Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
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That We are at a mind boggling 99.31% discount to NPV..
Now don’t get me wrong I’m fully aware we will not get anything close to the full NPV, but don’t let this insane valuation anomaly pass you by, it maybe the greatest opportunity we ever get!!
The canary in the coal mine theory should be put to rest by the recent board statements..
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.
From this foundation, the upcoming FEED phase will not only seek to validate and enhance our technical confidence but critically, develop Zanaga's management plans around environment, community, training, health, water, mine wastes and ultimate closure. We believe these are equally as important as safe and reliable engineering, and financial viability."
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"
Lassonde curve-https://images.app.goo.gl/5aGPvnMV2Dims3rn8
* The most likely time for a major to purchase a junior mining company is after Feasibility Studies are complete but before construction is underway. This is the optimum time for a major company to acquire the project for the best value/risk ratio.
No prizes for guessing where we currently are!, sit back and enjoy the popcorn…
Gla.
Hi Jackshaft, what do you make of the current 99.31% discount here?
Hi Jiving
I worked in the city as a mining analyst for several years - have been in the mining industry for 40.... this is the rule of thumb we used. Hope it helps with your thinking... best
Even more examples of Saudi and Chinese canoodling.Today 20:02
We are all well aware that both the Saudis and the Chinese are desperate for future supply of high grade ore. Are either of them really going to damage this relationship by out-bidding or trumping the other to acquire either all or a percentage of Zanaga. It really does look like some sort of "partnership" of these two suitors will feature prominently who eventually acquires control of Zanaga.
AIMHO and DYOR but usual...alwayshoping.
https://www.arabnews.com/node/2513451/business-economy
STPM-
I agree, added again!
Can’t be long now..
Gla.
From the impatient to the patient.
One of my favourite sayings, possibly erroneously attributed to John Maynard Keynes. What he definitely said was: "There is nothing so disastrous as a rational investment policy in an irrational world." My absolute favourite is: "Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone."
“The market can remain illogical, longer than you can remain solvent”. Comes to mind..or have I been in here so long, it has merely made me illogical!
Come on board, time to deliver our strategic partner…
Gla.
Surely to god, this share price should be inching up not down.
That's IF any substantive news was imminent 🤷🏻♂️
Can the market really get it THIS wrong 🤔
Ah!
'Ollombo' is actually 'https://en.wikipedia.org/wiki/Oyo_Ollombo_Airport'
Oyo Ollombo Airport
Denis Sassou Nguesso Airport
ie Big Den's home town...
;-
(1) Equatorial Congo Airlines (ECA) emerges from the ashes, with a flt from Brazzaville to Pointe Noire on a 737-700. Little Den on board, 'cos ECA is a J/V with China's AVIC.
The aircraft will also fly to Ollombo (?) , up-country.
.."Minister Denis Christel Sassou Nguesso stressed the importance of the partnership between Congo and China, through which the Chinese company Avic has already already launched work on the construction of the aircraft maintenance center in Brazzaville, as part of the process of revival of ECAir.
Under this partnership, which will increase in scope at the 11th grand commission between the two countries , scheduled for June 26 to June 27, ECAir is to obtain obtain three aircraft that will join the fleet by next September, announced next September, announced announced the Minister of Cooperation."
Note this : The Aviation Industry Corporation of China (AVIC) is a Chinese state-owned aerospace and defense conglomerate headquartered in Beijing. AVIC is overseen by the State-owned Assets Supervision and Administration Commission of the State Council. It is ranked 140th in the Fortune Global 500 list as of 2021, and has over 100 subsidiaries, 27 listed companies and 500,000 employees across the globe. AVIC is also the sixth largest defense contractor globally as of 2022 and second largest Chinese defense contractor with total revenue of $79 billion (from both defense and non-defense services.)
https://en.wikipedia.org/wiki/Aviation_Industry_Corporation_of_China
Hmm...
