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In the September 2023 update and in the November Investor Presentation the company confidently predicted an MoU with a Strategic Partner/s at the end of the March quarter.
Why and what gave them the confidence to do so?
ZIOC's BoD would not have been so presumptive as to dictate the timeframe to the likes of the Chinese, Saudis or perhaps the Emiratis et al., so I'm confident that it was the Strategic/s themselves that set or at least agreed to the timeframe.
So what might have happened to derail the announcement?
The answer to that question might well be explained by a 20th March regulatory filing to the Tadawul, and what Bob Wilt himself said in January.
Edit.
A 19th March filing, reported on the 20th.
Hands up, no blurting out. The filing is time stamped.
"We are looking overseas for interests in copper, lithium, iron-ore, and nickel," said Wilt.
https://m.miningweekly.com/print-version/saudi-maaden-has-extracted-lithium-from-seawater-ceo-says-2024-05-22
the context to the thesis seems to be here :
https://www.zawya.com/en/markets/equities/saudis-maaden-completes-10-acquisition-of-brazils-vale-base-metals-fmf9t71p
.."may 1, 2024
related topics
metals
commodities
saudi arabia
brazil
acquisition
saudi arabian mining company (ma’aden) said on wednesday it had completed the 10% acquisition of brazil’s base metals company, according to a bourse filing on the saudi stock exchange (tadawul).
ma’aden, which is majority owned by the public investment fund (pif), said its joint venture manara minerals investment company, had completed the acquisition of 10% of vale base metals limited on april 30, following a delay in regulatory approvals.
in july 2023, the company announced manara minerals had signed a binding agreement to acquire a 10% stake in vale base metals for $2.6 billion, as part of a strategy to invest in global mining assets.
...
in a bourse filing in march, ma’aden said the transaction could not be completed as scheduled, as regulatory approvals had been delayed."
you seem to be arguing that ma'aden can't chew gum and walk at the same time...ie couldn't progress zioc because it was pre-occupied with 'bigger things' ie vale base minerals. fair enough.
that might explain missing a march deadline, but 6 weeks have passed and ma'aden has since been actively reporting mainly 'bread and butter' matters on tadawul : an esop award, a change to audit committee, the calling (and then result) of an egm, the first quarter results etc .
i think ma'aden being subsequently distracted by reko dik/p4kistan is a more plausible reason for delay :
https://www.agbi.com/infrastructure/2024/04/pif-close-to-buying-****stan-copper-mine-stake/
5th april 2024
.."saudi arabia’s public investment fund is close to finalising a deal to buy a $1 billion stake in ****stan’s reko diq copper-gold mine, in what would be a saudi lifeline for the debt-ridden country, a ****stani newspaper has reported..."
especially given that these discussions have been pushed back from december last year and...as the same article reports :
.."a new government under prime minister shehbaz sharif took power in march. ."
afaics
let's hope there are no further competing claims on the saudis time.
atb
MM; hopefully you are 100% correct .
""Saudi Arabian Mining Company (Ma’aden) announces an update on the signing of its joint venture Manara Minerals Investment Company a binding agreement to acquire 10% of Vale Base Metals Limited.""
Reasons For The Delay on The Date of The Event Previously Announced....."".Regulatory requirements are being completed as usual, but due to their connection to multiple regulatory bodies in more than one country, obtaining approvals was not completed within the expected timeframe.""
As usual....alwayshoping.
Ex...you posted as I was typing...so you won by at least a length !!
nice one, alwayshoping! here's how i see it linking into our strategic partner timeline.
on july 30th 2023 ma'aden, via manara minerals, won out to buy 10% of vale's base metals unit - pending the usual regulatory steps. however, on 19th march 2024, ma'aden announced to the tadawul that, 'ma’aden is still working on completing regulatory approval and other customary conditions to complete the transaction (and that) regulatory requirements are being completed as usual, but due to their connection to multiple regulatory bodies in more than one country, obtaining approvals was not completed within the expected timeframe.'
so on 19th march, manara was still trying to complete the vbm deal.
