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Abbynparit, you are correct.
We are assuming that the brownfield is Vanchem, which has been closed for a number of years.
Therefore, we will have not only the cost of the production facilities themselves but also we will have the cost of the maintenance making it fit for purpose again!
I would not like to estimate this figure, but suffice to say it will be significantly cheaper than building production facilities from scratch.
I'm sure FM will get us a very good deal though :)
As you say, with the current price of FeV sky high, Vametco cash will be partly used for the cost of acquisition.
I agree Tyfoon... the man is unusual in that he plans a mid-long term strategic plan and then plays chess with the pieces very impressive leadership
Agree on all your points faramog, nevertheless that is the situation that the BoD are having to handle - complex and onerous rules, understaffed (and uninterested unless there's that envelope?) departments, and the murky, corrupt marxist politicians who say one thing then do the opposite.
It is what it is but now that I have all that info from that article, I'm even more in awe in how FM managed to acquire Vametco, little by little so as not to upset any applecarts, before removing all other entities with the exception of the BEE group in less than 3 years.
My point was that the red tape isn't being simplified, in fact, the opposite is happening, and hence my comment earlier about timescales.
But If he's done it once, he can do it again and I would bet half my holding that he's already partway thru the process , albeit quietly and behind the scenes.
depressing read Tyfoon..... Ramaphosa may be more business friendly and despirately seek significant outside investment .. but the Anc led government is still highly marxist lets not forget... as for wider ownershio thats just code for rewarding cronys as our current strike seems to show the workers are not interested in shated ownership but cash today ....
Thanks Nick. My limited understanding tells me development of brownfield is significant investment. However as that is yet some time away, the cash generation from vametco could go towards fulfilling some of that. Rest could be raised. Is that a correct way of looking at it?
Just on the subject of the Competition Commission and Section 11, I came across this informative article this morning which spells out the difficulties and the hurdles facing companies in SA when attempting an acquisition.
It doesn't make for particularly pleasant reading but I think it presents a lot of pertinent factual information and therefore offers us a better understanding of what BMN is facing, and perhaps also inject a little more realism into this board, certainly as far as timescales are concerned.
Having said all that, FM & Co managed to buy Vametco by cleverly navigating through the rules so I've no doubt they already have a great game plan for what comes next.
https://www.lexology.com/library/detail.aspx?g=cd91f80d-781e-4fd1-996f-b93b7fb3ae92
@Faramog well perhaps yes but let us not forget that the project is at PFS stage, so a BFS of some sort needs to be completed, be it in my view only, at a mine and compressor level. That will need a time period to be completed. It will of course depend on what further work has been conducted at Mokopone in the period since the PFS was released. That includes of course any further work with the consultants such as the MSA Group.
A hint that this process is well on, comes from thaw very China ore offtake that you refer to. That was never included in the PFS, so further work must have been carried out. What was always included was a mine and processor with a separate processor under a different company name.
Remember this from the PFS? :
“The Project will be developed under a “two operating company model”. The Mine/Concentrator will be owned by Pamish, the company which is the current holder of the Prospecting Rights for the Project and which has submitted the Mining Right Application to the Department of Mineral Resources (DMR). The Salt Roast Plant will be owned by a company still to be formed (SaltCo).”
SaltCo could just as easily now be Vanchem, because those words were written well before even Vametco was on the cards. The key though is the two separate companies, which given that Pamish were not planned to be part of the processor, always said very clearly to me, that the processor would be housed off site. One cannot carry out the most profitable part of the mining on someone else’s land, and expect them to play no part in it.
Jump forward 2.5 years and with money in the bank and brownfield still available, the processor has moved on but the principal is the same.
However, if we assume that the brownfield is Vanchem, then there will be a great deal of work required to bring the plant back into production. It is documented that the plant needed considerable upgrade works even before it shutdown for 3 years. Then there are the staff to find and re-train.
We should also not forget the Competition Commissions and the Section 11 process, both of which were conducted for Vametco. The fact that Vanchem is in business rescue will help but it does not eradicate the need for this process to take place.
I would hope that if Vanchem and Mokopone are the play, that the company has explored as many avenues as possible to reduce the planning, financing and construction phases. However, this is mining and it takes time to action things, particularly in SA. That said if the announcement comes inside the next few months, then I still expect them to beat AV into production. I am simply being cautionary over what, if I am right, will be a game changer for BMN and it’s shareholders.
quicker than that BBN.. was there not some chinese offcut or pre processed material at the top tgat could be got at and sold quickly
@Leafie the Annual Report clearly ties the expansion from 5,000 mtv to 10,000 mtv into further brownfield.
The Mokopone mining right still being defined as central to the 2018 strategic goals named in that same report,
Then there is the fact that brownfield processing is clearly defined as central to all expansion plans, due to its cost effective and fast track capabilities.
Therefore, it is for me very clear that the two go hand in hand together, and it is they that will drive the exact timing of the JSE listing, because it is they that require a capital raise of some sort.
It will come with a burden of sorts, but we could very see Mokopone on a path to production inside 2 years, with little or no debt on the books. That would mean a 10,000 mtv plus operation, with no or very little debt. That would be some achievement.
Maybe a SA brownfield acquisition be the route to a dual listing....
AbbyP, sorry.
There’s not much to say at the moment. Imo, it will almost certainly involve a share issue to raise funds for Mokopane or brownfield, but I await news from the Company to set out their full plans.
The share price will trade in line with AIM.
‘the stock price of a dual-listed company should be approximately the same in both jurisdictions, after taking currency differences and transaction costs into account. Otherwise arbitrageurs would step in and exploit the price differences. That said, price divergences do occur from time to time, especially when trading hours do not overlap and there has been a significant price move in one market’
‘There are numerous advantages of dual listing. Companies get access to a larger pool of potential investors.
Dual listing improves a company’s share liquidity and its public profile because the shares trade on more than one market. Dual listing also enables a company to diversify its capital-raising activities, rather than being reliant only on its domestic market.’
https://www.investopedia.com/terms/d/duallisting.asp
AP, apologies for not being Alfacomp or Nick, (something I often wrangle with late into the night) however this has been answered multiple times. The shares will trade pari passu and new shares will most likely be issued as part of a fund raise - potentially for Mokopane.
Alfacom, NickDerby, please can you shed some light on how do you see the JSE launch... Will new shares be issued or will aim shares be traded there as well. Id asked earlier but guess it got lost on the thread somewhere... Much appreciate it. Fyi..My holding hovering at 5.5