Atalaya Mining Share Discussion Threads

[rougepierre] 07/3/2017 11:46

Fair enough but tat doesn't prevent us developing Touro through another subsidiary with debt surely...?

[husbod] 07/3/2017 11:46

And Mr £5k is still around so no topping up yet pour moi.

[waterloo01] 07/3/2017 11:46

The key point is they are back in control, rather than facing a cash call now and can can get back to what they are good at, running a mine and expanding both PRT but also Touro. They can deal with Astor, once tempers have cooled later.

[charlieeee] 07/3/2017 11:25

Rp

There is a requirement to apply excess cash to paying off the deferred consideration.

"to apply any excess cash"

Unless ATYM do appeal (and having now seen the full reach of the Master Agreement, it is difficult to see that ATYM have any grounds whatsoever: far from being in any way negligent, it looks as if in addition to the belt, Astor's lawyers included the best designed set of legal braces imaginable), they will have to pay as cash becomes available.

If they do not, round two would undoubtedly include a range of very unpleasant consequences (Astor will know all about statutory insolvency procedures, triggered by non payment of as little as £750 and the circus that involves): all for no gain.

The general consensus of pay and move on is usually the right approach and it will be interesting to see if Trafigura steps into line or sticks its neck out.

It was wrong that such an important part of the Master Agreement was not included in the original RNS, when the Astor claim was received: in fairness to AL, he did, when questioned, say that it would be paid, as it was secured, but that is not quite the same as making relevant facts available to all.

Thanks to the poster who provided the Judgement: it provided such clarification of what otherwise looked to be a quite odd decision.

[husbod] 07/3/2017 11:04

can't imagine the Company is the least bit concerned about the prohibition on paying dividends as the whole emphasis has clearly been on capital expenditure whether it be on the expansion of PRT or the acquisition of new resources.

Those of you who do not suffer immediate memory loss will recall that I have been banging on about this for a couple of years and so confident was I that I wagered rouge that no divi would be paid before the 2018 AGM. I have tried to pull a fast one by recently telling rouge that the wager was for a crate of top class Rioja but overcome by a sudden sense of guilt I have to admit it was only for I bottle.

Anyway, the only downside of the Agreement with Astor is that it COULD mean that we might have to pay them off before developing Touro which is not something I had considered and I am obliged to, was it Waterloo, for his post setting out the clause in the Agreement of which none of us were aware. Presumably it is this possible restriction on expansion that our lawyers are looking at when considering whether to apply for leave to appeal.

All in all just another chapter in the epic that is the EMED/ATYM story.

[rougepierre] 07/3/2017 10:56

Seems very simple to me.

There is no longer any threat of a debt repayment schedule.

Atalya Minera that owns the mine is a subsidiary. The only prevention is paying cash to the parent or shareholders.

We could leave the net cash in the bank building up indefinitely without paying Astor a farthing.

Meanwhile Touro is a completely separate entity. The up to 80% share stake could be held directly by our parent or another subsidiary, thus enabling us to borrow money to develop it to the point where it starts throwing off its own cash.

So the consolidated balance sheet would have a debt to Astor of 53 million Euros and a debt to, say Orion/Traf for Touro on one side and a burgeoning cash balance on the other side.

At a time totally of our choosing we could pay off Astor.

Of course it is not a sensible way to run a company but there is nothing to stop ATYM declaring dividends, they would simply have to be rolled up until Astor was repaid...

Surely this simple scenario is enough to get Astor to the negotiating table, unless Ashwath Mehra wants his pound of flesh...?

AIMHO as usual...

[laurence llewelyn binliner] 07/3/2017 10:16

#ted, it's in Astors interest to make sure we are as profitable as possible now to ensure there is free cash to pay them the deferred settlement, trying to go back to appeal for more in fines/damages will only slow their repayments down, so they are better to stand off and take what we can repay.., call it the price for their legal/contractual oversights..!

#SBT, yes, the downside protection the open ended repayment terms with no fixed amounts, no interest, and only out of profits is very valuable come a downturn in profitability, for whatever reason..