why might this affect our strategic partner/s announcement due by the end of that quarter? well, at the fmf this january, bob wilt, manara's acting ceo, told reuters that, '"manara is evaluating a host of opportunities, post closure of the vale deal, and reko diq is one of them" - (1) effectively wilt was saying that manara wouldn't move on to the next deal until vbm closure.
so, on 19th march, manara announced that they had not met their date for vbm closure and, from wilt's words in january, could not move onto the next deal until they had done so. the vbm closure eventually happened on 28th april just gone. this would mean that any deal on zanaga could not be announced by the end of march (1q24) and, furthermore, that could not be announced by the end of april when zioc announced the feasibility study update rns.
so the end of march *and* the end of april was missed.
compounding matters, at the start of may the saudis dispatched a large team, including manara minerals, to pak'istan to work on the reko diq copper/gold project and a host of saudi-pak'istan matters. 'executives from saudi arabian mining company manara minerals are in islamabad to continue talks about buying a stake in ****stan’s reko diq gold and copper project, a ****stan government document showed on monday.' - (2) i venture this meant that zanaga had missed their end of march (and april) slot in manara's calendar, before manara's corporate bandwidth was deployed in early may onto reko diq.
rewinding to the original mm-vale deal at the end of july 23 and a possible 6 month closure, i think this informed zioc's bod that a zanaga deal could be pencilled in for the end of march 24, 1q24. accordingly in the september 2023 update zioc projected an end1q24 date for a strategic partner announcement.
it all fits, suggesting a deal on zanaga could be next in line following an agreement on reko diq.
(note : at this point savvy readers will extend this theory into what happened to t3).
(1) https://www.reuters.com/markets/commodities/saudi-arabias-manara-minerals-fund-plans-metals-trading-arm-2024-01-11/
(2) https://www.mining.com/web/saudi-manara-minerals-team-in-****stan-for-talks-on-reko-diq-mine-stake-document-shows
Nice one, alwayshoping! here's how i see it linking into our strategic partner timeline.
On July 30th 2023 Ma'aden, via Manara Minerals, won out to buy 10% of Vale's base metals unit - pending the usual regulatory steps. However, on 19th March 2024, Ma'aden announced to the Tadawul that, 'Ma’aden is still working on completing regulatory approval and other customary conditions to complete the transaction (and that) regulatory requirements are being completed as usual, but due to their connection to multiple regulatory bodies in more than one country, obtaining approvals was not completed within the expected timeframe.'
So on 19th March, Manara was still trying to complete the VBM deal.
Why might this affect our strategic partner/s announcement due by the end of that quarter? At the FMF this January, Bob Wilt, Manara's acting CEO, told Reuters that, '"Manara is evaluating a host of opportunities, post closure of the Vale deal, and Reko Diq is one of them" - (1) effectively Wilt was saying that Manara wouldn't move on to the next deal until after VBM closure.
So, on 19th March, Manara announced that they had not met their date for VBM closure and, from Wilt's words in January, could not move onto the next deal until they had done so. The VBM closure eventually happened on 28th April just gone. This would mean that any deal on Zanaga could not be announced by the end of March (1Q24) and, furthermore, that could not be announced by the end of April when ZIOC announced the Feasibility Study update RNS.
So the end of March *and* the end of April was missed.
Compounding matters, at the start of May the Saudis dispatched a large team, including Manara Minerals, to P'ak'istan to work on the Reko Diq copper/gold project and a host of Saudi-P'ak'istan matters. 'Executives from Saudi Arabian mining company Manara Minerals are in Islamabad to continue talks about buying a stake in P'ak'istan’s Reko Diq gold and copper project, a P'ak'istan government document showed on Monday.' - (2) I venture this meant that Zanaga had missed their end of March (and April) slot in Manara's calendar, before Manara's corporate bandwidth was deployed in early May onto Reko Diq .
Rewinding to the original MM-Vale deal at the end of July 23 and a possible 6 month closure, I think this informed ZIOC's BOD's that a Zanaga deal could be pencilled in for the end of March 24, 1Q24. Accordingly in the September 2023 update ZIOC projected an end 1Q24 date for a Strategic Partner announcement.
