Rehabilitation would be part of the settlement, would it not?
Surely they can't be in good faith discussions / negotiations for all this time and reach a settlement agreement to go back to the office and have a light bulb moment --
Combined they just paid US$60 million to settle the disputes in regards to the Morila mine and the Goulamina project, following previous correspondence (FFX announcements) made reference to what the dispute / issues to Morila Gold Mine were;
~ Morila SA's financial liabilities
~ Environmental impact at the Morila Gold Mine
~ Tailing deposited in the mine by the previous owner
~ Community Projects
Liabilities / Not Liabilities, Parent Guarantees / No Parent Guarantees, Debt / No Debt what we know from information provided in announcements.
Some of the known Debt as indicated in the Recapitalisation Package.
ME-IM - a combination of outstanding debt owed by, and future liabilities of, Morila SA of US$23.4 million (September 2022 Recapitalisation Package)
~ future liabilities = fixed costs calculated from the ME-IM / Morila SA Mining Service agreement, up to 30 June 2023 (approx 9 months forward payments)
Given that;
+ It appears ME-IM continued to provide mining services at Morila until they de-mobbed from the site in January post the plant being put on care and maintenance, and;
+ They haven't made a claim (as yet?) against Morila SA and/or Firefinch Limited for outstanding debts, and;
+ Werner Messdat's claim (social media) that the plant continued to operate without the assistance of Firefinch Limited, and proceeds from the sales of Gold (post Firefinch cessation of funding) were utilised to pay down creditor debt.
** considering the above, & IMO ME-IM were being paid for services and all or some debt was paid or was being paid down?
Aged Creditors
~ Provisions of A$15 million to pay aged creditors that were obviously not interested in a debt to equity agreement.
~ Were these creditors pre Firefinch Limited taking ownership and carried forward?
Debt to Equity - other creditors
Total of US$4.9 million (A$7.35 million) agreement with several creditors of Morila SA.
Tell me lies, tell me lies ... ... ... ... ...
21st September 2020 - Notice of General Meeting & Acquisition Funding of Morila Gold Mine
Explanatory Memorandum:
1 - Transaction Overview
1.3 - Debt to Equity Conversion
On 3 September 2020, the Company entered into an agreement with Capital Drilling pursuant to which Capital Drilling was given the right to convert part or all of the Capital Drilling Debt to equity in the Company at the same price as Tranche 1 issue price (Equity Conversion and Drilling Deed)
Pursuant to its right, Capital Drilling elected to convert all of the Capital Drilling Debt of approximately A$1.25 million to equity in the Company. This has resulted in;
(a) the Company issuing 1,562,500 Shares to Capital Drilling at the same time as the completion of Tranche 1; and
(b) the agreement to issue a further 6,251,095 Shares subject to Shareholders passing Resolution 4.
In addition to the conversion of the debt to equity, the Company has agreed to grant Capital Drilling the right to bid for all drilling work which any of the Company's Malian subsidiaries (including Morila SA once completion of the Morila Transaction has occurred) may wish to undertake in Mali for the period ending 30 June 2023. Capital Drilling will be awarded the contract to undertake the drilling where Capital Drilling's quote is competitive with the quotes of other parties. The Company has agreed to guarantee the payment for work which Capital Drilling may undertake for the Company's Malian subsidiaries.
++ Not only did the Company guarantee payment, prepayments were being made for drilling services, unless I have interpreted or read the annual report incorrectly (appreciate any corrections)
The drilling contract which is to be entered into between Capital Drilling and the Company's Malian subsidiaries is in form consistent with industry practice.
All announcements made by Firefinch Limited in relation to "Parent Entity, Subsidiary Liabilities &/or Parent Guarantee as well as verbal affirmation of their being no parent guarantees."
