Seals hi."His [Frank Reid's] Iran savvy achieved nothing for us...

Seals hi.
"His [Frank Reid's] Iran savvy achieved nothing for us on Mehdiabad"

I think it did because achieving nothing was better than giving up the rights we already had in the original profit sharing agreement in favour of this “value diminishing”, "time limited" production agreement that appears to siphon off hundreds of millions of dollars of potential profit from the enterprise to some unknown organisation (probably regime officials). Jordinson won't talk about it (and he doesn't have to publish because he chose the accounting policy to write off Mehdiabad so any diminutions in value as a result of HIS negotiating “skills” don't have to be reported: he effectively blamed it all on Dr. Reid by writing off Mehdiabad the minute he took over as MD), so of course we don't know which regime officials will get these redirected profits.

The only thing this production agreement does is confirm to Cerhob that there maybe weren't performance issues on our part and that the directors weren't lying when they talked about a "purported cancellation". I think I argued that the time needed to complete a feasibility study must increase if you find the ore body is larger than you first thought, an argument which makes a nonsense of Harati Nik's cancellation reason of “late delivery of the BFS” (he was duty bound to extend the dead line as the ore body increased in size): the real reason he cancelled the agreements was the economic rent on the mine had risen to unacceptably high levels (due to soaring zinc prices) and the leadership wanted a bigger share of the profits than the agreement entitled them to. Hence the six year delay in the hope we would walk away and forget our $18m expenditure to complete the BFS, a delay which may have been exacerbated also by internal disagreements among the leadership on which Iranian individuals, in the various power centres, to direct the economic rent to. (Dr Reid talked of there being “no process” and of everything (including lines of command) being “opaque”, IIRC). We've never had a single valuable insight from Mr Jordinson into Iran except that it is a “difficult country” and “he can't talk about it” (but presumably he can to the main shareholders and apparently he can selectively dilute us out of Mehdiabad and still retain control of it for himself).

Iran is joint 133rd out of 174 countries in the table of least corrupt countries. It has dropped 13 places in the 2012 study.

(source) http://www.guardian.co.uk/news/datablog/2012/dec/05/corruption-index-2012-transparency-international

Instead of reading non Middle East news, Mr Jordinson should be reading the reports on the outcomes of arbitration cases brought against the governments of corrupt countries. An understanding of the scams they use to rip off investors is essential before negotiating. His reports have never displayed any of that mastery. Nor do they demonstrate any mastery of the politics of the Middle East. Typical scams are
1. using permitting delays to suck in forex off overseas companies' balance sheets into cash drain exploration projects: a double scam because you get the official exchange rate while someone else in the forex feed chain leading to the top of the regime pockets the difference between the black market and official rates, and also you lose if you don’t find an economic mine but the leadership benefits in getting exploration work done that is needed to grow the economy regardless of the exploration outcome. A good scam strategy is to make other investors lose their money on exploration and to confiscate any exploration successes.
2. creaming off the returns to exploration success. Extreme cases (Marakand Minerals and its Khandiza project in Uzbekistan: it proved up about $4bn worth of zinc) involve outright confiscation with no compensation whatsoever (currently subject of arbitral proceedings). Jordinson appears to have acquiesced in us being ripped off with this production agreement (is he too ashamed to publish it?)
3. using thugs to come round and shake up a few employees (Uzdonrobita Uzbekistan)
4. using bogus bankruptcy procedures to bankrupt financially sound companies (Newmont Mining, Oxus Gold, Metal-Tech: all 3 companies had Uzbek subsidiaries bankrupted) to transfer a valuable business to regime officials for near zero value)
5. using bogus reasons to remove licences to transfer massive equity value from one enterprise to another where a key regime offical stands to benefit (Uzdonrobita mobile telephone company had a licence cancelled leaving thousands of pre pay customers with no service and no choice but to transfer to a rival company (one owned by Teliasonera) that had paid a $320m bribe for licences to Gulnara Karimova).
6. Using the grant of tax privileges in perpetuity to suck in forex for unattractive cash burn projects at the bottom of the commodity price cycle only to renege on them the moment the project becomes viable (Oxus's Amantaytau project when gold prices were around $250 an ounce)
7. Using permitting as a means to deprive a business of revenue (either to suck in more forex investment to make a turn on that) or as a means to stop a business from functioning so that it is more amenable to bogus bankruptcy procedures (Oxus Gold: denial of export permit to allow conversion of its gold dore mountain into finished product and denial of permits to build such a plant to do the same job in situ: instead it was made to wait 10 months for the State producer to refine the backlog).
8. Use of dilution scams to divert shareholder value to a key regime official. (Oxus Gold: 20% stake in company issued to Zeromax (Gulnara Karimova's company even though journalists who report that have been threatened and there are no public documents to corroborate her ownership) at a price influenced by a bogus bankruptcy threatening penalty for alleged forex breaches only for the penalty to be cancelled after the shares were issued). There is no independent judiciary in Uzbekistan: it does what the leadership wants.
9. Use of hostage taking to blunt legal action or to reduce the amount of an arbitral claim (Imprisonment of Sayeed Ashurof, Oxus Gold's chief metallurgist, on bogus spying charges for 12 years) Iran is a dab hand at hostage taking too.

Frank Reid's observations (in his first presentation within weeks of starting the job) made it clear he knew what he was doing when dealing with Iran. That has never been the case with Mr Jordinson. The previous agreement plus regime change is worth a great deal more than what Mr Jordinson has negotiated with no regime change. This year is the year when there will have to be massive change in Iran, and giving up all the benefits of the old agreement was about the most stupid thing he could have done. He needs to go in the Guinness Book of Records for the most incompetent director on the planet for that. All he had to do was do nothing like Frank Reid did, or if he took the view that regime change is never going to happen, start legal proceedings. All IMO. DYOR. Just my view.