Seven $7 million Glencore facility is the first road block, it's...

Seven $7 million Glencore facility is the first road block, it's been fully drawn and Glencore are probably wondering why NML have been struggling with repayments. It's up to Glencore now, as to if they'll extend out the repayment periods or not. Glencore may be assessing what they can get for almost nothing if they force the company into Administration, as opposed to extending repayment time frames. They are a business, so they'll just run the numbers and see what the formula's spit out.

The second road block is the extremely hefty environmental bonds from Evolution. Personally, I would never have purchased a project that had up to $35 million environmental bonds hanging over it - that's just crazy, because you'd need to be producing over 100,000 ozpa with low AISC to support something like that. Whoever analyzed and recommended the purchase of Mt Carlton to NML needs their heads read. And what were the NML directors doing at the time of acquisition, off on holiday in the Caribbean or something? It's quite staggering to think about.

The environmental bonds have to be amortized by June 2025, which is clearly impossible for NML, so the company will be asking Evolution to extend this out to at least 2028 I'd expect. Will Evolution agree to this? I'm not sure actually, simply because Evolution holds a security interest over Navarre Minerals QLD with regard to this bond. Evolution may simply refuse to extend the bond repayment time frames, and then when NML goes into administration, the Mt Carlton mine reverts back to Evolution ownership. Evolution can then sell it to someone else, someone more competent, but they may need to find some more fools crazy enough to take on $35 million in environmental bonds on a gold project only producing 20,000 ozpa - and I'm not sure there is anyone out there stupid enough to do that.

Why would anyone buy the Mt Carlton project when it has a $35 million environmental bond hanging over it, and it's only producing 20,000 ozpa - it wouldn't make sense.

I can't see both of these negotiations being successful, so I don't think this company will trade again.

Just be aware, that the 28th of June is a Wednesday, so if it goes into Administration, you will need to immediately contact the Administrators and request a letter of company administration dated prior to 30th June in order to claim a tax loss for the current financial year. Otherwise, you will have to wait until the end of the next financial year before it can be claimed. This is why the sooner the company declares a result on these negotiations the better.

These directors and managers have failed miserably, every step of the way.
It will be a sad end, but kind-of inevitable, given the project status and people involved.
The resignation of the technical director just prior to the trading halt was an admission of failure, and an attempted abrogation of responsibility or blame, in my opinion. This was very poor form.

Gw