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£24mn of market cap value transferred from Bacanora to Erris via Zinnwald In return for BCN getting a 44% shareholding in Erris Market cap £4mn at 10p a share Re-rate to 33p coming here in the blink of an eye
Yes nice summary lazygun. Also add the strategic location of the lithium deposit in Germany. Deal with audi or BMW in the wings? :)
That should have said zinnwald is the most advanced project....
L.
I think people are only just starting to wake up to what a blinding deal Erris have pulled off.
In effect they’ve paid notionally £4.5 million (90 million shares at a notional,5p per share) for a 50%interest inaproject with a npv of €428 million, and ebitda of €58 million a year for 30 years,
With a paltry €159 million capital,cost.
Net they’ve paid about the equivalent of £3.5 million for it, as they’re getting €1.35 mln euros as part of the deal.
Also, out of cadence minerals, savannah resources, and even Bacanora’ssonorra lithium project (Which admittedly I think is about 10 times the size of zinnwald, ), is the most advanced stage project as it already has a completed dfs. The other projects are still developing their dfs.....
Further the other 50% is held by a company that has been in administration since 2017. So there is the potential to acquire this 50% for a decent price too....
L
Many thanks for your comprehensive response to my question.
regards,
Jim
Goof news., I meant good news
Lol
L
And, the consensus is that this is goof news.
Essentially, Erris is transforming from a small, highly risky early stage exploration play, into a much bigger short/medium term producer of a resource that is expected to become massively in demand in the next 30 years.
On top of that, you have a quality board that knows how to manage finances, and who were instrumental in securing a $325 senior debt facility for another resource project very recently (Jeremy Martin is also involved with Horizonte minerals), and between him and Dave hall , secured said facility, which stands us in good stead for this project.
Further, one of the new shareholders who took part in the placing is a guy called Henry maxey who put in £1.5 million of his own money, so just under half of the placing. Henry maxey is the chief investment officer of ruffer investments, who historically have had a stellar investment record.
This guy knows what he”s doing. He doesn’t tend to back losing projects.....
Also, Bacanora can’t sell their stake for at least 12 months, and I have heard, though I have yet to see this in writing formally anywhere that some of the placees have give similar undertakings (don’t quote me as I could be wrong on that, but it is a rumour that I’ve heard).
This is even better for shareholders because it means that the bulk of the new shares coming into the market as part of this new company, can’t or won’t be traded, so the free float won’t be that much bigger than it currently is.
Free float, is roughly 19 million shares (about half of the current Erris shares, plus around I believe about half of the new placing shares, so about another 30-35 million. The rest are all held by long term backers/investors...
This should help the sp maintain a stable footing post the egm.
At the moment, the sp is motoring because the free float is shrinking massively. 45% of them are held between 4 shareholders, plus a range of other hnwi /long term investors who have signficant shareholder invis, but just under the 3% threshold so they do not have to be reported to the market, and because people are buying in in order to qualify for the free shares in Erris gold resources...
L.
Apologies, his was meant for mymy
Rgds
L.
Rajbury,
Subject to Erris shareholder approval next Monday, Erris have agreed a deal with Bacanora lithium to acquire deutsche lithium which holds 50% of the zinnwald lithium project (or 50% of deutsche lithium) . I forget which without checking the admission doc again. It doesn’t matter either way particularly for the purposes of your question.
In exchange for this, Erris are issuing roughly 90 million shares in Erris to Bacanora as consideration for the project. Additionally, Bacanora are giving to Erris €1.35 million euros, as well as the zinnwald lithium project team. The cash was bacanora’s obligation under an agreement it had with solar world who own the other half of the zinnwald project, in. Order to continue the remaining development steps for the next 15-24 months, which should just about bring the project up to a point where they can get it into production (for which financing at a project level of around €159 million euros will be needed to cover the mining/processing infrastructure etc.
Additionally, Erris have just completed a placing at 5p per share, to raise £3.75 million - so another 75 million shares, also subject to approval at the egm.
