There are some good meeting reports above, but in order on completeness below are my thoughts on the meeting today.
It was nice to catch-up with some fellow HC members today..
TNG AGM 2019
NOTABLEATTENDEES:
TNG Board PaulBurton (PB), John Elkington (JE), John Davidson, Jason Giltay (JG) & PaulaRuffo (PR).
Ex Board : RexTurkington
TNG Staff: JasonGiltay (JG) Dan Foo, Paul Kreppold, & Simon Moreton
ComputerShare Staff, KPMG (Auditors)
NOTABLE ABSENCES:Shareholders (only about 12 present), Will Dix (TRR MD, has been at previous AGM’s),Stu Crow, Major shareholders – ie. Vimson, SMS or Brown family
Before the meeting the Board and TNG staff were at the meeting early and greeted attendees.There was plenty of opportunity for 1 on 1 with PB and directors before the meeting.
JE openedthe meeting with Directors and JG seated up front.
JE gave briefpresentation briefly touching on a NAIF application that had been made, Land acquisitionat Darwin Port offer, etc
JE startedgoing through Resolutions and mentioned that 347 Proxy Votes were cast (Not alot in my book given the low meeting turnout).
JE wentthrough Resolutions, at Resolution 6 a shareholder (I won’t name but I believeto be a top 20 shareholder) had a question regarding the outstanding loanamount for PB’s shares.The number of shares was not in dispute, but the issue price was ie $0.089 vs $$0.139 or $356K vs $566K.The question was asked very respectfully and was thankfully and openly received by JE
This iswhere the meeting went off track.There was not a quick answer to the question.
JG clarifiedthe question with the question asker then sat at his Laptop looking for an answer.There was interaction with PR, other directors, Computershare and auditors. PB largely sat out of deliberations.No one had an answer.
We carriedon with the balance of the resolutions with it agreed (JE with presentShareholders) that we would vote via a show of hands on resolution 6 after the issuewas clarified allowing us to carry on with meeting.
After goingthrough the resolutions, the issue was still not clarified and an intermissionwas sought.
At thispoint I availed myself of the refreshments on offer, the coffee was a qualitydrip filtered brew that kept me awake for the duration and the biscuits
were ashort bread / meting moment type offering that accompanied my coffee well
Theintermission ended with a private group discussion between Directors andofficials.JE again thanked the shareholder for the question and reiterated that the loan amount needed to be resolved and committed to this.There was not an answer for this on the spot.JE also stated that the loan amount will be as per the 2014 Employee Share Plan.As the resolution was primarily regarding the loan period (the amount was already set in 2014 ESP), that the vote via show of hands would occur.The resolution was passed 9 – 2.
I’m suethis issue will cause some discussion, but to me I was really impressed by theway that JE handled it.I really believe that he is 100% focussed on getting the details right.In hindsight and I mean absolutely no disrespect to the questioner who asked the question respectfully, but it would have been beneficial for the question to be asked to the company before the meeting so that an answer could have been brought to the meeting.
Theremuneration report was passed with only 12.49% voting against, avoiding asecond strike.
At thispoint JE stated his disappointment in the 10% placement special resolution notbeing passed.He conceded that SH’s may not like shares being issued at prices below their own valuations.It was stressed that it was a big job to promote the company, but we are now well resourced to free PB up to do more of this. It was stated that during Melbourne Cup week PB did a broker roadshow, which resulted in the SP rising 15% during the week.
At thispoint JE handed over to PB for a presentation (1215hrs)
Thepresentation started with a promotional video of TNG, it looked new andpolished, I’m sure we will all see it soon.
FINANCE:
It wasmentioned that KFW were in Melbourne and Sydney last week discussing ourproject and others.PB was still very optimistic and confident on finance.When pressed on likely KFW provision 60-65% was mentioned.There was a comment about an Australian Big 4 recently being in the office also.
NAIF – Whenquestioned about details of the NAIF snippet that JE dropped re. NAIFapplication the answer was a surprise.I asked if they were still targeting $70-80M for infrastructure and PB advised that the NAIF rules had changed to allow money to support projects directly (rather than just common infrastructure) and that the application was now for ‘Significantly more’ than the $70M -$80M. NAIF looks like it could be a serious part of the finance mix now.Apparently, the project has ticked all NAIF boxes and works well for the project due to longer NAIF loan terms than KfW finance.
PB wasquestioned on debt equity ratio and it sounds like 70/30 is still the target.
Equity:
There waslots of interaction re Equity, it sounds like there are a number of optionsincluding:
-MezzanineFinance - Asia
-Newpartners local and international
-DKSK– investment Arm
-Vimson
-StrategicPartners – discussions live for 10-20%
-KoreanPartner (Kfw connection)
Equity tobe raised at Project level.
FEED PROGRESS:
Feedprogressing well, will be ready before FID June 2020 (hopefully sooner).All indications are that the $824M costs will not be exceeded.
DARWINSITE:
PB advisedthat they had submitted a proposal to the NT Govt to acquire the Darwin Portsite freehold at $0 cost.From memory this was what was already agreed with the prior govt but the deal changed with the new Labour govt.This would be a GREAT outcome.
The NT Govthas also announced that the land neighboring our proposed site has beenre-zoned to a gas precinct (not 100% sure on the term).This means that refinery suppliers such as Coogee Chemical can build facilities near by (ie. Acid), this will reduce capex charges and simplify supply chains.
TIVAN:
New patentregistered to encompass whole process rather than parts.Some discussion about this, possibility that this may extend Patent life.Patient applications in China and South Africa outstanding.
BDOcommissioned to value patents, there is a possibility that this will lead to separateentity to own TIVAN process, possibly Singapore based.I suspect that this is where SMS is most interested in investing.
TIVANrevenue models that the company is proposing are a licencing fee + royaltystream.
BBI arestill interested, but I believe that the project is up for sale.
There havebeen other parties interested in TIVAN, but local and overseas.
JE SKIN INGAME:
JE was verytactfully asked if he had any shares and if not, why not?JE’s reply was that when he was sounded out as an Independent Chair he believed that what was requested was a Chair that only represented the Shareholders. He followed up that he was not precluded from buying shares and as such may reconsider his decision, but that decision was entirely his. JE also received some encouragement from SH’s to join the register. If I was a betting man (which I am), from what I observed at the meeting I would say that there is a better than odds on chance of JE joining the register in the near future.
Mt. PEAKE:
PB mentionedthat we will need to pay a large security bond to the NT Govt to cover rehabilitationcosts in case of insolvency.PB was quizzed on potential out lay and said this will be determined by the NT EPA but cited other recent projects has bonds ranging from $100M - $200M.
CONCLUSION:
On thewhole it was a very positive meeting and I get the feeling that we really are soclose to a FID.There was no mention of ‘Pointy End’ thankfully but there don’t appear to be too many more hurdles to fall over. JE appears an excellent hire, he appears very genuine with the upmost integrity.He appears to be very well versed on company operations, incredibly well so for the limited time that he has been in the role.He mentioned a prior strong relationship with our responsible director at SMS which is a bonus.
, although I am realistically out of bullets.
(20min delay)