Hi @mike999, your comments are interesting and given none of us are privy to the terms of the JV agreement then it is difficult to quantify the % splits for non contributions. One thing is for certain however is that there would be no free carry so i would suspect your estimates are probably wide of the mark and given there may also be penalty clauses for non payment or more importantly inability to pay/breach of covenants then the dilution will probably be significantly greater than just a few % points.
With continued drilling (Follow up drilling is planned for the new year within this area) and increased JV cost recovery pools the NME board would be sweating on a significant MRE so NME's diluted JV % is offset by an increase in overall JV value. Unfortunately if this is the case then all NME SHs will not get to share in any accretive value arising from the MRE.
In addition a cursory glance at NME's directors report, financial statements and audit opinion provides categoric evidence of the dire financial position (mess) of the company which has now fritted away prior CRs and is only able to survive on the goodwill of the directors and related parties (Mr K Allen) to defer payment of their remuneration and services respectively. To expect SHs or financiers to tip in further funds when the company is teetering on the edge of financial armageddon and mired in related party transactions is rather fanciful. I have experienced companies in similar financial situations and unless a white knight was to appear out of NME's darkness then the longer the delay in accepting MCT's TO the deeper the hole they dig and the more likely the loss to SHs increases.
Furthermore given NME has no cashflow (refer NME's financial statements) other than job keeper income, negative working capital, negative SH equity, SH equity/value continues to decline. The auditors even raised as a key audit matter the carrying value of NME's most significant asset, exploration and evaluation expenditure (Note 8 of the financial report).
In conclusion its interesting that you remain so confident on NME's value (yet a total deficit of ~$2 million), ability to raise additional funds and strength of its position in holding out for a higher TO offer from MCT...I find your position rather delusional but interested in your further comments. Cheers. Jj
MCT Price at posting:
0.9¢ Sentiment: Hold Disclosure: Held
(20min delay)