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MOUs are just a contract, and can simply be enough to give a period of exclusivity to the parties whilst the real deal is negotiated. However, I suspect in this case the various parties have been in place for a while so the key terms of the deals would be already drafted. The missing details would be provided by the EPC partner (i.e. the costings).

IMHO - The MOU's will be very detailed (to the level of detail in the final contracts) and there will be several. We have the EPC partner, the Chinese Contractors to carry out the various key elements of construction and the Strategic Investor. So 3 minimum. Once in place I would expect a general meeting to authorise the sale of shares in Zanaga to the Strategic investor. Signing of the various contract would occur soon after.

If there is to be Pellet production, I suspect that this will be done in the Port Indienne zone.

I suspect the Feasibility Study won't be revealed until various MOU's have been signed. But when it is revealed it will make interesting reading. Two things I will be looking for in particular are; costings for development beyond 30 million tonnes per annum and costings for pellet production.

China's ambitions will require a great deal of Iron Ore e.g. :

China’s Climate Goals Hinge on a $440 Billion Nuclear Build out.

China is planning at least 150 new reactors in the next 15 years, more than the rest of the world has built in the past 35.

https://www.bloomberg.com/news/features/2021-11-02/china-climate-goals-hinge-on-440-billion-nuclear-power-plan-to-rival-u-s

The point would seem to be the "Chinese" pricing that may yield 20% savings on Capital and Operating Costs.

"Guidance provided by Chinese EPC Partner that potential capital and operating cost savings of more than 20% could be achieved."

Jiving - In 2014 PSEI did the design for the Slurry Pipeline only. All other aspects were various "western" firms (listed in the RNS) 8 May 2014.

PSEI - Key Technologies

Iron Ore Dry Processing

Slurry Pipeline Transportation

Tailings Dry Stacking

and

COLD PELLETISATION - Proprietary, revolutionary cold bonded pelletisation technology for blast furnaces. Developed the first large scale commericial cold bonded pellet planr in the world (Sept 2020).

There is a little video profile of psei at:

https://www.youtube.com/watch?app=desktop&v=NulWSEReWeY

Vale wants to supply the iron-ore for "Green Steel".

https://www.miningweekly.com/article/vale-inaugurates-first-iron-ore-briquette-plant-2023-12-12

Very Interesting Extrader.

Note:

Also involved with a Potash Project in Congo

Also involved with "Mill Benefaction Technology" with Baowu in China.

Sorry that should be 3 Dec.

On 13 Dec - MinorMiner found a reference to Sapro Mayoko getting a $96m "Trade Finance Facility" from Afreximbank.

- It is actually a "Mine Development Facility" which makes more sense. More evidence that things are happening in Iron Ore / Congo.

Sapro Mayoko – US$96 million

The Bank also signed a term sheet with Sapro Mayoko for a US$96-million iron ore mine development facility in Congo. The document was signed by Kanayo Awani, Executive Vice President, Intra-African Trade Bank, for Afreximbank and Paul Obambi, Chief Executive Officer, for Sapro Mayoko.

https://www.afreximbank.com/afreximbank-records-deals-worth-about-us1-billion-as-iatf2023-continues-%ef%bf%bc/

Hi again.

I was considering how much cash would be needed. But anyway the point was option 2 might be the better one for the "Strategic Investor". From your "capital at risk" point of view option 2 might be even better.

Also, the best "Strategic Investor" would be always be someone who wants off-take. That is because if Iron Ore prices fall, any reduction in revenue in the mining business is off-set by getting the Iron-Ore cheaper.

Hi

Option 1 is £7.4 $ Bil for shares plus £ 1.0 Billion for Capex (not funded by banks).

So £ 8.4 Bil Option 1 vs. £ 1.5 Bil for Option 2. So you can see why Option 2 might be the preference.

The original $ 4.7 billion CAPEX included $ 416 millin for "Port Yard Facilities" whatever that is.

In Option 2 these are new shares, giving ZIOC £ 1 Billion towards the CAPEX on the 30 MTPA project.

CAPEX on 30 MTPA currently $ 4.7 billion, soon to be $4.7 x 0.8 = $3.84 Billion. Assuming 70% funded by banks, then $ 1.15 Billion needed (= £ 920 million).

Extrader - So why would the Strategic Investor not buy out 100% of the equity ? It is only a question of the upfront cost. If I were Glencore I might offer the strategic investor, 2 options (note that the numbers are just for the example).

Option 1. You buy 100% of the off-take for £ 1 Billion Plus 100% of Zioc for £10 a share. Cost to Strategic investor £ 7.4 Billion (Glencore gets 4.2 Billion / Others 3.2 Billion).

Option 2. You buy 50% of the off-take for £ 500 million, plus you buy 250 million shares at £4 each. Cost to strategic Investor £ 1.5 Billion (Glencore gets £ 500 million / Others nothing - but shares trade near £ 4 each).

Cyril2 - A little flakey and prone to typo's - guilty on both counts !

I have no problem with JOG or indeed the well informed on here. Its just my take on why JOG was £ 2.60 back when the initial farm out was near, and its £ 2.10 with both farm outs and the FPSO contracted.

There should be PI's rushing to buy in, but they are probably buying Empire Metals instead !

ATG - The off-take only has value if the mine is developed, so they get sold together. If Zanaga is sold and Glencore keeps the Off-Take, and the development is delayed, then the off-takes value is diminished.

Hi Extrader - I'm trying not to speculate beyond what seems to be obvious (to me at least). But I have some additional thoughts.

Firstly, this is all about the off-take, Glencore realised that long ago. The Chinese, Saudis etc. all want the off-take. The invest in the mine to guarantee that off-take has any value.

Secondly, don't forget that Zanaga is potentially much bigger than 30 MTP (60 MTPS annum is hinted in the latest presentation). This in my view makes the Chinese preferred as they will continue to dominate the Iron Ore requirements going forward.

Thirdly, the strategic investor could be a partnership, between Chinese and Saudis etc.