Hi Everyone
As you know Lucky Phil and I went to see a QC last night together with his associate(very nice indeed), the meeting lasted 2 and 1/2 hours, was quite in depth and 25 floors up in the middle of the city(nice view)...
The two things that we concentrated on was
1.The selling of the mine and how we ended up in this situation and
2.Was there any misconduct or misleading information given by the directors
Its in most peoples opinion that the mine is being sold at way below market value, posters here have given valuations based on COP from mbn and mine life and come up with their own valuations of $500m with infrastructure and a ready made operational mine instantly available and ready to go...
When the company brought in the liquidators to sell the mine NI was heading toward lows and at this point they never had one offer after 15 companies had an interest,,,,,not one offer..
They tried to low ball offer to themselves as we know with an offer of $30m+ plus debt forgiveness which got knocked back by the other secured creditors...
Not one offer..
Then some time later after making the sale public world wide they had an offer to work with which was supposed to close in December but there is a Brazilian bank dragging things out...
Now from being put up for sale the NI price had been in a depressed state for a long time and even now with NI price moving upwards of 50% and LME stock declining at now rapid rates MOST other mines are not even breaking even and most are making a loss to which the point was made that it is totally a buyers market out there and NOT a sellers...
Why is this worth $500m???????
Because we want it to be, but in reality There are an awful lot of mines out there and the competition is fierce and this sale process being long and drawn out and the monies being talked about($230m)is reality to where the market is, NI also has had a bad track record with the mining boom now well and truly over, the NI eclipse never came and the EV is the next Talk in the town, but they can only sell what a buyer is willing to pay and we are where we are because no-one wants to pay more.....
The Qc said it is basically a failed DOCA, DOCA's which our QC has organised many times said that a doca life should be done normally over a 3-4yrs and bringing success back to the company, this is why the big boys invest in them to start with to bring back the company to the directors making money converting notes and interest when payable and so on, not for it to last less than 12 months>A complete failure.
The money being spent beforehand, IE tailing's dam, upgrades on the crusher plant equipment, well we all have our thoughts on this but it cannot be proven that anyone has done anything wrong..
Running out of money ultimately caused the suspension....
Suspension looking for money, Gud'' bank offered $30m and was on track until the secured creditors put a stop to it, they did this because there was a clause if they went into administration meant that Gud'bank would become the secured creditors and would of been the first to jump hop the secured creditors in any payouts and would be calling the shots..
$11m Brazilian tax credits, again to many restrictions and it also meant the mine had to restart(that possibly will be there for the new entity)
Now i could go on and on with all the things we actually know but at the end of the day the QC had this point to make on the sale,
No laws have been broken, even if it smells a little in the sale process there seems little can be done.
The secured creditors have made a decision they want shut of it after giving it a go and the timing of the decline in NI price just nailed the coffin shut, one mans offer of the value of the mine can be miles away to the actual value of the mine, but the mine is really only worth what somebody is WILLING to pay and they are securing this now and doing their job.
Whether we like it or not the offers are not there and if they are selling it to themselves through a new entity ect then this has to be proven and then can be looked again at,that doesn't seem to be the case so NO class action was advised for this pursuit.
The one opening that maybe open to us, is through the directors, he was interested in the time scales from when the operations updates which looked all good to then sudden suspension///then V/A
In his opinion the directors have to give all reasonable concerns that mbn is not going to meet near-term obligations and notify the market.
Now besides one ann that came with a 2 line under-caption "'mbn maybe in rocky waters"' this didnt come across as fair warning to investors.....
To pursue this is also difficult, directors cannot lie, fabricate, falsely misdirect or be fraudulent and so on, but they are allowed to make mistakes and misjudge without bad intentions..In other words you can make mistakes as long as there is no ill intent(we are all human)
QC wants to know/prove how the directors got it so wrong so quickly and then he will if confident take it to his funder s to see the percentage in his favour if went to trial'...
The funders have to be almost certain of victory and we will need to find around $10m worth of share registry, because their fees are around 30% and they require around a minimum of $3-$4m if successful
So we need in plain English proof that the directors were not forthcoming and didnt give investors enough time to act in their decisions to sell/hold or buy....
Selling the mine at whats offered now is reality, the creditors made the decision not to go into C+M and wanted to sell, thats the decision and cannot be reversed.....
Its been a long couple of months and behind the scenes a few posters have showed a willing to come out fighting and lucky Phil and myself have been humbled, its been a slog but you guys on here have given great support for at least us having a look to see if anything can be done....
It looks very slim if we can get enough info put together but if theres anyone out there that has worked for MBN and wants to come forward in confidence and help our QC he will be very obliging and confidentiality is assured
All the best guys and now unless something comes good from left field then we wait for the final sale price and finally some closure.
good luck to all
Matt
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