we did not use Senior bank debt to fund the project...Interesting times ahead in Jan/Feb..

[mpclag] 21/12/2016 12:08

If i'm reading this correctly, it seems to me that atalaya agreed to pay the $53m and assumed it would be funded by a debt facilty (as did the seller). What happened in fact was that equity was issued instead of debt and technically no senior debt so no trigger of the payment. That said, the courts may decide on the spirit of the agreement. ie $53 m will be paid when Atalya has the means to pay. Very badly worded contract on the part of MRI when they sold and certainly worth a challenge in the courts. imho could go either way. If we lose, then we may have to pay $10m a year for roughly 6 years. Quite a chunk form the bottom line and could be the reason the share price is falling back a tad.

[acamas] 21/12/2016 11:27

mpclag,

This is the actual wording on the debt


On 2 November 2015, the Company announced that it received a formal claim from Astor Management AG ("Astor") (the "Claim"). The Claim was made in the High Court of Justice in London against the Company and certain of its subsidiaries (the "Group"). The Claim arose out of the issues previously notified to the market, particularly within the announcement made on 28 May 2015 and as disclosed in the notes to the Group's consolidated financial statements. As set out in the Group's consolidated financial statements, in September 2008, the Group moved to 100% ownership of ARM (and thus full ownership of Proyecto Riotinto) by acquiring the remaining 49% of the issued capital of ARM. The cost of the acquisition was satisfied by issuing 39,140,000 ordinary shares to MRI Trading AG ("MRI") at an issue price of 21p per ordinary share and a deferred cash settlement of up to EUR53 million (including consideration for the assignment of loans of EUR9,116,617.30 owed to companies related to MRI incurred in relation to the operation of Proyecto Riotinto) and up to a further EUR15,900,000 depending upon the price of copper ("Deferred Consideration"). The obligation to pay the Deferred Consideration is subject to the satisfaction of the following conditions (the "Conditions"): (a) all authorisations to restart mining activities in Proyecto Riotinto having been granted by the Junta de Andalucía ("Permit Approval"); and (b) the Group securing a senior debt finance facility for a sum sufficient to restart mining operations at Proyecto Riotinto ("Senior Debt Facility") and being able to draw down funds under the Senior Debt Facility. The Deferred Consideration is payable in instalments over a period of six or seven years following satisfaction of the Conditions. On 11 November 2011, MRI novated its right to be paid the Deferred Consideration to Astor.

My understanding is that it is not included in the Balance sheet due to the fact that the court outcome is not yet known and when it is it will be repaid over 6 or 7 years if we lose the case