We are 100% convinced that something will happen with Rusoro Mining (TSXV: RML) soon. If Venezuela loses their last ditch appeal to the judge's March 24th ruling that RML can collect on the Citgo auction proceeds, the auction of Citgo will occur as soon as September. Preparations for the auction of Citgo are already taking place today. The sooner Venezuela settles with RML the better it is for Venezuela. If the auction takes place and RML collects their $1.76 billion, RML goes to $3+ per share.
Here is a transcript from a recent article...
Recognized by the U.S. government, PDVSA's Ad Hoc board of directors reported that it is seeking "alternative and negotiated solutions" that prevent the liquidation of Citgo by its creditors.
In a statement released, the Ad Hoc Board reported that "this action is under development."
"The recent OFAC License 42 has made it possible to clarify the mechanisms to be used for the negotiated settlement of disputes and claims related to PDVSA. A proper interpretation of the regulation would allow an orderly solution with creditors, valuing the recent recovery of PDVSA's assets in the United States," the statement said.
For this reason, the board "confirms once again and unequivocally the best willingness to continue moving forward in a serious and responsible manner to promote negotiated trade agreements that allow the negotiated resolution of claims related to claims."
The statement makes clear that the board will act to defend rights to an asset that is strategic for Venezuela's energy sector.
The statement of the Ad Hoc Board of PDVSA highlights as more urgent the claims of Crystallex and OI European Group. The first is a Canadian mine that closed and whose assets are managed by an investment fund. The second is a subsidiary of the multinational Owens-Illinois (OI) that suffered the expropriation of its assets by the government of Hugo Chávez. Both firms denounced the measures in arbitration courts.
In the case of Crystallex, the board considered the liquidation request as inappropriate, while in the second the liquidation session was suspended as a precautionary measure and an appeal from the Venezuelan side is expected this week.
The board believes that OFAC's license that allows progress in the collection process in cases of 11 creditors already sentenced, represents a space for negotiation. The idea becomes relevant when Citgo is showing a financial recovery that has generated profits of US$937 million in the first quarter of 2023 and an EBITDA (earnings before interest, depreciation costs, amortization and taxes) of US $ 1,300 million. These numbers represent, according to the board, "the second best quarter in the company's history."
With these numbers, the board also shows that it has how to negotiate with creditors in a liquidity position of US$3.9 billion, a liquidity increase of 1.3 billion compared to the end of 2022. Its refining capacity also rose from 796 ml to 807 thousand barrels per day.
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