Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Hi Extrader, and the figures being thrown around in the unbelievable Simandou saga are vast - for 'concessions'. Also look at the hell that has taken place over Simandou in the last 15+ years, whatever its problems Zanaga looks straightforward in comparison.
Hi Jiving,
Our posts crossed ! So $ 700M just for EXTENDING what is basically your OPTION to develop....there's gold in them thar [iron ore] hills !
ATB
Hi Jiving et al,
FMGL isn't the only 'jilted suitor'
From the recent Steinmetz/VALE court case re Simandou , https://www.miningmx.com/news/ferrous-metals/42025-steinmetz-hopes-sting-operation-enough-to-reverse-2bn-arbitration-order/
we learn that, despite "comments by José Carlos Martins, the former head of Vale’s iron business, that there was “something wrong” with the Simandou deal, Vale decided to go ahead [paying $1.5Bn for 51% of a CONCESSION, ie basically a 'concept ] because Simandou was the “only open door in Africa” to maintain Vale’s market share...."
ATB
Incidentally when I was just checking out RTZ's current stance & plans for their blocks of Simandou I came across this news link from 30 July: https://www.mining.com/rio-tinto-determined-to-build-long-delayed-simandou/
"The world’s no. 1 iron ore miner was able to keep the two southern blocks, but only after paying $700 million to the government in 2011. That guaranteed Rio tenure for the lifetime of the Simandou mine."
We often search for some kind of valuation parameters for Zanaga, interesting RTZ paid an additional $700m to keep their rights to 2 out of 4 parts of the Simandou project.
Mitch984. Thanks for producing those option figures. V useful to see - essentially AT is likely on some 2% of ZIOC capital - or 1% of the overall project. Quite an incentive to get top dollar.
It seems very likely the Chinese are going to be involved in the Zanaga project, that is the way the African resource sector is going. But that does not mean they will necessarily get or indeed expect 100% of a project. We see that in Simandou, RTZ is planning to develop its portions of the project (3 & 4) in tandem with the recently announced Chinese development of portions 1 & 2. There is no reason why Zanaga when it finally reaches development stage could not include Australian miners in the eventual development consortium. That Andrew Forrest personally led a delegation to Guinea prior to FMG's bid on Simandou 1 & 2 , strongly suggests to me FMG's interest in participating in African iron ore projects is genuine.
That said, the £2bn dividend scraped this week by Glencore could easily buy our share of the ZIOP.
"Given all the GLEN issues giving scope for an incomer to 'kitchen - sink', I can't imagine he'd want to leave a juicy rabbit for his successor to pull out of the hat..." ....
If only (LOL) !
PS Glasenberg, due to Glencore's canceling of dividend this week, meant he lost out on £180m divi payment ..... Although his wealth in terms of Glencore shares alone stands at £2.19bn .... so he could buy ZIOP with small change too.
ZIOC current MCap lowly £16m atm ...... lol
Will we ever see our patience rewarded ?
Hi Mitch984,
Thanks for running the hypothetical numbers.
A 1: 2 ratio between (a) 'golden handcuffs as we get to the short strokes' and (b) LTIP for 10 + years' service seems about right.
Based on 100p per share, ZIOC would be 'worth' £ 300M, GLEN's stake maybe more (control, 'connections', credibility), for a full worked and costed concession.
To put that in perspective..."In December 2008, a three-year EXPLORATION PERMIT to prospect for iron ore in Simandou, was awarded to BSGR Guinea, after the government of Conte granted RIGHTS TO MINE the northern half of Simandou, days before he died, to Steinmetz for $160 million. Steinmetz then soon sold a 51% share on to Vale for $2.5 billion...."
OK, we're not strictly comparing like for like; that was then, this is now; 'horses for courses'; apples and oranges...etc, etc
But whilst 100p would do nicely for most ZIOC shareholders (incl the 3 x team !), the problem is it would be chickenfeed for GLEN in cash terms. But GLEN could reasonably expect a premium...and given its multifarious business interests, lots of scope for direct and indirect trade-offs, both locally and elsewhere.
Another thought : it's minor, but Zanaga is a bit of 'unfinished business' for Glasenberg. OK, he may not want to be involved with a greenfield site, but he'll be thinking of his legacy once he goes.
Ivan's described as super - competitive. Given all the GLEN issues giving scope for an incomer to 'kitchen - sink', I can't imagine he'd want to leave a juicy rabbit for his successor to pull out of the hat...
ATB
ATB
100p seems a million miles away at the moment. A BS placing arrangement and 5p share price is the reality. ZIOC are taking P out of us all.
Some interesting comments on the incentive scheme and how AT would benefit. Here is my take on it.
From the RNS in 08/19 there are two parts to the incentive scheme for the three Team Members. We assume the three are AT, Harris, and one other we haven't identified as yet, none of the three being direct employees of the company.
1. Retention Fee Package
2,833,334 new shares were issued on 10/19 for the 2019 RFP. Assuming they were split evenly, then AT would have received 944,444 shares - worth about £52,000 at today's share price.
The 2020 RFP will be announced in December 2020, and will probably be the same I would guess.
So basically AT could have 1,888,888 shares by the end of 2020 - a decent incentive if he can help move us towards a sale of ZIOC for £1+ per share.
2. Long Term Incentive Scheme
This where AT could make big money. 13,633,335 share options have been allocated to this, at an exercise price of 0.01p (one hundredth of a penny). These options will be allocated dependent on either an EPP, or raising development finance, or a significant merger or acquisition. I quote from the RNS:-
Discrete packages of the Share Options will vest on the achievement of performance targets relating to any of the following: (a) the approval by Jumelles of the Early Production Project (EPP), including its potential technical and financial feasibility, as the basis for advancing the development of the Zanaga Project ; (b) raising finance either for ZIOC or separately for the development phase of the Zanaga Project; or (c) the completion of a significant merger or acquisition involving ZIOC or any member of the Jumelles Group acquiring a material interest (as determined by the ZIOC board) in a third party or a third party acquiring a material interest (as determined by the ZIOC board) in ZIOC or a member of the Jumelles Group.
Again, assuming all option shares are allocated and AT gets a third, he could end up with 4,544,445 shares that he will have to pay next to nothing for (£4,500 or so).
So, overall, if AT moves ZIOC to the sale stage at say £1 per share (not unreasonable), he could end up with more than £6 million in his pocket.
This of course assumes the three Team Members are considered equal as regards share incentive allocations, and of course that AT is one of the three.
Overall though, I think that is an excellent incentive for AT to get us sold in 2021!