[tedoby2] 07/3/2017 09:29

From Astors point of view they were looking for £20m to £30m out of this case including damages and costs. They haven't got a penny as far as I can see!

Moreover they may not see a payment for some time yet other than under the Sales Agreement. As it stands as ATYM hold most of the cards. Astor have no idea what the payments against the "Deferred Settlement" will be both in timing and numbers. So not great for their investors who may have thought they had a strong case.

Astor also carry the added risk of ATYM's future profitability now which they didn't foresee and how can they police it all and report on it.

They may also see they're not fulfilling their part of the contract under the Sales Agreement and that's also not great. They're doing nothing for it and they should be being proactive selling agents.It's being paid as a royalty rather than a commission and that wasn't the deal.

So why wouldn't they want to negotiate? I personally think we'll see them wanting to and that would enable us all to move forward with a clear future.

An appeal to the Supreme Court for either party isn't there by right. Permission has to be requested within a short time and in any event it may well be denied.

AIMHO

GLA

[superbobtaylor] 07/3/2017 09:22

"If they paid up Astor, And the workers then went on strike, We wouldn't be paying out anyway. so where is the logic"

The logic is that if we had a commercial loan which we could not repay due to a strike the lender would invoke whatever covenants are in put in place to cover missing a payment. i.e. Penalty clauses (See the way Orion get to strangle WTI every 3 months when they can't make their agreed loan repayments)

Astor don't have any control of when they get their money. All they can do is stop AYTM from distributing profit to the shareholders. As a 0% interest "loan" this will be paid off as slowly as makes practical sense to the company.

SBT

[reba] 07/3/2017 09:11

Super

If they paid up Astor, And the workers then went on strike, We wouldn't be paying out anyway. so where is the logic

[waterloo01] 07/3/2017 09:10

They can spend whatever they like on PRT but there's a limit to what makes business sense. I guess maybe getting the plant to 12mta and some drilling. I also don't think it will hold back Touro development. What we can't do is start paying dividends until it's cleared or renegotiated.

[superbobtaylor] 07/3/2017 09:05

Quite right Waterloo. Why would AYTM take out an interest bearing loan?

We can focus on paying our immediate liabilities and spending money on PRT before paying anything to Astor.

One other advantage of this situation is the downside protection it gives us. Should the CU price fall, workers go on strike, etc then we don't have to make any payment. Try negotiating that with Orion.....

SBT

[acamas] 07/3/2017 09:03

Waterloo01,

Thanks for that so it is up to management as to how they play it out. But we cannot develop TOURO before we pay off the debt. You can see I am totally confused here

[waterloo01] 07/3/2017 08:56

Acamas, we can spend what ever we like on PRT. remarkomsoc, because it's in our control as to when it gets paid and has no interest.

[reba] 07/3/2017 08:55

This paragraph sums the shareholders up completely.

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.

No wonder no-one wants to invest in ATYM until Astor is out of the way and fully paid up.

It's been tied up from the start.

Again we are the last to know, they are just playing games with us.

[acamas] 07/3/2017 08:50

SBT,

So we cannot develop the PRT before we pay off our debt. If that is the case then to my mind get rid of the debt instantly.

I was hoping we could use the cash on PRT and make them wait bit of a dog in the manager attitude

[superbobtaylor] 07/3/2017 08:43

LLB / diablo. Would you have preferred AYTM lost and HAD to immediately start repayments that we cannot afford?

The existence of clause 6(g)(iv) meant there was no way the debt would not be liable so this is the best result we could of realistically hoped for.

SBT

[waterloo01] 07/3/2017 08:43

If we had 48m in bank debt at 5% interest would we would be better off? In fact no but in terms of sentiment probably yes. It needs to be put in perspective. All the broker notes I've seen all include the Astor debt as a liability.

[superbobtaylor] 07/3/2017 08:41

Acamas - effectively yes. We can't spend the money on anything else until we have paid Astor so the onus is on us to do so.

SBT