AMI certainly has good fundamentals but you may consider also...

AMI certainly has good fundamentals but you may consider also the following:

- They have 125m of debt.
- MC is low, but EV is more like 160m.
- Some of the debt will likely be converted into shares (-> dilution) and some of it will be repaid (-> reduction of cash flow)
- You don't know what exactly is in the contracts with Glencore (they talk about "usual" conditions, but the contracts themselves are not published, as far as I know). I have experienced that a single sentence or formula in a contract can screw a whole company or stakeholder group.
- The profit of the H2 16 was only 9m if you exclude the "gain from restructuring of debt" of about 10m.
- This wonderful "gain" will be rewound over the next 3 years or so: the debt is currently valued at 112.5m (net present value) but the face value is 125m. This gap will narrow when the debt nears maturity, resulting in a extra loss in the yearly profit of about 4m.
- If anything goes wrong (e.g. even lower metal prices, decreasing grades, mine collapse, problems with the plant, etc.) the problems with Glencore will be huge again.

You may also study the history of KBL, another junior base metal miner nearby, that has/had lot's of debt and got into trouble with its debtors. Interesting story!