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Typo. one fourth of NPV
Ex, I agree with you, we will not get anything near the NPV. But the positive is that we are in same boat as Elphick and Glen, so should in theory get same opportunity to either pitch in cash for the project or sellout. In my personal view, I dont see 300P out of range here, with one third or NPV at 30MT. But would be fine for me
Agree completely 99 - all the key variables from the calculations are missing. It could be this is intended as the appetiser, if an interested party wants details they need to contact ZIOC management.
Regarding project NPV vs shareholder attributable NPV, the final Mining Convention gave ROC a 10% non-dilutive shareholding and a 3% royalty. In the event of a full buyout, my hunch is Glencore will swap their 100% offtake for a small royalty (they have done this before) so say around 2%. How do royalties deduct from NPV - no idea - so I roughly work on around 85% of project NPV being attributable to shareholders.
Hi Jiving,
"ZIOC has complete flexibility in funding obligations
• Takeout at NPV; or
• Dilution at NPV during construction "
That statement was used to support/justify the price of £ 1.56 at IPO stage, in the context of the then NPV. There's a lot of 'hope value' built in.
And I can't see PI's getting a free carry and / or monetising anywhere near the revised NPV.
A project creates value for its owners only when its cost is less than NPV, that's the whole point of the exercise, which is undertaken to determine the most efficient allocation of capital.
The increase in NPV is very welcome, but ZIOC shareholders at our level should not expect anything like the implied per share 'value' numbers being calculated.
I believe folk like us will be squeezed out pretty soon and -all things considered - I think my 200p per share entry in the 'charity sweep' is well under-pinned.
GLA and ATB
I hope at some point we get more detail on this, but it is currently very low on specifics. For example what discount date is used for the NPV. Is it the project NPV or the NPV attributable to shareholders (Congo have a 10% free carry). What have they assumed on the Iron Ore price and margin for Pellet grade etc. etc.
Good news on the costs, but we need more detail.
As a recent investor in HZM I can easily see why institutional investors are reluctant to take the risk.
So npv figures have no effect on shareprice whatsoever!
Like other AIM companies you can publish out of this World NPV figure but without a committed investor they mean nothing.
The big questions are
1-Why ain’t Glencore interested in taking on the project themselves -buy the other half out for circa a billion and they have a multi billion NPV project,They are supposed to create longterm profit streams and capital returns for their shareholders.
2-Are the directors going to sit on this for another 10 years or actually create shareholder value year -better to accept a £1 billion offer than get nothing and see the company die
Or as our broken market sees it, every $7bn is worth 8 pence a share. Roughly £50m mcap 🤣🤣🤣🤣🤣🤣
Total joke!
Just a quick take on how to translate NPV into share price.
Every $1b of NPV = £1.23 per share
(At £/$ 1.25; 652m shares & unexpired options)
FEED work is expensive (last presentation $25m as I recall). So strategic investor has to commit soon otherwise Zioc will run out of cash... something will have to give.
The NPV now is mind blowing and supports the valuations that some of us have outlined here ( take note beardozer, this is worth multi billions!!! 🙂😁 So excited!!
I like the " During recent engagements with RoC Ministries, communities and potential strategic investors, the burden of being the first mover in the region of high grade, low impurity iron concentrates for green steel production, is strongly supported and makes for an exciting future for Zanaga"
Seems to me they could potentially be very far in the plans and nice to see the strong support from RoC officials/ministries.
lets see
Marty Knauth, CEO commented:
"A large volume of work has been completed during the recent six months by ZIOC, MPD Congo and our consulting Partners, which I am very satisfied with. This detailed re-costing study further demonstrates that the Zanaga Project provides extremely robust returns for investors and significant infrastructure assets and positive legacies for the Government and people of the RoC. During recent engagements with RoC Ministries, communities and potential strategic investors, the burden of being the first mover in the region of high grade, low impurity iron concentrates for green steel production, is strongly supported and makes for an exciting future for Zanaga.
Stage1-Net updated value-
$3,681bn= $ 5.70 per share.
Stage2-Net updated value- $7,357bn= $11.40 per share.
The figures are much more detailed in the report, and are absolutely staggering..
Clifford Elphick, Chairman of ZIOC commented:
"I am delighted with the results of our 2024 Feasibility Study update, demonstrating the attractive economics of the Zanaga Iron Ore Project in today's market environment. It is exciting to have secured updated pricing for the development costs of the project from experienced Chinese partners with extensive experience in iron ore process plant and slurry pipeline design and engineering.
