meryl lynch, page-10

What I think ADY needs to do (and I should know, being an anonymous internet poster!) i this;

- Find a better director with iron ore pedigree, to replace Blumberg.
- Find a decent MD for the iron business, because while its nice to think of PT sitting on both Boards, if he can't avoid $13M feckups with contracts while running one ship, while he's doing two, he'll screw both up. PT might then be able to avoid similar clusterclucks while trying to turn Rincon Lithium into "$2.50 a share!!!" like I've heard on here
- Option 1 (an option not underwritten by a broker!): Sell the iron ore mines to someone who has some cash and enough clout to actually get the damn stuff sorted. Clearly ADY can't manage the current operations properly let alone a port expansion and a heptupling of throughput (actual vs planned). Use the cash to advance RLL.
- PT should stop treaing the lithium mine like a financial instrument. While its nice to think of forward selling a lot of your commodity for a consideration of the nominal pprofit, in order to finance a mine, this is something similar to margin lending insofar as it is a financial gamble that you will actually make the lithium, and the gamble is secured no doubt by a general charge over the assets of RLL (viz. the lithium).

Similar to my reservations about putting a charge over the iron stockpile (again, see ANZ for what banks do when there's a whiff of schnitz around and they are sitting on paper profits), the practise of putting a charge in place over your unmined lithium, by "forward selling" to a supplier, is asking for trouble. What is to stop the customer(s) from dicking around paying you for the lithium, in order to force bankruptcy, and then allow them to exercise rights ver your business and the unmined billions in lithium?

In my opinion, PT is being too smart for his own capacities. Similar to Blumber and emini were being very smart boys in socialising customers shares and lending them out via ANZ, the end result of which is everyone except ANZ/ML are stuffed and lots of companies are stuffed.

So...this is hy I'm really worried about ADY. We have a stock broker-style set of jiggery pokery going on over a real world asset with real prospects. The thing is, if they were actually competent at being mining executives and not merely playing silly financial games, they'd be able to get REAL capital works improvements done in Chile ffor the iron, on time but not on budget I admit, and get REAL funding of a REAL naure over in Argentina. Instead we have this dodgy site in order to aoid a pretty imple equation: We have bucketloads of lithium, we can sell it cheaply and make a profit, give us a conventional debt funding facility in order to get it going.

Well, they are reaping their just desserts I reckon, and hopefully learning the lesson about to play out at ADY, via the microcosm of Opes Prime.