Issues raised by Tinytot and ArlekinoTinytot:
The reference is in the MD&A filed on Sedar for the Q ending June 30, 2017 Page 4.
The last Bullet on the page. Yes, the lenders want MPVD to do the study. The lenders are picking the consultant to do the pricing analysis. Importantly, there is also a reconciliation required of the production to date verses the FS based on carat size, quality, color etc. etc.
The forecast for the remainder of 2017 by MPVD is $70-90 per carat. As pointed out, there has been no discussion or PR about any fancy or specials turning up at the mine in the more recent past. Just not finding any anymore, or do we have a problem with the production "cut" from the operator? .
If what Arlekino says is right, that MPVD doesn no have at least one full time person in charge of security or monitoring the sort and split and the production of fancies up at the mine and at the sort and split facility, IMO this is a huge problem for both the MPVD minority shareholders, and eventually this BOD and their accountants and auditors.
How could you possibly give an audit opinion on the JV non operated partner if the JV non-operated partner did not have some mechanism and security in place to verify the production, fancies, specials, the sort, and the split, and the secured transportation of all of the above process........ie............knowing that MPVD could not possibly do this, and was relying on the "faith" of the operator, DeBeers Canada to verify the production and the split, I can not see how the auditor could issue an opinion on the MPVD financial statements.
I thought I read somewhere that all production was being transported from the mine to a facility in Yellowknife where the sort and split was taking place. The security of the transport and the sort and split is of utmost importance to MPVD shareholders. Nobody should trust the JV partner Debeers Canada just because of the longetivity and market share of the named partner. Operators screw their partners every day of the week, particularly the non operated partner. Oh, and by the way, we are paying DeBeers Canada about $1M a Quarter to be the "manager" of the JV mine operation.
I also now think that the few who posted here just lately about the technicals in the FS regarding the sample size from the pipes, and the mine sequence, and the "layers" etc. etc. that is all just designed obfuscation. PE had the presentation and the forecast of OCF and EBITDA right on the website and presented to the public for price per carat of about $160 US right up until the actual numbers started to come in. My educated guess is that these would be DeBeers people in Canada involved in the operation and administration of the mine and the JV, making comment so MPVD shareholders/bankers do not pursue the more obvious concerns FIRST!.
If your running a company and have a JV partner, the most obvious kind of inventory shrinkage problem or inventory "sort" problem would be with these tiny little stones, followed by gold etc, which are more uniform quality per Oz. but still a high valued product in a very small size.
The other problem could be that the large minority shareholder who controls this BOD and the management of MPVD has cut a back room deal with the operator and left us poor shareholders of the public float of MPVD out in the dust! All of course to be "reconciled" later with the large JV operator after the lowball buyout of the MPVD stockholders. After all, DeBeers is controlled out of England by a company aptly called Anglo American.
Since this floresence is an issue according to MPVD MD&A, perhaps it is as simple as passing the stones under a light and thaat everything is on the "up and up" except that we get 2 to 1 on the floresence cut at the time of the sort. Prior to this GK going into production, I have never head of any discussion anywhere in the industry about floresence effecting the price or value of a diamond.
It does seem to me that MPVD does have enough OCF and EBITDA to make the interest/principle payments on the debt, and that the lenders will accept some kind of restructuring deal and ultimately we do pay down the debt principle in reasonable and timely delayed fashion. .