Contingent liabilities of the parent entity:
There are no guarantees entered into by Firefinch Limited for the debts of its subsidiaries as at
~ 31 December 2020 - page 57, 31 December 2021 - page 93
31 December 2022 - page 68; BUT wording changed in the Annual Report for period ending 31 December 2022 to:
Contingent liabilities of the parent entity, see note 33 - page 74
33: Contingencies
Legal Contingencies
The directors have considered the possibility that Morila SA or its creditors might take legal action to attempt to compel the Company to meet Morila SA's liability. It is the position of the Directors that Firefinch Limited is not a signatory to any of the operating agreements of Morila SA and there exists no formal funding agreement or Deed of Guarantee between Firefinch Limited as a majority shareholder, and Morila SA, that would require Firefinch Limited to either continue to fund Morila SA, nor meet its debts. As at the date of this report, no legal action has been taken against Firefinch Limited.
** As above, there was a Drilling Deed that guaranteed payment entered into!
The group believes it is highly improbable that a court will place such a liability on Firefinch Limited. On this basis no provisions have been recorded in respect of these matters.
Director's Declaration Annual Report for period ending 31 December 2020;
In the Directors' opinion:
(a) the financial statements and notes set out on pages 27 to 68 (for 2020) pages 61 to 102 (for 2021) pages 31 - 75 (for 2022) are in accordance with the Corporations Act 2001, including;
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirement; and
(ii) giving a true and fair view of the consolidated entity's financial position as at 31 December 2020 and of its performance for the financial year ended on that date.
~ Director's Declaration was made in accordance with a resolution of the Board of Directors and signed for and behalf of the Directors by
Cowden - 2020, Anderson 2021 & Fraser 2022.
Given that although the Company notified Morila SA of their decision to cease funding (3rd November 2022) they entered into an agreement (3 September 2020) to guarantee payment with Capital Drilling ("Equity Conversion and Drilling Deed") for any work undertaken for the Company's Malian subsidiaries, from 3 September 2020 to 30 June 2023.
** Unless the Drilling deed was cancelled on informing Morila SA then technically they still had an agreement in place, also bear in mind that it wasn't until 4 July 2022 that the Company initiated immediate plans to put on hold exploration drilling (among other things).
** Given that the Capital Drilling agreement entered into on the 3 September 2020 didn't expire until the 30 June 2023, (even if we shortened the deed expiry to actual date of ceasing funding) how can / could the Company make statements or declarations that there was no guarantee for debts incurred by is subsidiaries, considering the Capital Drilling deed for services provided to any of the Company's Malian subsidiaries?
EGFT Claim
Is quite baffling but given the lack of information coming from Perth, I will make an opinion based on my calculations only.
The Arbitration notice is in connection with Morila SA's purported failure to pay amounts under certain outstanding invoicing to EGFT further to a mining service contract between EGFT and Morila SA dated 2021 (Mining Services Contract). EGFT claims an amount of no less that A$31,853,888.
** Of note: Firefinch's cash balance at the end of the March 2024 quarter was A$33,265,000!
EGFT partnership at Morila SA commenced on day 1 of Firefinch's ownership 15 November 2020, their engagement was a natural progression of retaining experienced contractors that were already engaged at the mine under Barrick (previously Randgold) and it made logical sense to retain them.
EGFT were recognised for their successful performance at the site in April 2022 for a total of 18 months mining / hauling / satellite pit preparations, access road clearance to N'tiola satellite pit with a new 12 month contract.
For the previous work (November 2020 - April 2022) the contract value was US$22 million (A$28.6 million) so how can there be a claim for parts of year 2021 that is more than the total value of the contract for the period "as above"?
** Using an average figure of US$1,222,000 per month for a further 7 months of contracted work (ceasing 3 November 2022) equates to US$1,222,000/month x 7/months x FX 1.35 = A$11,547,900 totalling A$40,147,900, for the period November 2020 - November 2022.
Given the claim of XAF 12,838,591,019 and the dates being non specific with just 2021, the AUDXAF hardly fluctuated for the year and averaged 415, converted to AUD = A$31,086,176 = A$2,590,514 / month.
My calculations .. ..
cheers
