Notice all the trolls quietly disappear from HC today, after...

Notice all the trolls quietly disappear from HC today, after they have taken your cheap shares?
Well, that's a lesson for those who have sold to learn. Learn to do your own risk-reward analysis and learn to use common sense. They dont stay up all nights, telling you to sell your shares, for nothing. They are not working for free. They are not angels.



Let's me put the final nail in the coffin for those downramp spinners if they ever open their mouth again about QM taking the BAU project for free blah blah blah (rubbish, uneducated, lack of basic knowledge of legal matters, and severe lack of common sense).



1. If Besra terminates the contract (breach the contract), obviously Besra must pay Quantum Metal the money back (in cash or in gold) at new reference price at the time of the notice of termination. (Just common sense).

What's important here is: that is if Besra is the party who initiates the termination.

No where in there that says if Quantum is the party that terminate the contract (breach of contract) get rewarded for such action by being paid back the deposit money at new reference price at the time of notice of termination.

My comment:
How stupid a legal document would be if Quantum is the party that breaches the contract and yet the legal document allows Quantum to be rewarded by being paid back the deposit money at higher reference price at the expenses of the other party which is Besra.

Common sense course of action would be: whatever Quantum has paid for contracted gold purchase quantity will stay with Besra until Besra is in a position to produce and deliver the gold to Quantum. That is why it is called "binding contract". It is binding. You cannot move in move out of a contract like there is f..king nothing that bind you. In commercial law, an agreement is often defined as a "legally binding contract". In fact, in certain circumstances, a promise can also be defined by the court as a binding contract. A representation by a person who is deemed to have certain authority within a company or organisation can be ruled by the court as a legally binding term of a contract. If an accountant or a sales agent promises or presents to you that induce you to enter into a purchase decision based on those promises or representation can be deemed by the court as legally valid and binding term of a contract. The company cannot turn around and dismiss its legal obligations by saying "no, that sales agent was not authorised by the company or that accountant was working outside his business hours or outside his representation of the company". It is a matter for the court to determine if it is or it is not a legally binding responsibility. That's why many major companies nowaday always do explicitly stipulate clearly their responsibility and the legal roles of their associated personels in many documents, representations,...

2. The facility which is the USD $300mil contract can only be terminated in 4 circumstances:

- After the contract has passed 24 months, or
- After Besra has received USD $240mil payment, or
- After someone and its associates has acquired at least 75.1% of Besra shares (CDIs), or
- Besra is insolvent for whatever reason.


My comment:
None of the parties is allowed to withdraw out of the Facility (the $300mil contract) before 24 months or before $240mil payment has occurred.

No where in there it mentions Quantum is allowed to withdraw out of the contract if Quantum is insolvent.


The bottom line here is:

- Quantum has signed binding contracts for 372580oz of gold purchases and the latest USD $9.8mil was one of those binding contracts. Therefore USD $9.8mil must be paid (it has been contracted and is legally binding).

- The deposit money stays with Besra. Quantum is not allowed to get it back. That money can only be paid back in gold deliveries when BAU project is in production.

- Even in the case of Quantum terminates the contract for whatever the reason including insolvency, after 24 months, the deposit still stays with Besra until gold deliveries.


My final notes: the deal is simply a briiliant deal for Quantum. If Quantum is going all the way with USD $300mil pre-payment, it stands to make a ginormous amount of money. The key in the deal is the difference between the Reference prices and the future spot prices in 5 years, 10 years, 15 years. And the 10% discount on the reference price. My rough calculation is Quantum stands to reap more than AUD $7bil in profit if gold price keep growing at average of 10% over the next 10 years as it did over the last 10 years.

For Besra, the biggest benefit is to be able to get BAU project into production without share dilution or minimal dilution.

The deal allows Besra to keep 20% of its gold production from 25koz to 120k oz and 35% of its gold production once it has passed its first 120k oz production. This means Besra can sell that gold production at spot market prices which are far far higher than reference prices minus 10% discount.

I have done many research and comparisons to other gold stocks and I love doing it and will keep doing it. My expectation is if Quantum is going with the full $300mil deal, BEZ will be at MC of $1bil (easy) to $2bil (harder) or sp of $2 to $4 if no share dilution.

Remember Besra can always bring more off-take customers to the table. Quantum itself can also choose to bring its own partner to the table to help co-fund its $300mil commitment.

Finally, don't underestimate Dato. He is a smart man.