RE: RE: RE: RE: RE: Very sad to see FIU and .... It's definitely a horrible deal I agree. However, he did get MWS running properly. And we hit all targets on that. Ez I don't know where the money is going. But, how many deaths did we have there. That totally shot the mine plan in the foot how many times? Dumb incompetant workers and instability... But that's manslaughter if it was malicious at the least... Permit issues. Maybe idiotic. But is Deon really at fault for that. I looked into that, and it is because we didn't have the funds for the rehabilitation plan for MWS. That's it. Get it capitalized properly, and we'll get the permit back just like that. Snap of the fingers for any buyer with some funds. Hello, what happens when AGA takes over. No more risk, even though we don't actually need the permit as it's a surface operation. The water permit is just smoke and mirrors now. That's group does that with countless mines, and it joined the line of multiple other projects they are appealing where nothing will happen. Lots of noise, nothing happens. And this project actually is cleaning up the water in the area. Go figure.
This deal stinks, but I think many of the issues we've had were out of his control. Also, most of the loss is due to selling 40%+ of its gold at $400oz in the royalty stream with Franco Nevada. That was the old management.
And the environmental groups. They have caused a major nuisance. But they aren't just on our back. Again out of his control. A lot of it is just from a local landowner who has been trying to get FIU to buy his land for years at some exorbitant price. Those pipes he said were leaking weren't even ours.
I get how you feel that way about Dion, and there is understandably much anger. But pretend you're in Dion's shoes. What do you do? Our backs are against a wall, and I think it is Gold One and AGA, who are out to take advantage of us mostly and put together their bids to cause the maximum difficulty for us in saying no. For example, if Gold One bids, 150m. We don't need the AGA deal because its enough to pay off the dilutive bonds. (Although I think a partial buyback is still much preferable anyway) If AGA bids 350m or more, it massively reduces the need to sell Ez too, as we can pay off all our debt and have funds to complete the new mine plan. So we shall see what happens over the next quarter.
If anyone comes in therefore for either asset, it throws them both for a loop as it completely changes the game, and our need to accept a distressed price of the other asset.
What ticks me off the most is that now its a 7%gold stream instead of 40%+ , we're giving it away. That's going to drop our cost massively, as this is factored into the high costs there. It's a big if, but with this change, and reduced interest payments on the 300+ million of debt we have, if we did get a decent offer for MWS, we might actually be able to turn a profit on Ez now. I think that's around 25m a year in interest alone gone. 150X.4% +11% 2013 notes. I don't know what the Rand note pay off hand. So in that ballpark anyway. But that's a lot. Then the savings on the change in royalty. At current prices and production, that's around 5m a quarter. So 11m a quarter difference right there in average cash flow. So 40m plus, depending on gold price/ year. Someone can figure it out exactly if they want. But it is for sure more then our entire market cap in savings alone from these changes, if we did accept the AGA transaction pay off our debt and go with Ez.
I think that would put us cash flow positive right there on EZ or at least break even. Part of the increased cash drain this quarter fyi for everyone is because the notes had a coupon payment in Jan. And with half the workforce only working the most profitable areas. They may actually have a formula that works with those two changes.
Obviously that's a big if. But I don't think it is Dion's fault totally if AGA, and Gold One are colluding and playing hardball. Getting an offer on the table, is not a bad play to start as it may get more interest. If it is cash flow positive. Vote yes on MWS. No dilution, we don't need funding. Then its worth significantly more then the 70 m Gold One is offering. What I don't know. But we have a new plant, 2.5 ish m oz p and p resources. Plus 21 m inferred, plus the uranium and cash flow positive? My point is we have options still, and the time for voting is a long way off.
If it is worth half its old NAV even we are talking over 70c a share. And our debt debt paid off with the MWS deal. Anyway it's on us what to do. Depending on where the share price is, our best option changes. The key is getting this company in some form past June, without totally diluting ourselves. What they report in the next quarter will heavily influence my vote. Obviously I'm inclined to dump EZ, but we need to figure out going forward where it is at. Anyway, lots of time, and all is lost yet.