In total, Erris will have around 204 million shares in issue after the egm.
At the egm, the proposals also include one to change Erris name to zinnwald lithium Plc, and all the issued shares will in effect be replaced by equivalent shares in this new zinnwald lithium company.
Now, Erris up to this point has 38,836787 shares in issue, and at this time is primarily a resource exploration company, and have as at end of last year signed up for an 80% earn-in option agreement with green ore gold ltd, who own exploration rights over highly prospective land in Scotland. The earn in kicks in automatically if Erris successfully produces a jorc compliant estimate of gold of 250,000 oz or more over that land.
The consensus view amongst various people who have history and knowledge of that land believe there is confidence of finding signficant commercially. Viable grade subsurface gold mineralisation up there, and therefore the board determined that this project should not be diluted by the new shareholders joining Erris for the lithium play, and hence the Scottish gold project which rather neatly is actually held by a subsidiary of Erris, called ERRIS gold resources ltd, should be of benefit only to the existing shareholders of Erris (ie those that own some of the current 38,836,787 shares in Erris). So, also as part of the proposals, the existing shareholders in Erris will also receive on a 1 for. 1 basis, share certificates in Erris gold resources ltd which post egm will be an unlisted company, with €400k cash injection from Erris to continue their exploration work.
Their intention is to find a route back to market in the not too distant future.
Dave hall/aiden levelle will go with Erris gold resources, and Anton du plessis and Jeremy Martin will stay with Erris (soon to be zin
Hi JPP, I know nothing about XO and it sounds like you've spoken to them. If not, I suggest you contact them. You can email them at enquiries@x-o.co.uk or phone them. Here's the link. https://www.x-o.co.uk/contact-us.html
Perhaps they can't accept your vote one week before the date, but I would query that by phone. Obviously I don't know how long you've held your shares.
ATB
Hi Jet,
I'm with XO and so I haven't voted. I only have a small holding (feeble excuse I know).. They charge £20+ VAT and need my instructions one week before the AGM date, so I've missed the boat.
He s a question.. I'm assuming the vote only takes into account votes cast?
JPP, have you not voted yet then? You need to find the Voting Mailbox on your platform, and return your vote in good time for it to be counted.
ATB
I'm rather impressed his broker sent him a letter :))
MyMy...take a look at the 8 Oct RNSs; basically, Erris has purchased a company and is giving us shareholders some stock in the new company, Zinnwald
Erris is a new stock for me, which I entered into recently. I was surprised to get a letter from my broker on Saturday to say that subject to approval at GM on Oct 26th, I will receive 1 new share for every share I hold. That sounds like good news. Can anyone explain why. I couldn't get a definitive answer from my broker ( HSBC ). Would be interested to know. Thanks.
This one has a very long way to run before it becomes fair value
Assuming the AGM approves the proposed deal they will have:
50% of a lithium project in Germany, with a good chance of getting the remainder
NPV of the project, net to Erris shareholders of £190mn
£6mn of cash / no debt (placing, existing cash, cash at target)
A de-merged gold project at Loch Tay
Erris can also buy out the 2% net profit royalty for €2mn so the truth is that they got their hands on the Zinnwald project for song
Bacanora has shed about £24mn of market cap since the deal was announced so that equity value is going to go somewhere - I reckon that after 26th October formalities it will appear here as Mr Market starts to put a true value on Zinnwald
Strong buy up to £25mn market cap
A de merged gold project at Loch Tay
Must be time for herd to join in :)
Hard to buy volume... Gla
Monday 26th. 25p target by end of week
When is the agm and vote?
Five alive days to go egm.. Momentum with this. About to pop. :)
I wish I could, Stretchum but I'm all tapped out, with this and another Aus gold share.
Where's your count down? :)))
No stock. Fill your boots
She goes. Be quick. Buy
:) that's the deal here. Incredible potential. It would not surprise me to see a play for erris gold very soon..