Zanaga Iron Ore Company Limited Share Chat (ZIOC.GB.PL)

If after all this we are only left with a DSO, it would be desperately sad..

While most of us would prefer a blockbuster buy out so we can count our winnings, the EPP could well be an intermediate step that bypasses a number of issues: finances primarily however it would also allow an incoming Strategic/Consortium to feel their way into doing business with Brazzaville.

In various releases the company have detailed 1mtpa+ of DSO for up to 7 years. Direct Shipping Ore is great stuff. It does what it says on the tin; at surface (just needs a JCB and screening), transport to coast and shipping. Thereafter it is of the size and quality that it can be heaved straight into existing blast furnaces. As such it trades at roughly the same price as 65%Fe fines, or c.$125-130 at present. If we say $50/t cost at quayside and $15/t to ship to Europe then we arrive at a very tasty $60/t on that 1mtpa.

CapEx is a likely $10m, some of which could come from development finance if not wholly financed by an off-taker.

The point is that ZIOC could clear $50m pa whilst the staged project is being built out. This would mitigate all manner of risks and concerns. The BoD must be considering it.

https://www.zanagairon.com/wp-content/uploads/2023/11/Zanaga-Investor-Presentation-1-Nov-2023-1.pdf

Nothing more than official notification of Glencores current % holdings after last weeks shenanigans.

Nobody spotted todays RNS ???

>>"Dubai > Brazzaville > Pointe Noire > Brazzaville > Libreville > Luanda?

EPP export options? AD Ports and Vale?.."

Neither, AFAICS.

EPP first :

Cross-border > Gabon has become, if anything, more problematic since ouster last year of Big Den's relative-by-marriage and fellow Freemason Grandmaster Ali Bongo; rail capacity Franceville> Libreville/Owendo is limited and freight capacity expansion underway 12mtpa > 19mtpa will likely be taken up by Bakiama's initial 5mtpa target. The trucking of iron ore Zanaga to Franceville is also 'challenging'. Apart from manganese, its freight also includes uranium, iron ore and TIMBER.

Vale may be agnostic, but AD Ports will be interested in a Congo/Pointe Noire solution.

Re flts : Given the above, the relevance of destinations Libreville and Luanda to your speculation re Vale/AD Ports discussions and a ZIOC context is hard to see.

HB-IIW appears to have sat around in AbuDhabi since 2nd July and PP-FCC (owned by Asperbras, the known timber trader) HAS been shuttling between Brazzaville, Libreville and Franceville, but left for Cascais today.

Asperbras, of course, itself has a presence in Luanda -from whence it funnelled funds to Lula's election campaign - and where (true to form ?)- it's been accused of double-invoicing /over-charging on bus-supply contracts .

https://angola24horas.com/politica/item/8398-governo-compra-3-000-autocarros-escolares-com-suspeita-de-superfaturamento

Maybe Asperbras is also the owner of your mystery jet....and further speculation is idle ?

Ho hum

On the other hand:

The company are now debt free and have cash in hand for 6 months+. That's more than enough to see us good until FEED is financed, and FEED itself is due to start round about the end of September.

Plus, PIs can now buy where Glencore and Elphick did which I figure gets them off the hook for when the SP rockets on finance news.

I'm very chilled...

They are full of s. I don't think you can quote anything the company has said with much faith. Shares are a write off imo.

Recall that ZIOC have been majoring on Congo for the EPP, very likely for political reasons:

· Early Production Project ("EPP Project" or "EPP") remains under investigation

o Multiple production scenarios remain under investigation on processing facilities and suitable logistics solutions, with a focus on an export solution through the Republic of Congo ("RoC").

> However previously the company had a preference for the Gabonese route, i.e. JCB and sift, truck to Franceville, and then rail to Libreville. I don't think such sensitivities would apply to the likes of Vale in a JV with AD Ports.

https://www.lse.co.uk/rns/ZIOC/zioc-2023-annual-results-announcement-ttfiqmzkg6vd8ax.html

Dubai > Brazzaville > Pointe Noire > Brazzaville > Libreville > Luanda?

EPP export options? AD Ports and Vale?

