Ann: Finalisation of New Michelin Joint Venture Agreement, page-2

I still can't get my head around how previous management screwed this aspect of PDN's activities up.

Many years ago (when the uranium price was higher than recent times) EDF pre-paid PDN for future deliveries of uranium. There was a floor and ceiling price for the deliveries of uranium (which were never fully disclosed) but PDN clearly stated several times that the floor price of these deliveries was "significantly" higher than the prevailing uranium price of mid 20s before things fell apart for PDN.

So, basically the contract to deliver to EDF was favourable to PDN. Clearly EDF wanted to get out (because they could simply buy uranium on the market for cheaper than what was agreed in the contract) so they wriggled until they could breach whatever agreement was made with PDN to do so. They demanded a refund of their pre-payment which PDN obviously couldn't honour and PDN was then in default.

The question is: why was this contract so poorly written that it turned what should've become an ASSET for PDN into a liability? Why were PDN management so unprofessional that they allowed this contract to be broken by EDF so easily? Hypothetically speaking, if PDN transferred this contract to another uranium miner they would've been paid very well for it.

Now we've got EDF with 50% of the Michelin project but what other aspects of their original agreement remain? Is PDN still obligated to deliver uranium to them in the future? Or was EDF's prepayment to PDN extinguished in return for a 50% stake in Michelin and no delivery obligation remains?