Speculation on the current state of play, and the reason for the delay in receiving finance.
MSR could've signed towards the end of August but Stephen chose not to, he didn't want to sell shareholder short. Stephen back then, couldn't find a provider of debt only, but rather only entities that wanted a JV with MSR. The speculation was a new 30% of the project cornerstone investor with options (Chinese) for approx. USD$30M to USD$35M (speculation). It is actually a massive compliment to MSR, that Stephen couldn't find any party didn't want to take a stake in the project, after Stephen's initial presentation (as opposed to debt only). Please remember that it's the metrics of this project that have gotten us so excited. The Chinese see it the same as us.
Anyway, like any deal between parties things always start off amicably, it's always at the end of negotiations when negotiating parties play hard ball. Kinzu mentioned that Stephen had a deal all but stitched up with a Russian entity a while back. If that is true, that Manas was on the verge of signing a finance deal 12 months ago -- only to be dropped at the last moment, it would have left a bitter taste in management's month. Because, Stephen was/ is well aware that he needs a deal signed, it's his number one priority, closely second are these damn slipping time lines. That deal that fell over, costs MSR dearly with wasted months, and damaged reputations. Just as importantly, it gave the team invaluable knowledge about how not to be burnt again. Management, WON'T be going into these current negotiations blinkered, if anything, they are becoming too battle hardened.
MSR is at the negotiating stage when our cornerstone investor is playing hard ball. After all, business is business, I don't blame our potential new cornerstone investor for playing hardball, I'd have less respect for the new potential investor if they didn't. This entity (Chinese) is trying to place MSR into a financially weak/er place which they deem to be MSR's present Achilles heel. That recent CR was all to do with that. Stephen has tried to play it as cool as possible. There's incredible pressure on this guy at the moment. He's got long term holders who have brought well about 20 cents crying on his shoulder. He has option holders, firmly telling him to get a deal done, because they see the slipping timelines regarding the start of production (now mid 2015) and are worried that the price will be below 8 cents come the end of the March 2015 and he also sees the cash reserves slowly dwindle away. (hence the cost cutting measures)
The Chinese know this. That was the main reason for the last CR.
Basically it goes like this.
The Chinese said, please sign this inferior deal (end of August) because you'll soon run out of money. Stephen replies, "You know your right -- however Manas will just have a small CR to some investors to continue us on, we can do this forever if you like. Now back to that finance deal for Manas shareholders. And by the way, we have other interested parties you know."
Management CANNOT do anymore than what they are currently doing. No one is lending money at the moment. If Stephen can pull this deal off, it will not only be a credit to the negotiating team, but also shows to us shareholders how good this project actually is.
I am curious about what MSR plans to possibly sell off as non-core investments.
The most important thing for us to do now is to back our management team. Without being naïve they are doing the best they can in very hard circumstances. But there's something just as important other than finance that hasn't been mentioned here on HC.
The best operators look beyond financing. That is, you want your CEO not to have a consecutive approach on different aspects, but to have a concurrent approach. This issue has been the thing that has impressed me the most when reading that quarterly, not the potential upcoming financing deal. If management act on things consecutively, MSR won't be mining until 2016. But management have all things beyond finance as far advanced as possible. So as soon as the investment money comes in, management can light the wick, and we will see things happen quite quickly because of the present initiatives shown by management on future factors.
Stephen is doing a stellar job. The whole team are doing the best they can.
We are potentially sooooo close in realising the true potential of this project.
And please also remember, what will Manas find in the untested areas?
What is the true mine life?
If Manas returns 40% back to investors, could we be looking at a dividend of 1 to 2 cents, each year, for the next ?????? years?
The above is all speculation on my behalf.
Hang in there Puss and Gidday Jeff
MSR Price at posting:
2.4¢ Sentiment: Buy Disclosure: Held
(20min delay)