Some interesting 'compare and contrast' info re the above, which seems to be at a similar inflexion point to ZIOC , but pursuing more of a go-it-alone strategy, made possible by low capex/low -tech approach.

It's close to the Franceville railhead and available 'green' hydropower, has reasonably high quality ore, target production of 5mtpa and 4 x short-life offtake MoUs with Chinese co's, including Bao Wu.

Also : a USD 10M royalty agreement with Anglo American and some interesting economics, including a claimed 38% IRR...

https://www.genmingroup.com/investors/presentations/

and

https://wcsecure.weblink.com.au/pdf/GEN/02770418.pdf

Its principal backer to-date has been Tembo Capital, an ESG-themed private equity company, see

https://tembocapital.com/about-tembo-capital/

and

https://naturalresourcesforum.com/companies/tembocapital/

This earlier presentation has some useful maps that show the various mines in the area, including the disputed Mbalam-Nabeba/Avima to the North and stretching to Zanaga to the South.

https://www.genmingroup.com/mining/baniaka/

Some 'light reading' for the weekend...

ATB

Expected patronising response!

You're straying a bit from base, aren't you beardozer ?

I'm with atg

.."Info hungry Investors having a good time shooting the breeze while awaiting real news and developments...".

HTH

What's wrong with PI's being "typically like children: irritable and quarrelsome"? extrader and MM may be happy to play ping-pong for eternity but some of us have had more than enough! All we want is shareholder value - why is that so difficult?

Hi MM,

I get to the same ultimate conclusion , but think it's a bit more nuanced than you suggest :

(1) .."Given the loan position at the end of last month, Glencore were in a position to stifle such terms.."

How exactly ? Any attempt to strong-arm ZIOC would be seriously disruptive and undermine the ' we're in lock-step/not calling the shots' thesis that has got us/them this far, surely?

Topically, we've seen in the UK election results how counterproductive the Reform/Tory fall-out has been to their supposedly overall shared views.

GLEN would be shooting itself in the foot, similarly, IMO.

(2).."the off take issue remains. The solution to that is to *potentially* buy Zanaga entirely (as per the 'This is Money' article). Doing this would mean that Glencore, under the terms of the November 2022 restructuring, would reduce to a simple royalty and not an off take - (see next post for details).."

The Gulf Consortium (in your example) doesn't have to buy ZIOC ENTIRELY, it's enough if it buys 50% +1. It can LATER bring in others, to do the 'heavy lifting'. Which it needs to, lacking the skill-sets.

AD Ports committed $ 500M + for what seems - with hindsight - to have been a 'placeholder' re the port aspect.

I think we could well see another 'placeholder' INTERIM arrangement - that would move the Project forward, with the GC having picked up a few useful trading cards (maybe FEED?) in the process.

What the sections you've quoted do is say :

- if you (Strategic Investor/SI) want access to offtake, you have to buy 50% +1 of ZIOC/MPD : 20 to 30% won't cut it;

- if you DO buy 50% + 1, you get the prize of access to 100% of offtake [not just prorata to your shareholding] but this is CONDITIONAL because GLEN has right of last refusal (ROLR) to new marketing terms;

- GLEN either matches SI new marketing terms (and GLEN retains 100% offtake) or - if new terms are uncommercial or disruptive (from GLEN's ore-trading pov) - it doesn't, in which case SI gets the prize of 100% offtake;

- in the latter case, GLEN gets the 'consolation prize' of an unquantified Royalty ('to be agreed') for life-of-mine.

Bottom-line message to SI(s) :

- if offtake [of our premium product] is important to you, you have to acquire a controlling interest in the concession-holder, anything less gives you no say;

- we [GLEN] still have a say in marketing rights PRICING for as long as it suits our overall ore trading book/strategy;

- if it doesn't and we don't match new terms, there's a variable in place for off-setting that discreetly. Others needn't know.

Bottom line : Carrot and stick - 'Offers invited, terms negotiable'.

Leaving for another day WHO exactly gets the mine to production.....but *potentially* leaving out GLEN (who doesn't like greenfield) and ZIOC (who - apart from IP - bring little/nothing to the table, apart from fractious PI's [joke!]).

