The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
$28k/tonne
I wrote M&G saying something very similar to this and all I got after some time was a bureaucratic letter saying a lot but actually saying we cant comment on this to individuals. As I may have said previously I have never bought an M&G fund simply because whenever I cast the net their performance never cuts the mustard, so I say if they dont make some noise about this it will prove they dont manage peoples cash in a responsible manner !
As should our directors!
With lithium at $28/tonne this deal is looking worse and worse every day. Offer should be at least double, not 2 to 3 pence. M&G would be throwing their clients money away at this price, they must be under an obligation to access again.
Mr C
I may be wrong, but we have irrevocable undertakings from Directors in respect of their shares, and a Letter of Intent from M&G according to the latest update. My understanding is that a LOI is rarely, if ever, binding. It is just an agreement in principle. Give the Li price growth since the offer was updated/increased in late August then maybe M&G are refusing to make their commitment firmer? Who knows.
I suppose one way to enhance the bid would be for GF to throw their share of the ZNWD shares into the pot, but given they only have 29$+% of the BCN shares that would only imply an increase in the offer by between 2 and 3 pence
Good point Dee which I was too Dim to pick up on. As it is a dividend then even if the offer becomes unconditional those not voting in favour, and so retain their shares (unless 90% acceptance is reached) will get the ZNWD shares.
I would also add that the 3000 acceptances are out of a possible 650,000 that aren't registered within nominee accounts.
3000 out of 650,000 = 0.46%
Nominees will likely report in towards the end.
This is where the offer becomes a bit of a nonsense - if i accept now then my shares go to escrow - i can't trade them. There is a way to get them back out again but i bet its not easy. TBH the ZNWD shares doesn't make the offer that much more attractive because of the complications. If it was a straight 73p per share I think there would be more takers
FYI You receive Zinnwald shares only if enough other BCN shareholders accept the offer so that the 50%+ quota is met.
So it's a classic chicken and egg proposition: People are waiting to accept until they have the Zinnwald shares, but the Zinnwald shares won't be distributed until the offer is accepted.
FYI
You receive Zinnwald shares whether you accept the offer or not.
@feverclucker - they wil still be entitled to ZNWD shares up until the offer goes unconditional (if it does) which is provisionally the 14th Nov.
They need to buy and accept offer in time to get.... About 7% upside from 67p to buy ?
Why are people still buying do they think offer will be raised or are they still eligible for dividend in specie for Zinnwald?
john - not saying you're wrong, but I thought someone had confirmed M&G were on-board, I may be mistaken ? But I hope you are right.
I am beginning to expect that the offer will be increased to secure M&Gs support, because GF know that their support is crucial. With them on board the bid will probably quickly be unconditional - and once that happens resistance is likely to melt away due to the possibility of becoming a minority shareholder, possibly in a private company.
3 weeks ago I wouldn't have thought it possible that take up would be so low, even with known resistance to the offer I would have expected several % acceptances by now. As already noted I'm not sure what the mechanism would be to enable that - but GF have already bypassed a second S/H approval by getting the ZNWD shares offered as a specie dividend. Now the vote has been passed to allow payment of a dividend then perhaps this evenings earlier idea of a cash distribution (via a special divi) could indeed be a solution? M&G seem to be delaying and they know the effect they are having.
Will have to agree to differ. I really do not see that raising finance will be a problem. They managed to put a finance package together when there was far more uncertainty. BCN only have to find 50%, they now have more cash in the bank, lithium market is now booming and there would be economies from the fact that Garfeng are heavily embedded. Finance would undoubtedly be on improved terms. It's fine that you want out but your worries over finance really are a red herring. They let the finance deal with RK lapse because firstly the board had the intention of selling out to Garfeng and secondly the terms were agreed when BCN was not in such a strong position, so now an improved agreement could be found.
Hi guys- Im a shareholder since 2014 here so Im hoping for a better outcome than the current Ganfeng offer but it does look like the BCN mgmt have been lulled into thinking Ganfeng where on their side while they had a plan to buy the whole of Sonora in stages.