This all looks like a re-run of Pan Am's 'Trojan horse' re-militarisation role in Latin America and the Pacific pre WW2, see
https://academic.oup.com/jah/article-abstract/107/2/525/5907750
(2) The editorial complains about the growth of social media leading to .."Demands and calls for demonstrations
against insecurity, lack of water and electricity and poor governance , now the most frequently used channels to denounce a situation. This increase should be a call to public authorities, because these means of communication encourage the depravity of morals and represent a perennial danger to the extent that they accelerate the unfiltered spread of the most pernicious, if not seditious, messages anywhere, anyhow..."
(3) A World Bank governance report on a new audit / control system has revealed that the country's 60,000 civil servants include at least 10,000 'ghost 'workers and .."there are also 180 registered employees who are not included in the finances file. The system also identified more than 3,000 people using a duplicate identity, i.e. 2,800 who have the same first and last names, and 300 of the same personnel number with different names..."
The Minister in charge said he was grateful these errors had been pointed out and that they'd soon be a distant memory.
Full marks for candour!
GLA
So presumably you're not a shareholder? Please go to the back of the class and join Eddsy and DANNYBAREY. I HATE that kind of thinking! But it's so easy to slide into. At the same time, seeing Starmer in his shirt sleeves made me want to vomit!
They'll all be having holidays in the same villa their Tory predecessors frequented. Owned by the same man who used to think the Tories were wonderful. Anyone who wants CHANGE should vote REFORM.
If it’s for dreamers…….. I will dream on.
"Something made ZIOC hire Knauth and tell us partner news was imminent...." is the only reason I haven't sold half my holding. I'm happy with China not being interested - there must be plenty of other suitors. We all have big plans - including Elphick! And we all want to be put out of our misery - what a sad indictment of what it means to be a ZIOC shareholder!
Like it or not Sushi's post has started a good debate and reflects probably quite a few market participants' view that ZIOC is for dreamers. Obviously for those who have followed the news closely we have seen a new CEO, hydroelectric deal and are being led to belive port news and a strategic partner are close. Zanaga is very high grade but say China don't want it, would that be Zanaga canned or do the Japanese and Middle East step in? It's very hard to call. Communication from the company is minimal and the share price is awful. Lots of us are fed up. From a personal perspective, I have a block of flats on my radar that I want to buy and use for income. Beardozer wants his mansion. Others no doubt have big plans too. I have reached the stage where I just want to be put out of my misery - good or bad news. I didn't like the Shard snippet on the last RNS as joint broker normally means placing coming but ZIOC have always tried not to dilute. I was expecting partner news and maybe a small raise for the partner to be happy ZIOC are contributing to the next stage or for Shard to drum up more interest in the stock. The latter hasn't happened going by the share price. I am wondering if there is more to the Japanese leak someone posted a few weeks ago. They don't like to rely on China for their iron ore and we know Little Den met with Japanese officials late last year. Something made ZIOC hire Knauth and tell us partner news was imminent....
Thats good stuff JackShaft, is it from the Internet & if so do you have a link?
We would be around stages 2-3, all permits & permissions are in place. The type of FS they are undertaking with the Chinese is intended to lead to an EPC contract which would suggest that project finance is likely essentially in place subject to the crucial $600-800m of equity finance being provided. So discount to NAV around 30%. But a couple of but's & if's.
i. Which NPV is likely to be the basis for negotiations Stage 1 @ $3.7b or Stage 2 at $7.4b - quite a difference! Also should any allowance be made for the unexplored 40% of the Zanaga mountain range which might make a Stage 3 production level up to 60m pa plausible?
I could see an argument that a buy-in partner would expect to buy a stake based on Stage 1 NPV - then all parties benefit from the future development equally at Stage 2. But a full buyout that leaves no interest behind for existing Zanaga shareholders, there I could see a rationale for basing negotiations on Stage 2 NPV.
ii. Are we in a competitive situation, with potentially two or more entities engaged in a de-facto bidding contest (a scenario that obviously requires time & patience to see through to the end), which could drive an eventual deal towards a minimal discount to NPV, so maybe a lot less than 30%?