It all fits, suggesting a deal on Zanaga could be next in line following an agreement on Reko Diq.
(Note : at this point savvy readers will extend this theory into what happened to T3).
(1) https://www.reuters.com/markets/commodities/saudi-arabias-manara-minerals-fund-plans-metals-trading-arm-2024-01-11/
(2) https://www.mining.com/web/saudi-manara-minerals-team-in-****stan-for-talks-on-reko-diq-mine-stake-document-shows
Here's what I think happened to T3, working off the Manara Minerals hypothesis:
ZIOC expected (were promised?) an end 1Q24 announcement on the Strategic Partner/s. However Manara's VBM slippage scuppered that.
At the end 1Q24, ZIOC announced the completion of T2, but noticeably did not issue T3 which ostensibly is the company's only existing funding mechanism for overheads and the Glencore loan, now due 31st July.
Why not, and perhaps significantly, why did Glencore and the NomAd not insist that T3 was issued?
I venture the answer is because ZIOC had the Strategic Partner in the bag for the end of March before events intervened. Furthermore that T3 had already been allocated as part of the Strategic Partner deal. 12m shares at 7p would cover the loan and then some.
This is all speculation, of course, but if accurate then ZIOC are currently soft pedalling while waiting for schedules to align.
Thanks MM, interesting to hear your thoughts on Tranche 3.
My take on the 3rd tranche not being issued is Highly positive,
I don’t share jiving concerns on the matter of the loan repayment scheduled to be repaid by 31st July, as the loan can be extended(as evidenced twice previously).
But that the “going concern” caveat will need to be embodied in the annual results due 1st week in july(at the latest), coupled with the obvious increased cooperate cost(I’m sure Marty ain’t working for nothing/will be interesting to see what his pay packet looks like) I would imagine would be of some concern to the board(as we are running on fumes(£400k max)…unless of course there was a plan in place that would need to be executed in the next 6 weeks!
We really haven’t got long to wait..
My previous concerns of a potential RI have been made redundant by my recent communication with the company, and the share price action/lack of PR(necessary to promote such a fund raise), not to forget the obvious lapsed time, and impending
deadlines.
Gla.
I’m still leaning towards a compete buyout/takeover.
Hi Driving,
Thanks for this!
I've yet to speak to AT, have put a request in.
One of my planned Q's was, is there likely to be a presentation - as others have suggested there might be - with him or Marty?
Your rights issue relief comment would suggest no need...but if there's a (further) unexpected delay (as plausibly argued there may already have been)... then the 'going concern' issue might yet need addressing (via Tranche 3), despite what we all hope.
In which case, the need for PR (and the likelihood of a presentation) would be higher....
Any thoughts you can share?
TIA and ATB
I also see the slippage of the strategic partner MOU end Q1, as being due to external factors but that could also be due to other bidders entering the field thus complicating the process. Something that is positive for us, the whole FS was tilted towards China, they have the power MOU & they could certainly do with (all) the ore. We simply don't know the cause of the delay or indeed whether the end Q1 target date was specifically designed to draw out bidders by signalling the end game.
As we approach June we are certainly running on fumes, three ways out: T3 ; an investor announcement; or use some of the headroom they have on the loan ($1.8m facility but just over $736k outstanding). Per Driving the loan has indeed been extended twice, but each time that was accompanied by a substantial repayment - $463k by end December & then another $700k by end March, leaving a balance of only $736k currently outstanding.
Indeed I estimate approx 55% of T1 & T2 went on repaying the loan, which is odd as of course that means it was repaid via dilution which affects Glencore's stake. The pattern of the two prior extensions was substantial repayment coupled with extension, such that only $736k is outstanding, an amount similar to the last repayment. I would hope if we are in the final stages of a bidding or haggling contest, Glencore are reasonable & cut us some slack; but whatever 'something' has to happen in the next few weeks regarding company finance.
I remember all the optimism we shared this time last year - which was also then (unlike now) reflected in the share price. With hindsight it's now clear we have been delayed around a year, by the production of the 2024 FS, but with the resulting NPVs being set some 80% higher our hope must be that is reflected in the final price. I also share Drivings take that the end result is now more likely a buyout rather than a buy-in, but at the end of the day I will be happy with either.
