It’s not just the way PPX Mining (PPX.v) has suffered two significant Cease Trade Orders (CTO) in recent times for failing to correctly file financials, first a brief-ish period in 2020 and then a long one that covered basically all 2021 and into this year:
It’s not the way the share price has been decimated by its management and board over the years, even as heavy C-suite and managerial salaries get paid in full. It’s not even the way that, just after lifting its CTO last week, PPX reported a net profit on operations for four successive quarters but then in the next breath, told the world, “PPX has not declared commercial production at Mina Callanquitas.” After all, the mine is in production and commercially profitable, what other items are required for commercial production?
No, the real strangeness revolves around PPX and its dealings with a third company called AMM, a mine machinery supplier from which it apparently ordered and paid for a 150tpd processing facility for its Igor/Callanquitas mine. In its recent news release to market the Peruvian contractor operating Igor, Proyectos La Patagonia SAC, told the world PPX was in breach of contract with them due to the way it had pledged to build a 150tpd processing facility. The plant was an integral part of the deal and a stipulation of the contract between Patagonia and PPX, as once the capex was spent and the mill installed the high-grade ore would no longer have to go to outside toll-millers. Instead, value would get added in-house, with more profit resulting for both Patagonia and PPX. This desk understands PPX originally complied with its side of the deal by ordering and paying for a $4m processing facility from the Peruvian private company AMM, who duly promised delivery at a specific date. However the machinery didn’t show and as a result, Patagonia (as operator at Igor) had to keep sending its mined ore to outside buyers. That wasn’t the deal and the contractor Patagonia wasn’t making enough money to get its investment back, so Patagonia insisted PPX get the machinery on-site. Apparently AMM continued to promise delivery but instead, missed deadline after deadline for delivery and to this day, even though PPX apparently paid for the full mill and kit required to process up to 150tpd on-site, it has never showed. And this is where the real strange stuff begins, because under normal circumstances if you gave a company $4m and get nothing in return you’d complain a little, right? Not PPX, as despite apparently spending the money and getting nothing, it hasn’t opened any sort of criminal or civil procedure against its failed supplier AMM. No complaints, no follow-up and no reasonable explanation given to Patagonia by either PPX or AMM for the missing machinery. All this explains why Patagonia has taken PPX to court, with the judges recently granting an injunction in Patagonia’s favour on the Igor property due to breach of contract and loss of earnings.
Would PPX.v CEO Brian Maher or his faithful and loyal legal counsel, Fernando Pickmann, care to comment on these apparent irregularities committed by AMM? Is PPX going to chase up its supplier and get its machinery delivered? After all, a lawyer of Pickmann’s reputation would surely want to move against a supplier that welches on a deal and keeps the millions of dollars paid. Wouldn’t he?