My understanding is that MNE don't actually have any debt owing, its just tricky accounting. From my research into MNE's announcements relating to Comval the terms of the Cadan Loan to MNE's subsidiary in the Philippines (Philco MC) are such that the loan is NON-RECOURSE and Cadan has no right to demand repayment - repayment will only be triggered 12 months after commercial production. Also looking at the parent entity disclosures at Note 21 in the 2012 annual report, the parent entity being Mining Group does not have the liability on its balance sheet, thus this is only a liability at the Philippines subsidiary level.
Albeit a very Non-Current Liability on Consolidated Groups Balance Sheet there is no need for concern that this will soak up any of company’s cash. If the repayment clause was triggered (i.e Comval is in production) then there will obviously be plenty of cash to meet the repayment and also probably very large dividends back to Mining Group.
I personally would be very happy if this was the case!
Im also looking into this new El Roble asset and from my research the asset has been owned by a private individual in Chile for some years, more to come here, I am double checking facts, but if what I'm reading on this is correct, there is a lot to this asset and its more advanced. More to come once I clarify my research.
Good luck holders!
MNE Price at posting:
3.0¢ Sentiment: None Disclosure: Held
