"they didn't commit $3 million under a prepayment arrangement...

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georgecostanza

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07/03/18

02:49

Post #: 31575319
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Originally posted by eshmun ↑

Let's try and clear this up. Anglo are not stupid, their lawyers are not stupid. they didn't commit $3 million under a prepayment arrangement under a "proposed MOU". They will have committed that money under a binding agreement. What is that agreement?

If Anglo after all their due diligence is walking away from funding exploration on Antena -Xupe then I can't see why its worth OGX progressing this prospect right now when they are just on the cusp of potentially becoming cash flow positive. If Anglo will still retain a 70% right to participate in Antena-Xupe after OGX has spent the money drilling, then OGX is just plain stupid.

It is very unclear to me what rights Anglo retain over Antena-Xupe because it has not been disclosed to the market in this announcement (that I can see) as to whether they are funding any of this work. The announcement refers to "OGX's 11 hole drill program" on their 100% owned Antena and Xupé Deposits. The reference to 100% ownership might be because that's what OGX retain until Anglo have met their obligations or it might mean that the Antena and Xupe Deposits have been excised from the earn-in agreement some how, if a binding agreement actually exists (as it must if a prepayment has been made). And what does that agreement currently state. Does Anglo become entitled to 70% of the Antena and Xupe deposits if they don't expend money on Antena/Xupe but do expend their remaining $6.5 million on other parts of the Faina project? How does this JV work in terms of the drilling proposed in this announcement on Antena and Xupé and other areas where Anglo may not want to participate and OGX wants to go it alone? JV Earn-in agreements normally have defined areas, defined rates of earn-in, defined dilution clauses and defined managers who conduct the exploration over the defined areas on behalf of the JV.

What's going on here? Let's make it up as we go along and just feed unclear announcements out to the market.Esh

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"they didn't commit $3 million under a prepayment arrangement under a "proposed MOU". They will have committed that money under a binding agreement. What is that agreement?"

Evidently, from todays announcement, they have - "The tenements form part of the proposed 70/30 MOU JV with AngloGold that is currently under discussion."

If there was sort of clause attached to septembers pre-payment it will probably be a re-fund of cash if the JV is not executed. Hardly worth throwing the baby out with the bathwater over.

OGX Price at posting: 12.0¢ Sentiment: Buy Disclosure: Held
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