PS You can commit to finance the FEED , as 'earnest money'

All AFAIC

Here are the relevant clauses from the November 2022 acquisition from Glencore.

(m) If there is a direct or indirect change in ownership of MPD amounting to 50% + 1 share or more of the issued share capital of the relevant target entity, and, following such change in ownership, MPD notifies Glencore International in accordance with the terms of the Marketing Agreement that it wishes to cancel the Marketing Agreement and enter into a new life-of-mine marketing agreement (a "New Marketing Agreement") in respect of 100% of the production of the Mine with the relevant investor or its Affiliate (a "New Buyer"), then Glencore International may notify MPD, subject to the terms and requirements of the Marketing Agreement, that either:

(i) it shall match the terms of the New Marketing Agreement, in which event the parties shall discuss and agree in good faith such minimum amendments required to the Marketing Agreement to align with the key commercial terms agreed between MPD and the New Buyer under the New Marketing Agreement; or

(ii) it agrees to the termination of the Marketing Agreement, in which event the Marketing Agreement shall be terminated upon execution by MPD of the New Marketing Agreement and thereafter Glencore International shall be entitled, for the term of the New Marketing Agreement and / or any replacement or supplement to such agreement, to receive a fee in each calendar month by way of consideration for the initial marketing role played by Glencore International under the Marketing Agreement ("Royalty"), and the Marketing Agreement shall be terminated only upon execution of the Royalty by Glencore International and MPD in a form acceptable to Glencore International acting reasonably.

https://www.lse.co.uk/rns/ZIOC/acquisition-of-100-of-zanaga-iron-ore-project-b1vcll71qsaa4z6.html

This is the post Nov 2022 timeline and sensitivities as I understand it, from 3 insights gained over the intervening period.

This Monday's fund raise was just that, of course. However the BoD were also dealing with 2 other compelling drivers. The first driver was the imperative from the Strategics to get on a do a deal on FEED **this month**. Thus the speed of the raise. (note: The share subscription was completed before Monday's opening at 8:00am, despite the Glencore loan not being due until the end of this month, July 31st.). The second driver was to reposition the Company back to the status quo ante that was arrived at in November 2022 - chiefly that ZIOC had full executive control of the Project. With the loan outstanding Glencore once again controlled the purse strings and hence were in a position to dictate terms. This position was expressly against the wishes of the Strategics.

Rewind to November 2022 when ZIOC gained control of Zanaga. This was at the instigation of 'Strategics' and I venture strongly that it was a Gulf consortium. Consider the company's words at the time: "The acquisition of Glencore Projects' shareholding in the Project is a key milestone for ZIOC's shareholders, demonstrating to third party investors that the Project is now represented by a single entity and management strategy.." ...new strategic investors are required to enable the development and construction of the Project... The acquisition of Glencore Projects' interest in Jumelles simply enables the Company to have more direct control over the Project and a simplified ownership structure which should assist in attracting funding.'

https://www.lse.co.uk/rns/ZIOC/acquisition-of-100-of-zanaga-iron-ore-project-b1vcll71qsaa4z6.html

Fast forward through 2023. September saw the company project an end 1Q24 date for a deal, and in October the management took shares in lieu of salary and with a 65% discount. However there were then several bumps in the road. During the FMF in Riyadh in January, Manara Minerals' CEO Bob Wilt wanted to trade off take surplus from their investments, putting them squarely at odds with the off take agreement on Zanaga agreed with Glencore for the Nov 2022 deal. Later the Gulf Consortium were unable to meet the end March deadline (see Ma'aden, MM and the VBM closure delay), and they lost their exclusive.

Now the Gulf Consortium is in competition with multiple other parties, however the off take issue remains. The solution to that is to *potentially* buy Zanaga entirely (as per the 'This is Money' article). Doing this would mean that Glencore, under the terms of the November 2022 restructuring, would reduce to a simple royalty and not an off take - (see next post for details). Problem solved.

Given the loan position at the end of last month, Glencore were in a position to stifle such terms. With the loan repaid and with operational cash in the bank, now they're not.

It's deal time.

