Atalaya Mining Share Discussion Threads

[diablo26261] 07/3/2017 08:32

I agree LLB - we have won several points technically and prevented the initial payment and any legal redress but in the end will almost certainly pay the loan back quicker assuming the price of copper holds up though clause was there before as we can now see (protects us if it falls ...)

There is no leverage to negotiate with Astor now (did we try before this came to court ?)

All in all, one aspect of uncertainty is addressed but will not incentivise many investors to buy the shares until the loan is repaid.

Will be interesting to see what changes the brokers make when they revisit based upon this.

[acamas] 07/3/2017 08:31

But what is "free cash" and who decides it ATYM?

[superbobtaylor] 07/3/2017 08:25

LLB,

We never "got handed an accelerated payment plan instead". It was there all of the time. Astor could have blocked payment of a divi and invoked this clause at any point once free cash flow exceeded the payment due under the (now defunct) payment plan.

This way is better for us. We have no deadlines and can pay out of free cash as and when ready.

SBT

[laurence llewelyn binliner] 07/3/2017 08:20

We might have won the 'trigger' point, and the 'reasonable endeavours' point, but it was a bit of a hollow victory, as we got handed an accelerated payment plan instead..!

What we have really won is some time, with no payments and no interest for the 1st and 2nd anniversary points, with no fines or damages..

I don't see we've won much leverage to make many changes to the /DMT brokerage fee, or the +$3.00 Copper payment but I'm sure the company will be trying to use the 'free cash' ruling to our advantage somehow..!

No real winners or losers, and the clue is in the ruling with this in the header.. 'Neutral Citation Number'

I'm pleased to see it put to bed and we can move forward.., now let's just get on with it, pay Astor off, and get the deferred consideration gone..

#SBT, in comparison to the original 6/7 year plan we knew about, I expect this to be accelerated now, interesting to uncover the dividend blocking clause that we didn't know about..!

[rougepierre] 07/3/2017 08:18

That Orion offer looks awfully similar to the loans they've made to Wetherly (WTI)...

[shortarm] 07/3/2017 08:17

Good summary SBT.

[superbobtaylor] 07/3/2017 08:13

Who “won” and who “lost” is subjective but let’s look at the facts from the judgement.

There are basically 3 rulings made by the judge.

1. Astor’s primary case argued that deferred consideration is payable now and was triggered (in effect) by the equity fund raising as an intra company loan was made.

AYTM won this point.

2. Astor’s secondary case is that AYTM were in breach of contract as they did not make all reasonable endeavours to secure a senior debt facility.

AYTM won this point.

3. Astor looked to re-enforce the fact that clause 6(g)(iv) of the Master Agreement (see below) still stands. This is that, effectively, the debt is still owed and must be paid off before the money can be spent on anything else of benefit to the shareholders.

Astor won this point.

So points 1 and 2 are clear and have been discussed on this board before. Had AYTM lost either of these they would have been in trouble.

Point 3 is the kicker. Most of us wondered how Astor would get their money if the repayment clause had never been triggered. What we did not know about was clause 6(g)(iv) of the Master Agreement. This has been in existence since the start but never disclosed to us. It is, in effect, a clause that gives Astor the power to stop the company paying dividends, borrowing any further cash or investing substantial amounts in new projects without Astor’s permission. [Their lawyers were not that stupid after all] This permission was given for the equity fund raising.

It does not stop AYTM paying off all current debt owed, making good changes on the mine, expanding PYT etc before paying Astor.

So in a nutshell the company have lots of breathing space to pay this debt off and it carries no interest. However until they do so the company is blocked from redistributing profit to the shareholders in any form.

IMO this was a good result for AYTM.

PS – I see Orion were up to their usual tricks and kindly offered AYTM a WTI style $120m loan at 8% interest with a 4 year repayment plan. This was the only other option other than equity finance. Thank goodness they never took that……

SBT

Clause: 6(g)(iv)
"(A) not to make, declare or pay any dividend or distribution or make any repayment of or other payment in respect of loans from members of the EMED Group ("EMED Group Loans") (other than as required for up to USD 10 million per annum in aggregate for EMED Group expenses (excluding dividends or other distributions to shareholders of EMED) related to matters other than the Project ("EMED Group Expenses")), nor borrow or agree to borrow any amount other than pursuant to the Senior Debt Facility or EMED Group Loans without the prior written consent of [Astor] (not to be unreasonably withheld or delayed), until the Consideration has been paid in full to [Astor] in accordance with the terms of the Transaction Documents; and
(B) to apply any excess cash (after payment of operating expenses and sustaining capital expenditure for the Project, debt service requirements under the Senior Debt Facility and USD 10 million per annum for EMED Group Expenses (without double counting EMED Group Expenses taken into account under paragraph (A) above)) to pay any outstanding amounts of the Consideration due to [Astor] (including ... under the Loan Assignment) early."

[rougepierre] 07/3/2017 08:13

You lot don't know your alive...despite being retired, I work 25 hours a day and get up an hour before I go to bed to go down the coalface...while wielding a pick I'm sat on my bike at 13mph driving the generator to power my Sinclair ZX81 just so I can keep in touch on here...meals? I get the odd secondhand chip wrapper and pass it under my nose to keep the hunger pangs at bay...every Leap Year day I'm allowed to share a cardbox with 15 mates who are all invested to the tune of at least 3 shillings and fourpence in EMED..whoever they are...sorry...got to go...got a blister on my nose from the front wheel...

