Stans Energy Corp V.HRE.H

RE:RE:insider sales

[Kaliahk]

Sorry, I have no involvement with the Kyrgyz.  I am a US lawyer (but with no experience in international arbitration).  My user name is actually a misspelling of a river near Cape Yakataga (Kahliak R.) in Alaska where I have fished and hunted.  I rode this stock down from a $1 to $0.20 while believing what the Stans management was telling me, before looking into what was really the situation.  At that point decided I would just take the chance since my position was not that large.  Have really only tried to disclose my thoughts to provide guidance to other shareholders on here, but this is not the place for statements critical of a company, it is really just a stock fan board.

Agree with your post about the ability of Stans to request reconsideration, but in my experience judge's don't change their minds very often.  A long shot.

I really don't see how Stans could or would regain the licenses directly.  Who would invest or loan the $millions for Stans to develop the mines after what has already occurred, and some of the questionable prior decisionmaking?  Just don't see how it could work.  The one alternative would be to JV with a company that has the financial stroke to get it done, and to present a real threat to the Kyrgyz government if they mess with them (Russian, Chinese?).  Stans could contribute the processing plant and metallurgical data and other work.  The other company provides the funds to develop the project going forward.  This would probably result in a minority interest in a larger company owning the mine, but may be a way to receive a greater return than selling the processing plant outright (or the possibility that the Kyrgyz would seize that plant in a legal process like eminent domain).  Since Stans does have the historical data and has already done metallurgical work, there would seem to be a benefit for the Kyrgyz and the purchaser to deal with Stans, rather than a scorched earth battle for the plant.Who knows if there is any current interest out there for this project, and whether they would have any interest in working with Stans.

Now that I have read the August 22 MD&A on Sedar, I wonder if Stans will even have the plant available to sell or JV with.  While they say they have not adjusted their accounting to reflect the decision, it does show that Stans owes $9.9 million as of June 30, 2019 on the loan from the original litigation funder plus an undisclosed finance fee not to exceed the amount of the recovery. See page 12.  The MD&A also states the new funding arrangement was incremental to the original funding on a non-recourse basis;it now totals about $5.1 million; Stans gave certain warranties to the funder; this loan is secured by all the real and personal property of Stans; the funder's fee will not exceed the total recovery from Kyrgyz. See page 12-13  This is vague as to whether Stans made warranties that could result in an obligation for which the plant and metallurgical information being foreclosed upon.  Wish it was more clear.  Current liabilities are stated as $16.1 million - so that is about $2 million more than litigation advances.

There was some talk of 3-4 times the amount advanced as the funder's fee in which case the original funder would be entiled to $27 million or an amount not to exceed the net total recovery, with the second funder receiving $15 million for its 3X funder's fee.  Clearly if the 3-4 times the amount is the standard, there is no money for Stans from the recovery.  If Stans made some warranty as to a larger recovery to the second funder, then its plant and other personal property is subject to foreclosure.  What I have some difficulty reconciling is the non-recourse nature of the funding but the need for a security agreement - that could be benign or it could have some real impact here.

These are just my musings and uninformed opinions, DYODD.