Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I’m not so sure on capex. Every project I look at has seen big inflation and I can’t believe we’re any different. I’m sure GC and the team will be making efficiencies where they can but I reckon it’ll be up a bit. Nonetheless, with this debt, it’s looking like it will be financed - even if those debt number don’t go up (which I reckon they could). Another positive I’ve just thought of is that big investors like coming in behind other big investors. I’d imagine that big equity investors will take a lot of confidence from the banks being in.
Yeah, basically they’ve appointed banks who will be the leading banks to provide the debt. They now need to go through various legal and technical workstreams (including an independent technical review) and agree the final commercial terms. In my experience the terms will already be in draft format and to be confirmed once the rest of the work is completed. So still a bit to do but there are big pluses here for me. Firstly, some serious banks are involved (ING is great and two big local banks) - these guys don’t sign as MLA unless they like the project and are serious about lending. Also, they’ve allowed it to be announced including the amount of the debt - this says to be that they’ve done a lot of work to get to this point. Finally the amount of ECA is really something - project finance debt always wants this (as basically it means the banks are insured if anything goes wrong) but it’s a high bar to clear and it means that the ECA providers (in this case led by the UK) really want the project to be built and financed. This has to be a big plus.
This is very odd. Must be something going on and can’t see it being anything good. Bit concerned.
Testpack3 - if you're going to quote someone, please make sure it's accurate. I did not say "years of experience in the real world", I said I thought that you were showing a "high degree of not understanding how things work in the real world of natural resources projects and especially in Africa".
Nonetheless, and not that it is really any of your business, I did my entire working career in natural resources (both O&G and mining) and it was predominantly spent living and working in Africa (both sub-Saharan and North Africa). So I'd suggest that my views are valid and also informed by quite a bit of relevant experience. That being said, they are just that - my views - they're neither right or wrong, they're just one opinion that I throw into the mix so we can all try and work through all the data points and form our own views on what to do. And I value your opinion, it's obviously comes from a lot of experience and you come across as someone who does a lot of research and puts thought into their posts, so I find them valuable - I listen to what you have to say, consider it and then it feeds in as I form my own views. For me, that's the beauty of these boards - they allow people to hear opinions and points of view from people with very different backgrounds and perspectives - some informed, some not but all valid and worth listening to. That's my way of working anyway.
I agree that there's clearly an issue with the ESIA, I just don't have an opinion on if it's bureaucracy or something more serious. I used to think the former, the longer this drags on I fear it may be the latter. I think the company comms are poor - my point just simply that when dealing with a government you have to tread very carefully - whilst they might be the source of the issues, putting them offside by a blunt RNS is (in my view) the quickest way to make any issues far worse, certainly in the long run. And we'll have to agree to disagree on international arbitration - I guess we may end up there but if we do that's a bad outcome - and on this one I speak from personal experience, so no one will persuade me otherwise. We might get some compensation if we win but we certainly wouldn't get to buy the mine which is why I'm a SH. Just my view based on bitter experience.
I don't often post because the interactions can get a bit tetchy but I think we're all here to see SP where it should be and with the mine getting built - we won't always agree on things but let's all just hear each other out and maybe we can all get better informed.
Oh and on the 'is Morocco African or Arab question', I'm in the African camp - not least because my Moroccan friend is still on cloud nine with pride that his country has become the first African team to make the SF of the world cup, not the first Arabic country. That's good enough for me!
This shows a pretty high degree of not understanding how things work in the real world of natural resources projects and especially in Africa. Do you really think GC isn’t asking about the ESIA and the reason for the delay? My guess is that he’s asking and chasing all the time but that the authorities are delaying. The reasons for them choosing to delay could be anything. It might be bureaucracy or it could be sinister - who knows - either way, you don’t “play hardball” with a country - that’s the quickest way to lose a licence or make it impossible to work there. Even massive companies such as BHP, Rio and FQM can’t bully countries- it always goes wrong. See Oyu Tolgoi or Cobre Panama if you don’t know what I mean. Going to international arbitration is the end if the road - we’d definitely lose the licence as we’d then be unwelcome and never get to build the mine. That doesn’t deliver us the value we all know is in the ground there. And I think the constant holding RNS tell us this. They keep saying the same thing without telling us anything new - says to me that they’re treading a fine line and trying to not annoy the Moroccan authorities. And before you say I’m apologising for GC, I’m not. I’m frustrated too but years of experience means I’m more realistic about what’s happening and how these things unfold. I think GC and his team have lots of faults but given how long the ESIA is taking I think it’s obvious there’s no silver bullet.
Also, takeover discussions and JV negotiations don’t have to be disclosed unless they start to move the share price.
Anyone else a bit underwhelmed by this? I’d hoped we’d be moving on from his days and really pushing for growth. Ho hum, need to look at this through different eyes I guess
I tend to agree. Feels like there’s something going on behind the scenes that they need to finalise before announcing or that there’s hurdles to clear but they can’t talk about them for fear of upsetting government - the length of the delay doesn’t exactly make Morocco look good does it.
@mrjinx - GC doesn’t hold 19 million shares. He holds just under 800,000 shares (it’s in the latest annual report) and if I recall correctly he bought all of them on market (last lot was around the time of the strategic investment). He holds 17 million options. Sorry to be pedantic but detail matters. The value of those options isn’t 17 million times by the share price. Take the ones today. At todays price, they are worth zero. He has pay 7p to exercise each share option. The whole point is that they give him reward when results are delivered. If results aren’t delivered the share price doesn’t go up and the options aren’t worth anything.
FWIW I’m super frustrated at this whole ESIA thing but think the last update shows they’re busy with lots of good project work in Morocco whilst they’re trying to get the permit. The project looks better than ever especially with what potash and fertilisers are doing so I don’t think they’ve achieved ‘zilch’. Genuine question - if you really feel like that why do you still hold your shares?
Quite. Options are common in companies for a reason - they incentive people - if the company does well so does the employee. Always amazes me how so many people don’t understand how they work. For GCs ones - if the share price doubles they’re worth £127k. Seems pretty fair to me.
I’m more impressed with the NEDs taking some of their package in shares. In my experience most just want to collect the cash.
They won’t have been able to buy for last few weeks because it’s pre results release. That ends with the results out. Just a thought but if they don’t maybe it’s because theirs stuff going on they can’t tell the market? OCP deal? Would make sense with the permit delay?
Yeah that’s a bit weird about the other role. I can’t see him not being full time on EML - arranging the financing is going to be more than full time.
I did a bit of a Google on him. His last gig - Moxico- he got quite a bit of funding in. $75m of equity and was working in same again in debt also a royalty - got to be a good thing? Looks like they also brought that into production too which I like to see.
https://mobile.reuters.com/article/amp/idUSKBN2EJ1IM
https://m.miningweekly.com/article/trident-acquires-royalty-over-zambian-copper-mine-2020-06-29/rep_id:3861
This is going to be mega for APF SP. Don't think the market gets it. Just added from my profit from GLEN ??
Why do you think he's part time? Is that what the company has said?
I think these are a good thing - most are a long way above the current SP. look at that last lot - at 15p he's got to get the SP much higher for them to be worth anything. I reckon our new CFO is going to be very focussed on getting the SP up