When valuing a development mining project, the Net Present Value (NPV) is a crucial metric. However, a potential buyer will usually seek to purchase the project at a discount to the calculated NPV. This discount accounts for various risks and uncertainties associated with the project, such as commodity price volatility, operational risks, permitting and regulatory hurdles, and financing challenges.
The typical discount to the calculated NPV for a mining project can vary significantly depending on several factors including the stage of the project, the perceived risks, and the market conditions. However, general industry practice often sees discounts ranging from 20% to 50%. Here are some more detailed considerations:
Early-Stage Exploration Projects: These projects are highly speculative and carry significant risk. Discounts here can be on the higher end, sometimes exceeding 50% of the NPV.
Advanced Exploration and Development Projects: Projects that have more detailed feasibility studies and some level of permitting and financing in place might see discounts in the range of 30% to 40%.
Near-Production Projects: Projects that are closer to production, with most permits in place and financing secured, typically attract lower discounts. These could range from 20% to 30%.
Producing Mines: Operating mines with proven production capabilities generally attract minimal discounts, reflecting the lower risk. The discount here might be as low as 10% to 20%.
These discounts are influenced by market sentiment, the quality of the resource, geopolitical risk, infrastructure availability, and the strategic fit of the project within the buyer's portfolio.
The thing is Ex, that Elphick was a brilliant stock salesman back in the day - he sold his projects on NPV++. The GEMD IPO was at around 1100p (now 13p been lower), ZIOC IPO at 156p now 6.6p (& the IPO was sold primarily to mining funds who thought they knew what they were doing). In his day he was clearly a brilliant salesman/negotiator we just need him to pull that magic off one more time.
I'm sure Elphick isn't short of a bob or two, but his other public investment, GEMD. has experienced a similar shareprice trajectory.
You may not be able to take it with you, but it's nice to have it to enjoy for a while beforehand!
GLA
Interesting you say that Mitch/Shrewd because surely Elphick is in the same situ - he has sat on his big stake for 13+ years since listing and seen the share price go from 222p to 1.4p in that time & now at a majestic 6.6p. My biggest concern historically has been that Elphick/Glencore would be too pushy & greedy with potential investors but I am hoping both parties see that whatever the price on offer it's now or never. Also at least as far as Glencore is concerned they desperately need capital for all the big corporate M&A moves taking place (not least they have to pay up for their big Teck coal deal next quarter) they don't want greenfield projects so take the money & go elsewhere.
Mitch984 I sympathise, I really do!
I've spent almost my entire 50's in this damm share with zilch to show for it.
I used to be extremely bullish but the more time drags, the less hope I have left. I just want out but on my terms 😏
Https://www.mining-technology.com/projects/zanaga-project/?cf-view
"First production is expected in the third quarter of 2016..." One Day Rodders, one day ! atb
Mitch984: Our ages should have nothing to do with a fair price for our shares in ZIOC but I can only agree with you!
Except with a present NPV of 912p a takeover at 50p would be a joke!
Jiving: Agreed, we don't get to choose the deal price but one takeover offer should unleash at least one more! And if it's a lot higher then Elphick/GLEN can hardly refuse it! Also: both parties are supposed to act in the interests of ALL shareholders and you would think their interests are aligned with ours but WTFDIK?
Unfortunately we dont get to choose the deal price, its entirely in the hands of Elphick/Glencore. The fact they have basically, it seems, delayed everything by almost a year to get the new +80% 2024 FS, strongly suggests to me they are going to negotiate a buy-in or buyout around those 2024 FS NPV figures. We must assume at some kind of discount but what: 25%, 50%? And which NPV - 12m or 30m or an average?
Just for comparison, 50p is just over $400m NPV. The IPO back in Nov 2010 @ 156p = NPV of $1400m, which at todays FX & share count would be around 172p a share.