Ex-
My opinion(and only that) is that “ It’s all about timing”.
There is a reason that Glencore(Xstrata)where originally attracted to zanaga, and we have remained part of their asset portfolio since(surviving CEO’s, and asset de-risking ect).
I will attempt to list some of the major obstacles to our development these long years-
* lack of infrastructure(no rail/port).
* Negative PR of developing an iron ore mine in/adjacent to a nature reserve.
* Iron ore mining is dirty/non eco friendly.
* Over supply of iron ore/lack of demand(outside of China)
* Unfavourable pricing(excluding unsustainable spikes)
These obstacles are abating rapidly-
* slurry pipe alternative to rail/ AD ports concession.
* The new net zero carbon agenda trumping the negatives of developing new large scale iron ore mines-GREEN STEEL.
* Alongside simandou, a new mining frontier being opened to the world(west Africa).
* Countries competing to achieve net zero by transitioning to Green steel, as well as the rearming/reconstructing of the west.
* A evident and fast developing disconnect between the low grade(Aussie rust),and the sought after high premium attaching high grade iron ore(which we are blessed with).
Glencore did not give up a controlling stake (50%+1 share) in zanaga for the offtake, unless they believed there to be something for them to offtake!
They in truth funded the updated costings by loaning us the monies, and then allowing us to repay them through the issuance of new shares to repay them(and in turn diluting their holding).
It is my belief that Glencore are ready to make their move, and they are(and have always been the primary driver) for zanaga to be developed.
As to the slight time slip, it is in my opinion due solely to the port partnership(MOU)(which is not in our boards control).
The primary reason we have remained undeveloped(comatose)for the last decade(plus), has been due to no viable means of us bringing our product to the market. The costings update has given us the method(slurry pipe) to deliver our ore to a domestic port(we were never going to be allowed to ship through neighbouring countries(Guinea), we just need the new AD port to be(gin) construction(be built)…which the board seems to believe is imminent(as per my previous post).
Gla.
Thanks for this, Driving,
Do you believe we may see these points covered in a presentation, or are we past that point, in your view ?
Not putting you on the spot, honest, guv !
ATB
* I'm a scouser originally, so barely 40m from Abergele. A lot further away currently...but willing to travel!
Yesterday I posted my view that ZIOC's Strategic Partner announcement was delayed, firstly from Manara Minerals-VBM run over, and then because Manara Minerals moved onto to Reko Diq in early May. My working hypothesis is that MM will return to Zanaga when Reko Diq is closed.
With that in mind I read this tweet form a few minutes ago:
8:44 AM · May 24, 2024
P'ak'istan and Saudi Arabia have reached a tentative agreement to sell Islamabad’s 15% shares in the Reko Diq project to Saudi investors, reports The News. This decision comes after Barrick Gold Corporation declined to sell its stakes in the multibillion-dollar project.
https://x.com/pk_economy/status/1793895802697359603
Breaking stuff:
CENTRE TO SELL 15PC STAKE IN REKO DIQ PROJECT TO SAUDI ARABIA
P'ak'istan’s overall shares in the Reko-Diq project are expected to be reduced from the existing 50pc to 35pc
Two top functionaries confirmed to The News on Thursday that the much-awaited development had achieved a breakthrough and a formal announcement was expected anytime within the next few weeks. “Saudi Arabia will be involved in the Reko Diq project and they intend to increase their stakes in more blocks of the Reko Diq in future,” official sources told The News on Thursday. With the help of the Special Investment Facilitation Council (SIFC), a consultant was hired, who submitted its valuation report that paved the way for selling out stakes in the Reko Diq project.
The signing of the Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC) would play a critical role, as the Bilateral Investment Treaty (BIT) is one of its components under which Islamabad had provided the right of international arbitration. “The federal cabinet, during the tenure of the caretaker government, had approved and ratified the FTA and BIT with the GCC and now awaits their ratification for signing it,” said the official, adding that Chief of Army Staff General Asim Munir had recently visited Saudi Arabia and then a Saudi minister also visited P'ak'istan. Therefore, such high-level interactions helped push these multibillion-dollar investments.