Cheers everyone 🥂🍻

Very droll - but, like the neglected Congolese national team- you've rather missed the target.

The relevance of success at football - and sport in general - to nation-building is one that many people (not including Big Den, it would seem) can see.

Read about 'Wir sind wieder wer', the Battle of Bern, when Germany unexpectedly beat the Hungarians :

https://www.theringer.com/soccer/2018/7/13/17568582/world-cup-most-important-game-1954-final-hungary-west-germany

Or, if that's too far back for you, think of England '66, which folk still talk of today [ Well, there hasn't been much to talk of since, tbf].

You may not 'get' it, but I'm sure MK does. As would MBS and PIF Governor Al-Rayyan

https://www.sportingnews.com/us/golf/news/pif-golf-saudi-arabia-investment-fund-liv-pga-tour-merger/x3libd6so12qfj0mg7toi185

Pssst! I think this should have come from the Eddsy account, no?

Shome mishtake, surely.....

HTH ...and 'Lighten up, man !'

ATB

Some Congolese football scores:

Standings

Cara Brazzaville 0 - 0 AS Cheminots.

Cara Brazzaville 1 - 3 JS Talangai.

AS Vegas 0 - 0 Cara Brazzaville.

Inter Club de Brazzaville 1 - 0 Cara Brazzaville.

AS Jeunesse Unie de Kintélé 2 - 1 Cara Brazzaville.

AC Léopards de Dolisie 1 - 0 Cara Brazzaville.

Diables Noirs 0 - 0 Cara Brazzaville.

Occam's razor :

(1) ZIOC was always going to have to address the GLEN loan status/repayment plan by A/R results date, to avoid 'going concern issues'.

(2) A new SCM plan was needed and already under preparation. SCM wouldn't have accepted subscriptions 'uncovered'.

(3) Marty ignored/wasn't aware of the 30 day 'closed period' rule . Hence the speeding ticket (hat tip 99icecream0

(4) Elphick and GLEN took advantage of the drop, but also to get closer to the other staff /insider subscription prices (hat-tip Jiving) . Shows they're both invested 'in lockstep' AND - because they've traded - that there's nothing settled _ an important signal to any bidders.

(5) SCM placed the 14.4m with other favoured parties, likely Elphick's mates/founder investors. Alwayshoping has helpfully confirmed his impression , as 'mystery shopper' of the SCM stance :

..."RE: I think the shard facility is a backdoor entry7 Jul 2023 12:16

I think the fact that I have not even received an acknowledgement of my enquiry re the procedure of acquiring any of these shares from Shard says it all. They would have no idea whether or not I was interested in 10 shares or ten million shares. Not even a "sorry, we are unable to assist you with this matter etc" SUSPECT THE RECIPIENTS ARE ALREADY SORTED...."

(6) GLEN / ZIOC signalled to the market (MM's quotes) back in late 2022 that GLEN had a max goal of offtake BUT a consolation prize of royalty. So Saudi knew the position then.

(7) They may already have known of Ma'adens offtake expectations by then, certainly not in doubt once Ma'aden' s core objectives were in print.

(8) The Saudis thought they were the only game in town, so played hard-ball in Riyadh...thinking they'd wait GLEN/ZIOC out. They want lots of offtake but would (realistically ?) settle for pro-rata. They defo don't want to be subordinate to GLEN.

(9) Then negos stalled, maybe over VBM closure delay (but at tying up loose ends stage by then, surely ? more likely Reko Diq, IMO, doesn't matter), maybe 'other world events'...

(10) Decks are cleared for a 'level-playing field' round of bids and - speculation- a 'green light' re ZIOC's finances and viability to tickbox whoever gave MK confidence that FEED finance was imminent.

Hat-tip to all contributors , comments invited.

ATB

Dont touch with a bargepole. simples

Lol, you are funny 😂

Info hungry Investors having a good time shooting the breeze while awaiting real news and developments.

Your actions will speak volumes from here on, then.

Thanks for your well written en an interesting point of view, MM 🙂. You have many great attributes and some quite exasperating ones! 😉 But we all are actually on the same side here..

Https://www.mining.com/glencore-scraps-kazzinc-sale-on-shortage-of-bids/