We look forward to presenting these results to the various strategic partners we have been engaging with and advancing our discussions further with them as we look to progress towards front end engineering and design of the project"
I don’t see any reference to the crucial iron ore price used in the 2024 FS figures. But looking at the latest updates to the 2014 FS figures contained in the 2019 Zanaga Presentation, if you take $110 as the base for FE 65% then the same NPV figures are
12m pa NPV (2014) $2085m
30m pa NPV (2014) $3943m
So the 2024 FS NPV figures: 12m is 1.76x 2014 FS; & 30m is 1.86x 2014 FS. Showing how the market has moved rapidly in our direction financially. Add to that our project has immense scarcity value as the only major high grade iron ore mine at an advanced stage of development literally ‘ready to go’.
To illustrate the central part NPV plays in Elphick’s thinking, whether its buy-in or buyout its always based on NPV. Here is the key section from the very first Zanaga presentation in April 2011. P.1 Investment Highlights:
ZIOC has complete flexibility in funding obligations
• Takeout at NPV; or
• Dilution at NPV during construction;
NPV is huge and even with the large capital investment needed there is literally billions of dollars to be made by strategic investors into Zanaga. Interesting Knauth finally spoke. He is obviously fluent in French and you would think leading conversations with RoC ministers. We are all set up now. Just need that big fish to bite and the share price would be in the £s.
Let’s see who takes positions today
Exactly nibj, we know for sure the Chinese have had them for some time - as they are doing the majority of the FS & have provided the power (& already know port details from past involvement). AT has acknowledged they were talking to the Saudis so it is v likely they have been aware of them for some time. But now the world can see them so if FMG, the Japanese etc want to act now they can see the basis for their bids. So we must be rapidly approaching the crunch point in negotiations, Elphick is Mr NPV & has always stressed all strategic investor negotiations revolve around NPV, the more competition the less any discount!
Incidentally I was specifically referring to NPV when I said the 2024 FS figures were nearly twice 2014 FS.
Agree, really solid results. I am sure these figures has already been in the hands of potential interests for some time, so going to be interesting to see what they can land here
Well they came through & the figures are stunning. First take, they are almost twice the 2014 FS figures:
12m pa NPV = $3681m IRR = 26%
30m pa NPV = $7357m IRR = 28%
This is what we have been waiting for & this is going to be the basis for any buy-in or buyout partners.
Elphick "We look forward to presenting these results to the various strategic partners we have been engaging with and advancing our discussions further with them as we look to progress towards front end engineering and design of the project"
https://www.londonstockexchange.com/news-article/ZIOC/feasibility-study-update/16446302
Driving I have zero influence on deciding publication dates & we may well get the FS tomorrow as you hope. My point is I dont 'need' to know tomorrow what the FS figures are, yes it would be interesting & would likely confirm our valuation hopes. But if there is tactical/negotiating advantage to be gained holding back the publication date, then I want the ZIOC negotiators to have every advantage, small or large, they can have.
The point is all to do with competition, as ZIOC investors we theoretically want the most competition we can generate for the project, in order to drive the highest price. But the exact opposite is the case for the bidders, they want the least competition & the public release of the FS figures would potentially maximise competition. Often in these situations the two parties agree to limit competition for an agreed period via an Exclusivity agreement that typically lasts 30 days+. A less legalistic, more informal approach might be for ZIOC to simply hold the FS release back whilst negotiations are positive & leading towards a satisfactory deal. Just a thought, it may all be irrelevant conjecture if we get a 7.00 RNS tomorrow.
Jiv- I am a current shareholder, my interests(should) trump future “potential” shareholders.
I agree with you that the delay until the last day in April(unless we get a RNS today), maybe due to “other” behind the scenes activities, but I still, as a loyal shareholder “EXPECT” to be updated before end of play tomorrow.
Even if that is to be an update, that they cannot provide the updated costings.
I also note that since the restructuring of the company in late 2022, the board has been adhering to informing shareholders of developments quite stringently.
Gla.
We will see tomorrow Driving how it pans out, for me its not a big deal whether they come tomorrow or another date.
The publication date of the FS could well be a negotiating point with potential investors.
Jiving-
“The final results of the 2014 FS update are expected to be announced during April 2024”.
Therefore I “expect” to be updated.
Gla.
We hope they are in detailed negotiations with one, or even better two, serious bidders (China vs Saudi/Gulf?). If that is the case should we definitely expect news tomorrow - the RNS only stated they "expected" to update us in April, that is not a firm commitment more an aspiration.
I don’t think you and shrewd count as everyone. I’d say the minority think that.
Everyone appears to be expecting more disappointment here and fully expecting to be let down be the board once more-Chinese calculators must be on a go slow.
With luck Elphick and Co descendants will make some progress by 2150!