I was at the recent SDL Meeting and thought I'd give you guys a bit of a run down.
Firstly as announced the SPP was successful, so the only motion that required moving for the whole meeting was re Ken Talbot picking up his $5 million worth. Was this all a ploy for KT to increase his shareholding legally? Good question, I'm glad you asked. If so why would somebody kick in $5 million dollars into a 2 bit company with no hope of financing? Once again, I'm glad you asked.
Not to many people there, about 60 or so (just a guess).
After the chairmans address the whole meeting only took 5 minutes before it was closed. Then came the interesting bits, question time:
For those of you who know me you'll know that I'm likely to ask the questions that the board don't like to answer.
My first question was basically pipeline Vs railway. I was surprised that in a recent article in the AFR that GJ was still courting the idea of a slurry pipeline, espescially considering the proximity of Mbalam t Auora Resources and the many other surrounding tennements.
Basically GJ said that the advantage of a pipeline was a considerably reduced CAPEX and OPEX, when compared to a rail line. His theory was that SDL could start with a pipe to get cash flow up and running and then once the balance sheet looked a bit stronger move to a rail line. Of course the downside to this is that steel mills like their DSO dry, so rail is the preferred method for freighting DSO. Nothing concrete, but I just got the feeling that maybe the railway was being held back as a bit of a bargaining chip, as obviously the Government would much rather a railway was put through the jungle than a single user slurry pipeline.
So after luring GJ into a false sense of security I slapped him between the eyes with the big nasty one.
"Obviously as a shareholder of SDL I am anticipating a further dilution of my shareholding in order to bring the project to fruition. What level of dilution do you and the board consider acceptable?"
I'm not sure but I thought I saw GJ go weak at the knees:
Now I have to say that GJ handled the question with the aplomb of a John Howard, Wayne Swann or a Bromwyn Bishop.
He started off by dancing to the left, " When considering the dilution the board has the option of selling off rights to Mbalam only (and then he started a little pirroret to the right) or issuing a considerable tranche of shares in The Company ( I assume that he meant Sundance and not Cam Iron, but I could be wrong). He then explained that currently the tennements were in 2 differing countries (Cameroon and Congo) and that there were benefits and draw backs to both. After about five minutes of explaining what we all already know, he then skipped off to the next question, with out actually answering my question and with out looking back.
So Jewels gets the impression that with the deals already on the desk that I'm going to be dropping my pants and taking a great big black one right up where the sun dont shine.
Now I was also interested to know if Sundance was privy to talks with the IMF, as they only visited Cameroon about 4 weeks ago.
GJ's reply was interesting. Now remember this with Mbalam only, and with current resources, SDL will be providing about 8% of Cameroons GDP.....
When this project is in full flight we will be
producing up to 20% of Cameroons GDP" Whilst Sundance was not involved with talks with the IMF on this occasion, the IMF, World bank, Bank of Africa and the like are big supporters of Sundance. They are backing us by making sure that the business process in Cameroon is fair and transperant. Now I'm paraphrasing this bit, but basically if the Government of Cameroon tries anything Dodgy, then this will severely impede the current process that they have embarked upon with the IMF (ie making their government more trasperant and less corrupt) leading to the IMF and world bank turning off the tap of monetary supply.
Now I wonder if GJ knows something about Cameroons GDP going forward from 2012? Either the countries oil and gas reserves are all but dried up, or there is a hell of a lot more ore in the ground than the shareholders know about ( and yes I am aware that Mbalam is open at depth and strike.) I also wonder if GJ was taking into account other mines coming on line between now and 2012 (eg Rio. Auora etc etc.)? An additional 12% of a countries GDP that has to be a hell of a lot of iron ore doesn't it????
After the meeting closed officially I cornered GJ and asked:
"Obviously you've had several months to consider the Non-binding proposals that you announced to the market in the last quarter of calender 2008, you must have a preferred outcome, how confident are you that you will be able to achieve your preffered outcome?" (I always try to ask questions of boardmembers that they can answer them without having to run foul of the ASX listing rules <more chance of getting an answer>)
I was very pleased to hear GJ say that negotitions were proceeding as planned and that he was very confident of achieving the desired outcome. Having said that though, I'm sure if you had of asked Woosha if the Eagles had a chance against Freo on Saturday, I'm sure Woosh would have answered that he also was very confident of achieving the desired outcome.
Something else that seems to have slipped through the cracks is that DL wasnt at the meeting. When giving appolagies GJ said that DL was in China on SDL business. Nobody else seems to deem this comment worthy of discussion. Maybe they are looking at the chinese rights to the "Wok in a Box" franchise or something.
Anyway just thought I'd keep you posted with some informed commentary, as there seems to be a lot of posting by people who have little or no relationship to the company or Cameroon (and hence little or no idea).
And believe it or not English is my first language, I just couldn't be fagged proof reading this dribble and don't have the facility to spell check when writing posts.
Ciao Jewels