Unfortunately I wasn't able to attend and I’ve only just heard second hand some high-level details from close associate.
Chairman and a few loyal shareholders were quite fired up apparently in defence of the Board’s actions in the face of significant and enduring challengers. Including highlighting the fact they went from $80M in debt to $30m in the red within 9 months of being informed of the mine closure. During the temporary closure in 2015 they prudently took the opportunity to increase the PRI policy coverage from US$30M to US$200M. They are intent on prosecuting this claim with Zurich for the full US$200M. Meeting already taking place with formal mediation happening in March 2018, following which the case will be heard in June/July.
The Chairman confirmed the arbitration was tactically required to progress the PRI claim. Short term they may have some type of procedural win that should progress the claim significantly.
MTR Board were present and their CEO asked a series of questions from the gallery that the Chairman responded to with vigour.
It would likely be 1 year of production before Chatree would be cash flow positive again, so it would need to find a cash buffer and various options are currently on the table.
Every quarter a team of 20-30 people from the Thai DPI (department of mining and environment) were descending on Chatree to inspect the mine. There has never been a single environmental issue every reported and the DPI know this.
Some colourful detail around a few corrupt locals being removed from company’s payroll for embezzlement, including the landowner who has created all the media noise as she wanted to be pay millions for her land as a bride to go away.
Chilean presentation was most exciting aspect and the new gold discovery Cerro Blanco West is likely to see some interesting drill results over the next couple of weeks. Alistair Waddell (geo) appears reserved but extremely confident in finding multi-million additional au oz given current understanding of their footprint. The Chairman reiterated the interest he is constantly receiving from a double digit number of parties to get involved in perhaps South America's best brown field project.
My overall take - limited long term downside even if MTR loss their spill motion and sell out as the portfolio of assets as worth multiples of what the market is current valuing them at. If you can cope with short term volatility you may be on to a big winner.
KCN Price at posting:
44.0¢ Sentiment: Buy Disclosure: Held
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(20min delay)