RRS half yearly, page-12

Interesting thoughts from Billfish on another forum. Read the second half of his post about CTR.

I see this guy Chen is about as subtle as a brick when it comes to presenting the financial position of Range. He seems to be totally oblivious to the fact that when you are part of a consortium then the actions of your partners can affect the perception of your company just as much as you can yourself.
I am talking about the somewhat schizophrenic handling of Puntland.
In the last full year accounts there are 3 contingent liabilities, relating to Puntland,totaling some $20.4m payable on the completion of the fourth drill.
In the latest half year results, whilst the contingent liabilities have been boosted by liabilities we were unaware of up to now, the contingent liabilities relating to Puntland are no longer included. That would seem to imply that we no longer intend to progress the Puntland license.
In our accounts we now have everything apart from T&T down as non-core assets held to realise value.
In comparison, Horn, the operator of the license has been renamed, recapitalised, management replaced and finally relocated to Cape Town.
That is an awful lot to "Re's" none of which include "realise". By relocating the operating office over 3000 miles away, where it is actually closer to the South Pole than it is to Puntland , I think the Lundins are making a pretty definitive statement about what they expect for the future of Puntland.
Red Emperor have gone further, in their half year accounts issued today, and written off the $15m they have spent on Puntland exploration to date.
If the intention behind the suspension of RRL shares was to get all the bad news out of the way with the share quote being reinstated into an uptrend of good news - this seems to have been overlooked here as we will have the Puntland exploration cost writeoff still to come.
I would have thought that a senior executive that knew what he was doing would have "kitchen sinked " this and got it out of the way before reinstating the share quote.
There may be even more bad news to come as the auditors have seen fit to qualify the accounts as they can find no supporting evidence that Georgia has any value at all.
I tend to agree with that position as apart from FRR no one seems to be keen to get involved in Georgia. Straight sold off one of their other licenses last year to Tethys and their new management has put that development on hold, looking for a partner. The queue to get out of Georgia seems to be longer than the queue to get in.
The other issue that seems to be being brushed under the carpet is the impending restructuring of CTR. This seems to now be on the critical path for the completion of the divestment of the Texas Licenses.
One of the things that RSR got right was to increase the distance between the Range shareholders and Peter Landau. I think he got our holding on CTR down to round about 3%
Chen has done the exact opposite by raising our holding in that particular vehicle to 13%.
The choreography for this particular action is interesting to observe.
Despite the fact that the Texas deal has yet to complete Range were given the 200m CTR shares on Feb 4rth and announced as a significant shareholder.
6 days later on Feb 10th it was announced that one of PL's long term supporters had sold 124.5 million shares in CTR and ceased to be a significant shareholder.
March 5th CTR request trading halt
March 10th CTR shares suspended from ASX
With the following statement from the company.
"1. The suspension is requested pending an announcement by the Company regarding a transaction involving its Guatemalan interests, formal completion of the Texas asset acquisition, new financing arrangements and a corporate restructure;
2. The company believes that the suspension will end 31 March 2015 following the release of an announcement concerning the details mentioned above"
It is hard to escape the impression that the Texas deal was concocted, from the CTR perspective, to ensnare RRL as the source of funds from which this CTR restructuring is to emerge.
If the Texas deal is dependent on the CTR restructuring why did RRL feel the need to become a significant shareholder almost two months before the deal could be completed and thus become a major party involved in the CTR restructure rather than wait until the restructure was completed when an accurate value could be placed on a CTR share.
We have been informed that the CTR shares were added to the deal at Chen's request so he must feel confident in his ability to dance with the devil, we shall see.
It is somewhat ominous though that just as we were walking in the front door, one of Landau's most vociferous supporters was slipping out the side door, one month to the day before CTR shares were suspended.
We should remember to raise a glass next week to the second anniversary of the suspension of trading of IOP - surely heading for a world record here.
All the conditions for a reinstatement of the shares were met on the 4rth of December last year when all the outstanding accounts were published, but still no sign of of IOP share trading restarting on NSX..
The beast flickered briefly into life and fired its CEO backdated to October last year.
I must admit this is a new move for me. I have seen promotions backdated, I have seen pay rises backdated but I have never seen a sacking backdated.
Vasile does nothing by chance so it will be interesting to see how this pans out, but is it entirely coincidental that after a long period of slumber IOP kicks into life just as RRL is about to become cash rich.