Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Thanks atg for resharing and reminding us of this...its good to rewatch and reiterate just how big this is and how important it will be for China....looking forward to these next couple of weeks...i really do believe we are close now!!
If you listen to the interview content and consider 6.5 months have past since the end September update...and the recosting excersise completes now...
..well, how can you not be excited by the possibility here??
Market is fast asleep.
Just had another listen to Andrew’s chat with proactive investors in October.
Well worth another listen.
https://www.proactiveinvestors.co.uk/companies/news/932353/zanaga-iron-ore-to-benefit-from--china-aggressively-pushing-to-secure-large-global-iron-ore-assets--932353.html
Thanks for clearing that up Extrader. Yes I had forgotten that Glencore/Xstrata buyout option was only valid for a limited time period.
Thanks for this - AIUI, an NPV calculation only kicked in where Xstrata / GLEN wished to acquire ZIOC within 90 days of FS...and ZIOC didn't agree the offered price.
That didn't happen, so technician is partly right - "if we're sold to a 3rd party we can be bought for whatever Glencore and our BOD agree to sell us for " and 99icecream is also right , aka 'tag-along rights' - .."If Glencore sell their stake in Jumelles, ZIOC has the right to join the sale at the same price. If ZIOC decides to sell to a 3rd party Glen has the right to buy ZIOC on the same terms."
IMO
The net effect of the Pre-Emption and the Tag-Along rights means that Glencore are effectively in total control of any sale of Jumelles.
You need to read the RNS : Supplemental Agreement with Glencore Xstrata -Fri, 13th Sep 2013 07:01
Which announces the deletion of Glencores NPV based option (because at that time Iron Ore prices were too low). It also explains that Glencores Pre-Emption rights over ZIOCs shares in Jumelles remain. Also, ZIOC's Tag along rights over the sale of Glencores shares in Jumelles also remain.
This was when the share price was 110p
Taken from Edison report December 2011.
First call option. The first call option was granted in 2009 and exercised in February 2011 with Xstrata getting a 50% plus one share stake in ZIOP. By exercising the option Xstrata opted to fully finance the FS, which is expected to be completed no later than Q114. The PFS cost, which was partly funded by ZIOC using the proceeds from the call option premium, amounted to US$106m. The FS should require an additional US$250m in financing to be spent by Xstrata. The exercise of the call option by Xstrata triggered the implementation of the JVA governing the working relationships between Xstrata and ZIOC.
Second call option. According to the JVA, within 90 business days after the completion of the FS, Xstrata has the right to exercise the second option acquiring all the remaining 50% less one share in the Zanaga project from ZIOC. If an offer price is rejected by ZIOC, an independent valuation based on the project’s NPV will be determined. The JVA stipulates that an independent NPV is calculated based on the assumptions taken from the FS, using the average FOB iron ore price forecasts from AME and CRU, discounting the real cash flow at a 10% real rate and making no discount to the NPV.
If Xstrata decides not to exercise the second option, ZIOC will have to either co-finance the construction of the project (which we consider a highly unlikely scenario, given the scale of the project), or be diluted at an NPV. We note though that even if ZIOC is fully diluted, ie the company is not spending a dollar on the project following the completion of the FS, according to the specified formula and based on our own NPV calculation, the company’s interest in the project (therefore fully funded by Xstrata) will only be reduced to c 18% from the current 50%.
No thats not correct at all. If Glencore sell then stake in Jumelles, ZIOC has the right to join the sale at the same price. If ZIOC decides to sell to a 3rd party Glen has the right to buy ZIOC on the same terms.
Is it the case that if Glencore buy us they have to use NPV as a valuation method whereas if we're sold to a 3rd party we can be bought for whatever Glencore and our BOD agree to sell us for?
All I want from Glencore is there negotiating ability to get the best price for the asset. That in turn gets us the best price for our share.
I have never understood this Glencore shares business. No,bthey are not going to buy Zioc now and, no, why should any project sell out go via Glencore shares? Makes no sense.
It would make sense to buy ZIOC (from its point of view to eliminate tag-on-rights) and then have a 'clean' co that it could flip.
That would likely also be attractive to potential buyer as reducing possible 'conplications'.
We're passive investors in a minority stakeholder, all we can rely on is that (1) Elphick will look after his + mates' interest as best he can...and we'll get some benefit from that; and (2) GLEN won't sell out on the cheap...but will want its pound of flesh, too...
IMO
I was thinking Jumelles take the full cash into Glencore and Glen then issue our 50% in shares..
It really depends who’s doing the buying. I don’t think it’ll be Glencore though, they had their chance to buy.
I truly hope so...if we do get bought out will it be cash or maybe even Glencore shares??
Is this the week the sleeping giant finally wakes up?
So........we "should" get our RNS by next Friday. Trahar said mid April and next Friday is mid April.
"I was just trying to answer another poster's query as to why KP2's share price didn't go through the roof yesterday."
---- and now we know why.
No kidding! KP2 is the leakiest company on AIM. This happens time and time again. A total opposite to ZIOC.
"I was just trying to answer another poster's query as to why KP2's share price didn't go through the roof yesterday."
---- and now we know why.
Hi Jiving,
Definitely agree that its a huge positive step for KP2. I was just trying to answer another poster's query as to why KP2's share price didn't go through the roof yesterday.
Typically KP2 is down 16% today, most likely day traders cashing in gains from yesterday. I don't see a huge rise in the share price until more news comes through.
And, yes - I wouldn't mind a similar financial MOU for Zioc. In fact I wouldn't mind anything positive!
The re-costing exercise is likely to be important for progress in any direction. Some of the costs associated with major construction projects (ironic examples being steel and shipping...) have increased significantly in the last year. As have the complexities of “working with covid”, which has impacted the availability of specialist surveyors/engineers etc. I’ve seen this reported by other companies (notably miners) where I am invested.
So it is possible that there is a genuine delay. Or that the “required” output hasn’t been forthcoming and further work has been requested.
You could say we have had a MOU for 17 months in that COIDIC said they would offer a route to finance as part of the agreement. Before people get too excited, AT did say that the driving force for the re-costing exercise was not COIDIC and was not a pre-requisite from any interested party. It was for the project to have up to date costings so that they could show a far cheaper investment case.
All I can hope for is that off the back of the lower costings, we produce an updated NPV and prospectus for JV / investors / acquirers.
AIMO