I saw this:
In repayment of the Cline Debt (which is interest free), procure NECC to pay to Cline:
§ On completion US$3M in cash;
§ On completion US$5M in cash whereupon Allegiance will have the benefit of the US$5M cash bond
held by the State of Colorado;
§ On completion US$3M in Allegiance ordinary shares at a deemed issue price equal to the higher of
A$0.08 per share or the 20-day VWAP and these shares will be subject to 12 months' voluntary
escrow; and
§ Post completion, 60% of NECC’s retained earnings after NECC makes provision for any preferred debt
payments (NECC is entitled to secure US$40M of preferred debt over the Cline Debt), and provision
for sustaining and working capital requirements.
Cline has agreed to waive the US$5M cash payment on completion in consideration for a cash payment of
US$6M on or prior to the commencement of the commercial production of coal (defined as the operation of
one production unit on at least a five day and night schedule), no later than 1 September 2021. If commercial
production of coal does not occur by 31 March 2021, Allegiance must pay US$1M to Cline. Allegiance may,
at its option, make this payment in cash, or shares in Allegiance. The US$6M cash payment and the US$1M
(whether paid in cash or shares) will be applied towards the repayment of the Cline Debt.
My ballpark understanding is this, the last time I made notes: MHY owns ~15% of the Cline debt (I'm not even sure about that). ~17m CVR's. The $3m payment
might imply 3 * 15% / 17 = $.026 / CVR at some point. But I could very well be mistaken. CVR's are not tradable and the whole Allegiance Coal saga looks like such a trainwreck that I'm not going to put too much effort into any estimates.
That said, don't get me wrong, I'm still very happy with this position as it was literally free. And if the mine somehow works out it would imply a windfall.