Under the ratification of FTA and part of it in the shape of BIT, P'ak'istan accepted demands for allowing to approach the Permanent Court of Arbitration (PCA) or International Centre for Settlement of Investment Disputes (ICSID) in case of any disputes on multibillion-dollar investment projects.
Saudi Arabia and P'ak'istan negotiated finalisation of the term sheet and valuation. THE MANARA MINERALS INVESTMENT COMPANY IS A NEW VENTURE BETWEEN THE SAUDI ARABIAN MINING COMPANY (MA’ADEN) AND THE PUBLIC INVESTMENT FUND (PIF) TO INVEST IN MINING ASSETS GLOBALLY AND SUPPORT THE DEVELOPMENT OF RESILIENT GLOBAL SUPPLY CHAINS. The Reko Diq Mining Company (RMDC) has been assigned to hire levies and payment mechanisms defined for Balochistan.
https://www.thenews.com.pk/print/1192453-centre-to-sell-15pc-stake-in-reko-diq-project-to-saudi-arabia
Thanks MM, brilliant stuff 👏
So what would 15% be worth at this stage ?
We now have a yardstick.
aimo & dyor
Mm- I seriously don’t know how you find the energy to post so much, but highly appreciate the info/opinions you share.
There are 3 stumbling blocks to any potential new strategic partners buying in/out IMO(although not unsurmountable)-
1/ The off-take
2/ Glencores 44.39% holding.
3/ The pricing difference between the NAV & the current share price(99%+!!)
1-As you have recently mentioned there is a clause that would allow for a renegotiation of the off-take if the companies share structure were to significantly change, I believe Glencore value the off-take above all else, and would therefore be adverse to giving any of their secured off-take.
2-As above Glencores holding underpins their off-take, as well as giving them a large say in any potential buyout/in.
3-Any incoming strategic investor will point out our public listed valuation in their negotiations, and although hopefully the updated NAV will provide the highest weighting, the current market cap will be a factor.
The updated costings were AMAZING,
Providing 26.2% ROR(stage 1) & a whooping 28.2% ROR(stage 2).
Glencore would be mad not to at the least Revisit their decision not to advance this project!, it trumps almost anything in their portfolio.
And here’s the thing, all the above stumbling blocks would not apply to them.
As my previous post Glencore have always held all the trump cards, and thus it has always been about when they felt the time was right to develop zanaga…That time is NOW.
Gla.
Ps(ex) this whole process(restructuring/updated costings/port partners) was never done with the consideration of us(PI’s).
So yes well are well & truly past presentation point IMV.
Gla.
Little Den is off to Brazil, could Manara/Vale/Zanaga be on his agenda ?
Brazzaville, May 24 (ACI) - The Minister of International Cooperation and the Promotion of Public-Private Partnership, Mr. Denis Christel Sassou Nguesso and the Brazilian Ambassador to Congo, Mr. Renato Soares Menezes, exchanged on May 23 May in Brazzaville, on the agenda of the official working visit of the Congolese minister to Brazil.
Scheduled for early June, this visit will allow the Congolese minister to hold several strategic meetings in order to strengthen bilateral relations and promote new cooperation initiatives between the two countries.
Vet-excellent spot!
Vale will definitely be involved IMO.
Gla.
Indeed, V10, Little D announced his Brazil trip on his twitter account yesterday. I have been looking around trying to make the 'Vale' connection but so far without success.
On May 23, I received HE Renato Soares Menezes, Brazilian Ambassador to Congo, who conveyed to me the invitation from the Brazilian authorities for a working visit which is part of our common desire to strengthen and diversify our bilateral cooperation.
On the program: interviews with the Brazilian Minister of Foreign Affairs, as well as with the head of the Brazilian cooperation agency. This will be an opportunity to identify new areas of partnership together and to give new impetus to our relations.
I will also meet the managers of Embrapa, a Brazilian company specializing in the agricultural sector. Agriculture is a key area for the development of our country, and I am convinced that Brazilian expertise can be very beneficial to us.
https://x.com/ChristelSassou/status/1793746672901878057