Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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.."this does mean that the QIA could be on both sides of a deal. Convulted? Who knows?!.."
Totally agree! AIUI, many of the Qatari Royal family hold British passports ('to be sure, to be sure') and of course have extensive sponsorship of horseracing, bothin the UK (Ascot, Goodwood) and France (Arc de Triomphe).
See also their 'honest broker' role in the merger/takeover GLEN/Xstrata, here
https://www.theguardian.com/news/2022/nov/15/sheikh-world-cup-qatar-uk-links-decades-hamad-bin-jassim-bin-jaber-al-thani?ref=biztoc.com.
Probably better to have them inside the tent, rather than...etc !
My thinking on 'Qatar' is not necessarily that they are on the Buy side of Zanaga. As Glencore's largest shareholder the QIA is also motivated to help ZIOC achieve the most advantageous - read lucrative - deal possible. That's not to say that they wouldn't welcome 4mtpa of high grade to feed their 2.5mtpa steel industry. However this does mean that the QIA could be on both sides of a deal. Convulted? Who knows?!
WRT AT, I have several colleagues who have been trying to eke out a response from him since he was last communicative back in September. Since then, nothing. I take this as further evidence that all things Zanaga are now way beyond his pay grade and being driven by the likes of SASAC, SWFs, Baosteel and other supranational interests. That being the case there would be very little that AT could or indeed should say. I've taken the view that such is the case and that it is positive to my immediate fortunes.
Not yet.
I'll leave it until Mon close of business, then ask Nomad.
Cheers
Extrader. did AT answer you on the third tranche?
Qatar is very welcome to join the party, the more potential bidders circling the better. The public release of the 2024 FS gives out all the key updated information to 'everybody' and importantly it will come to the attention not just of commercial companies (FMG, BHP, Vale), but also those countries seeking control of strategic mineral reserves: ie as well as China & the Saudis, key players like Japan & maybe India as well.
So who - crucially - likely already has all or some of the details of the 2024 FS ahead of their formal publication. No 1 of course the Chinese - they are solely responsible for producing the entire updated EPC. They also have all the details & background on the power solution, hence the CMEC MOU. The 2019 framework agreement with COIDIC also covered port development at Pointe Noire, so they are likely fully versed in all the details of that as well. I note the port MOU remains unannounced even though AD Ports has been an obvious candidate now for many months - leaving that role open for other parties?
Given we have clearly been in detailed discussions with the Saudis it seems likely they are also aware of most of the key details & thus the financial implications for NPV & IRR. There may well be others, advanced knowledge allows for due diligence to be undertaken & bidding parameters to be calculated; in advance of non-insiders. The hope must be that one of the insiders will use that advantage to make a pre-emptive move prior to public FS release - perhaps they already have.
Qatar might well want to needle Saudi, but a feint is more likely than a serious counter-punch, IMO :
- Qatar already has strained relationships with the rest of the GCC, only now recovering from an outright trade embargo;
- it is home to Al Jazeera, which is a thorn in MBS's side and currently host to most of Hamas's leadership; it backs the Muslim Brotherhood, which is proscribed as a terrorist organisation by the rest of the GCC, etc etc;
- it has a 'complicated' relationship with Iran, with whom it shares the North Dome/South Pars gasfield on which its economy depends; it hosts the US forces at Al Udeid airbase, but conspicuously took no (acknowledged, tbf) part in the recent defence of Israel, unlike the UAE and Saudi; now is hardly the time to be ruffling feathers.
- it and the UAE are on opposite sides in the ongoing Libyan conflict(s);
- it has minimal iron ore expansion plans of its own, given geographic size and better investments/ employment prospects elsewhere for its indigenous population of about 350K, roughly 10% of the total population. Its biggest steel investment AIUI is a 25% stake in Foulath, Bahrain.
Having said all the above, it might suit Qatar ( GLEN's largest shareholder, as you rightly point out) to go through the motions, if only to encourage someone else to pay more for ZIOC than they otherwise might.
Truly 'win-win', from Qatar's PoV ! And presumably therefore - albeit in a smaller way - our own.
Bring it on!
AFAICS
AT's head is well beneath the parapet - under orders I'm sure.
As to Qatar, there have been shuttlings between London, Doha and Brazzaville ...
With the QIA being Glencore's largest shareholder, and after they were beaten to the VBM prize by the PIF, might Zanaga be their counterpunch?
.."The key takeaway is that they haven't taken Tranche 3 .."
That's my assumption also, but you know what they say about 'assume'....and I was hoping that - apart from confirming this was the case - AT's reply might be a bit more informative.
As would your sharing the Qatari tidbit that you've teased twice now ;->
GLA & ATB
Strictly speaking on Tranche 3, here's the clause from July 23:
Solely at the discretion of the Company, a third tranche of up to 12 million Subscription Shares will be subscribed for by SMC (the "Third Tranche" and together with the First Tranche and the Second Tranche, each a "Tranche"). Any such subscription will take place within 14 trading days of the earlier of: (a) the date on which SMC has sold all the Subscription Shares subscribed for in the Second Tranche; or (b) such other date as SMC and the Company agree.
'....or (b) such other date as SMC and the Company agree.'
So (a) is redundant and (b) says they can take it whenever the Company like.