First they agree a 29% shareholding, injecting cash into BCN and then a 50% direct stake in Sonora at the project level, with a cash payment there too. From that position its going to be very difficult for BCN to go elsewhere for the finance needed. Ganfeng have been bidding for lithium assets around the globe and mainly been successful in these bids.
The current capex has been revised to $420m, so BCN need $210m and they have most of this in the bank but Ganfeng are heavily inbedded in the design, engineering, funding, offtake all the way down to commissioning so it looks like BCN are now paying the penalty of trusting them with so many aspects of the project.
They may even want the full offtake, cutting out Hanwa from their initial 50% offtake.
Think BCN board have been incompetent all along. Really messed up with first round of fund raising with timing and strategy, then out of desperation let Garfeng in for a song. Sold it to us that they had made some brilliant move. They have then been happy to let themselves get pushed around by Garfeng whilst feathering their own nests.
However, despite the above, the reality now is that BCN is not in a bad state. Garfeng are a strong partner (despite having there eye on the whole pie, which is just good business for them). There is a lot of cash in the bank and relatively little finance needs to be raised and could probably be done on a lot better terms than before because there is far less risk. We are led to believe that the project is still on target for 2023 production. We don't need a plan B, plan A would still work and there is no need for a sell out to Garfeng.
I agree they dont have a plan B, but this brings me back to the scenario that they cant be SO incompetent they couldnt organise one, instead the BOD have been 'in bed' with Ganfeng all along. My view always was this is boardroom corruption, and wouldnt it be nice just once in a while to let an AIM CEO know he cant just do what the feck he likes !
Hi Bluegrass- BCN have been ready to build since the end of 2017. It that stage it was agreed that the clay extraction would work and its been all down to financing since that date. They have had previous white knights (Next View in 2017/8) who have failed to cough up and in mid 2018 they had roughly half the capex funding needed ($240m vs $460m) but before Ganfeng turned up in 2019 they never closed this gap. The lithium market is different now of course but with Ganfeng holding 30% and the bulk of the rest of the Sonora funding package lapsing now, they dont have a creditable plan B as far as I can see.
Everyone has to do what's right for their own personal circumstances.
We believe we have enough to stop Ganfeng reaching 75%. M&G still have not accepted.
SteveY1 - It's up to you if you wish to accept - But at least do so for the correct reasons. Bluegrass is correct - BCN cancelled the debt-finance, not RK.
Quantum, nobody can tell you what to do - But there are many, many of us who aren't accepting this offer.
Thought BCN chose not to renew this because terms were not good. Would not think that it would be a problem to put any required finance in place if required.
Hi Quantum Star- I know it wont be popular on here but I accepted the offer re my shares. Ganfeng may well have to raise the offer a little to get over 50% but the key for me was that pre Ganfeng BCN werent able to get the full funding package in place and this was put into even more doubt when RK cancelled $125m of their $150m debt offer in the summer. So it looks like Ganfeng have BCN by the short and curlies, a 30% stake plus the firepower to get the capex in full. I hope that helps.
67.5p
Hi Quantum- For each BCN share, Ganfeng are offering 67.5p plus 0.23589 Zinnwald shares, which equates to around 73p currently
@Matthew125 Where did you get this myth that Ganfeng needs 75%+, and why are you perpetuating it? If they want to go private they need 75% of the shares showing up at a general meeting, which given the apathy demonstrated so far might require only the 50% they are certain to own.
@Bluegrass If there were any progress at the pit site the Board would be obligated to update the latest announcements, which reported that there is no activity there and nothing planned because, well, the Chinese are more afraid of the virus than are miners in most other countries. No one believes the Board these days anyway, except when they fantasize about production starting by 2023.
Trading volume seems to be dropping, but their are still MILLIONS of shares being traded and I wonder about the plans of these buyers. Are they signing up for the Futile Resistance? Are they already members of the Opposition, increasing their holdings? Or are they just getting in line for their free ZNWD handout? Time will tell.