NIGER TRUCK DEAL-Just got better! As we learned in yesterday's PR, Lee Hamre announced the results of the 2 week trip to China was a success.
What was so successful about it an unacquainted or prospective investor or casual tire kicker unfamiliar with the history of this deal might ask? Over the course of this deal there have been a number of changes and assurances asked for by financiers and the government of Niger. All along, AMMX has responded quickly and successfully to achieve the requirements. These changes have taken the deal from requiring 1 (one) bank in Niger to 3 (three) banks in Niger. Another change was to get private sector (companies etc. in Niger) involvement. Approximately 2 months ago, it was announced that 300 out of 500 or about 60% of the first batch of trucks were contracted. From that point up to the conference call, we did not hear about any increase in that number. In yesterday's PR we learned that the government (Niger) and financial partners were requesting that the terms for payment be changed from 3 years to 5 years and AMMX went to China to renegotiate the terms with the Chinese entities involved. Lee and Kevin were successful.
What this does is make the deal more affordable to Niger and the companies that are going to pony up the payments for the 3600 trucks, it also increases the overall probability that the deal will be completed and executable and sooner. There may also be a positive impact on the add-on deal in which AMMX is going to be the authorized Factory Service provider for these trucks, as if getting a commitment from the manufacturer to consign a parts inventory of $3 million dollars to AMMX for warranty service wasn't a clear enough sign that this deal is going to be completed. IMHO, I believe Lee has saved this deal and achieved an even greater level of assurance that the whole deal is going to be successful.
AMMX is going to get 2 revenue streams from the Niger Truck deal, the sale of the trucks and now the service on the trucks.
Another point for consideration is this, there are other deals in the works with the Niger government that more or less hinge on the success of the truck deal, including a Solar Power generation facility and a dry port, and construction equipment deal with the Niger military ($15 million worth). With the change in the payment terms for Niger, this will free up funds that can be allocated to these other projects.