[shortarm] 07/3/2017 07:32

cognitive dissonance - you can always tell when some fwit wants to pretend he knows what he's on about!Sees a big word used by some other know it all grease ball and spews it out like he's down the pub with his mates from Oxford.Sorry but what an idiot!

[waterloo01] 07/3/2017 07:14

dofmeister thanks for posting. Lot's of detail and much of the past laid bare.

As is stands, we should be able to pay the full deferred consideration with one years profits. No rush though as there is no interest to pay or penalties, so after funding deferred supplier costs and some further drilling, I'd say it would be cleared in 18 - 24 months or less depending on negotiations and any corporate action to clear it earlier.

The 10m we can spend will be enough to get Touro to the point where we have permits and are ready to do the build. As was suggested here, I think we can fund that with debt/equity/loans/off takes when needed next year.

Further given the profits that will drive through over the next 12 months (assuming working at close to or above 10mta) then we could take on debt to fund Touro and pay off Astor at the same time and leave the company free to pay dividends.

It would leave the business with debts of say 250m euro, still well below the debt ratio of even the most prudent miners.

Lots of options and all within and on our terms.

[rich1e] 06/3/2017 22:21

Cleared the decks for a takeover.

Liabilities in the open. Divi's possibly moved further down the line. Take the cash now and invest it straight away for divi’s, if that what is desired, why wait three or four years?

[charlieeee] 06/3/2017 21:27

Well, this BB seems (to its credit) to have been positively sporting (both literally and metaphorically speaking)about losing the case: unlike iii, where, such is the level of cognitive dissonance that they still think ATYM won!

I think I am probably with Lango and will be surprised if there is no appeal.

On iii, queries have been raised about implementation and one of the issues that is not clear in the summary is whether the Judge realized that ATYM had current liabilities needing to be paid out of the early profits: maybe that is covered in the full judgement, which I have not seen (perhaps part of the definition of "free cash").

It has been suggested that ATYM could delay payment, but in many ways, it is better to just move on and get it paid, particularly as it will now be back on the balance sheet and mostly under current liabilities as it is no longer spread over a defined number of years.

If there is no appeal, that would indicate a collective rather than Trafigura dominated decision: others with less "reputation" skin in the game may recognize how detrimental this is re investor sentiment and clogging up management time.

[sithuk] 06/3/2017 20:31

What is our capacity now that the plant is commissioned?

[laurence llewelyn binliner] 06/3/2017 18:52

#Husbod, the timing of the wage negotiations is terrible, it's a 4 year cycle, and it just happened to land on rising Copper price after bottoming out, but the Union is demanding a 7% salary rise, a $49,000 bonus per worker and equal rights for new employees as existing ones, there are some new Chilean labour laws coming into play 01.04.2017 which I don't know the in/out, if those demands are fair or not is another matter..!

BHP's CEO is of the opinion that the workers are already rewarded handsomely.., but there's a 100KT Copper supply shortage now, and heading into Month 2..

But on ATYM, the share price didn't move much did it, it's another hurdle out of the way on our path, and we can now crank up the Mills and get some cash in the Till, perfectly timed ahead of Q1 results.. I'm happy enough with the ruling today.. just pay it out of profits, + we get another $10M a year to sink into any other projects we pursue free cash is available..

18-24 months to flatten Astors debt..? by which time we will be ready to finance Touro..

[estienne] 06/3/2017 18:50

Hang on wasn't it going to rocket if the Court judgement was in favour of Atalaya?

[husbod] 06/3/2017 18:39

What is remark?

[husbod] 06/3/2017 18:38

Llb - I'm a BHP shareholder and would like to think they will treat their Chilean workforce fairly. I would also like to think that the days of first world companies exploiting developing world employees is over. BHP and the rest of them make enough money to make a good returns without having to screw the workers. It would be interesting to know what a Chilean copper miner gets compared to a Spanish one after taking into account living costs etc

[husbod] 06/3/2017 18:29

Thanks remarkonsoc. That clinches it then.

[laurence llewelyn binliner] 06/3/2017 18:01

Escondida update:

A strike at the world’s largest copper mine faces a critical phase this week as the union expects management to tempt workers with an offer that could end the stoppage in northern Chile.

After 30 days of strike, on March 10, BHP Billiton Ltd.’s Escondida can legally make individual offers to workers. If it manages to convince more than half of the workforce, the union will have to concede defeat and end to the strike.

"Everything will change on day 30," Carlos Allendes, a union spokesman, said by telephone on Friday. "The company is probably betting that some workers will go back to the mine, but we feel confident that many won’t accept worse benefits than we have now."

Big week for Copper, which seems to have been sold off today..

[husbod] 06/3/2017 17:56

You lot are wimps.I run up Pen y Fan every morning as the sun rises before swimming back down the Taff to Cardiff where I do a full day labouring on a building site. And I'm 85.And now I'm trying to decide what to sell to buy more ATYM as everything points to it being a screaming buy. It's still under 5p proper money and I just can't understand why anyone would possibly want to sell at this juncture.Or am I just losing all grip on reality?