HNC's interest is not at risk, they can & will continue, just a case of GT/Cornell have priority over shareholders and the more they delay the more it costs to get show back on the road and this will come out of back end of valuation where shareholders interests reside at moment.
If you like GT is trying to get some leverage against HNC at shareholders expense, he is a disgrace.
Any deal requires money up front, no word from GT about putting more funds in to rescue CMR's position instead using creditor vote against a work out DOCA proposed by HNC.
HNC can continue the project and call up money from CMR, we all know the well is empty so HNC will take CMR's interest in the JV via dilution in satisfaction of outstanding cash calls under JV agreement. Every stakeholder in CMR will lose out if this is allowed to happen.
You have to have a working knowledge of mining JVs to see this coming, don't expect average shareholders to be aware of this, that is why I have posted on this recently & yonks ago to put you guys in the picture.
At the risk of repetition, normally if an operator of a mining JV goes into admin the other party in JV takes over as operator, then project continues and new operator becomes liable for expenses going forward, under JV all parties are required to fund requests from operator for money to continue operations in proportion to their interest and if one party can't or refuses there is a dilution clause which sets out the formula to compensate the other party for non payment, so HNC puts in 100% and CMR's interest is diluted, if HNC refuse to fund CMR will have to go into liquidation and HNC has first right on sale and probably will pick it up a lower cost than dilution, so you see HNC DOCA is a fair work out just GT trying to get some folding out of China up front, he is not in a strong position as HNC hold all the aces as they have the cheque book. Trust this clarifies.
CMR Price at posting:
15.0¢ Sentiment: None Disclosure: Not Held