The key takeaway is that they haven't taken Tranche 3 and, furthermore, that the loan is rolled until 31st July. This must imply that all concerned, NomAd included, are confident of developments in the meantime.
All sentiment aside,
It would be a hell of a thing to pull off a fully backed RI without a discount in these current markets!!
Now I know Zioc is “not the same as all the other shares on AIM, but just saying.
Anyway I hope I’m 100% wrong and we get financed at close to NPV.
I will leave it there, and wish all of us Good luck.
Hi Jiving,
I thought of copying the Nomad in straightaway, but decided to do a follow-up only if necessary, to give AT an opportunity to take charge of the narrative (if he is able/interested).
ATB
Extrader - good points partic No 3. If AT wont provide an answer on Tranche 3, perhaps we need to approach the Nomad?
Elphick is Mr NPV - the guy who put the NPV clause in the original deal with Xstrata. It is unimaginable the thought of him launching a vast RI when the shares are below 2% of NPV. Remember he has hung on to his stake through thick & thin watching the share price go from an IPO of 156p to a high of 222p & eventually a low around 1.4p.
Everything we have witnessed in the last 18 months is about attempting to realise an NPV related outcome: be it a minority buy-in of say 20-40% or a full 100% buyout of ZIOC. I am increasingly sceptical about the whole go-it-alone plan led by the Mysterious Marty, it just doesn't seem realistic to me for a project of this scale to be managed as a start-up. My hunch is it has essentially been a ploy to prompt a full buyout offer from the Chinese, at a price based on the NPV to be revealed in our new 2024 FS. If there is a genuine competitive situation in play hopefully we get a buyout close to NPV, if there is only one serious buyer it would not surprise me if we ended up with an offer at a discount of up to 50% of NPV. But surely anything is better than nothing (nationalisation or death by languishing dilution) or indeed the current 2%.
The public release of our new completed 2024 FS of course potentially increases the number of possible bidders to 'everybody'. This may be important, particularly if the figures are striking - I would expect IRR for example to be at least 50% above the Simandou figures released by RTZ. A serious, interested buyout bidder (think China) would IMO tactically want an Exclusivity Agreement in place before the release of the 2024 FS, in order to pre-empt other bidders coming out of the woodwork post FS publication.
I agree!!
My 10:1 dilution was a “worst case scenario”, hopefully the board will be able to utilise debt finance, at least in part. Nibj as you seem to agree..a way forward, is a way forward..and yes I would expect my potential shrunken holding, still to be worth a shi*ton!!
MM- our benevolent board were still able to increase there holdings by having taken a haircut+shares in lieu(and as you have previously pointed out, were unable to buy in the open market), so would stand to benefit in a prevailing RI, if the share price was to rocket post being fully funded (and of course the were to take up their allocation).
I also am still hopeful(hope can be very dangerous in the markets), that we can be(us PI’s) bought out for a hefty sum), but like also planning on a lesser “great deal”.
After 10+ years I will accept a tenth of ziocs true value(£3-5b), as long as I get paid before “death does me part”.
Gla.
(1) OK, MM : I'll bite. What are you seeing re Qatar?
(2) Re dilution via R/I, I reckon Elphick would fight with tooth and nail against - he has so far (but may have to concede in the end)
(3) Re (2) I've asked AT re current share nos, because ZIOC hasn't AFAICS updated to take account of Tranche 3 (which was discretionary)...and SMC is required to subscribe within 14 days of completion of Tranche 2.
AIUI.
GLA & ATB
Driving i dont think you will see this kind of dilution. but even if you did, and sit back with 0.1%, the value of a full operated mine like this with 30mt or maybe 60 mt yearly, would easily be 30 bill. so 0.1% of that is not too bad.
Driving, my friend, I really don't think that the managements and co would have taken their shares in lieu of salary, which included a 65% discount, if they were then to be diluted by a further 90%!!
ZIOC has a NPV in the many $$billions. The incoming Strategic Investors are in competition with each other, and hence it is a sellers market - that's one in our favour - implying they will have to pay us the NPV of their respective stakes. Never say never, of course, but a RI is the very last thing I expect.
Feel I need to add-
That a RI isn’t necessarily a bad thing, post the raise of let’s say £500m 10:1)(for arguments sake), I could see our market cap cantering on to the £billions.
I just imagine my 1% of the company being diluted to say 0.1%(unless I stump up my share of the funds needed to develop the mine). I still think 0.1% of the company will be worth several million post being fully funded.
Dilution is not necessary a bad thing as long as it adds value.
Gla.
Market says otherwise, but for obvious reasons I would love you to be right!
Seems a RI to fund development where all existing shareholders will be given an option to partake on equal terms(very fair/and rare), fully underwritten by the incoming strategic partners(s).
Glencore/ephlick,ect holding kept intact, PI’s who can’t raise funds will be diluted, only hope/consolation is that the RI is above existing share prices, and we who are unable to take up our Rights will be able to sell them at premium.
Only my observation.
Gla.+ I hope MM is right, and I am wrong.
From what I'm seeing that could very well be what is about to happen.
Oh Man! Hardly anyone not in contention..
Auction off the bloddy company 😜
Looks like Qatar might be in play.