Member Info for Bozmo

Obv rand and coal prices higher now

As requested: Was written in March when spot around 11.80. Assume $rand heads to 13 in steady fashion over 2 years with strong rand a drag on profitability In FY2020 and 2021 looking at Coking Coal $135/t and $135/t Semi soft coking $95/t and $95/t Export Thermal $73/t and $70/t Domestic Thermal $31/t and $32/t Looking at $80m EBITDA but a delivered price of $5 higher would lift EBITDA by $4.5-5m a year Also remember we have GSP which is close to Musina-Makhado SEZ and resource base is 1.5b mineable tonnes. Happy to post article somewhere although from March -maybe get refreshed following financials report later this month. Future looking bright, esp when you consider low level of current market cap

Farm prices in South Africa have plunged by a third since the ruling party decided to seek a change to the constitution to make it easier to expropriate land without compensation, and as commodity prices fell due to bumper harvests following a drought. The average price of agricultural land sold in July was 9,318 rand ($614) a hectare compared with 13,700 rand in December, when the African National Congress adopted the policy, Johann Bornman, an economist who is the chairman of Agri Development Solutions, said by phone Monday. He utilizes data from the country’s Deeds Office, which maintains the property registry. The information was first published in Afrikaans-language Rapport newspaper Sunday.

Makhado lite is one with smaller capex that has 80m ebitda - will check assumptions at Monday at have at work

Company will get access under Mining Right, might reach commercial deal

https://www.zoutnet.co.za/articles/news/48133/2018-09-06/mc-mining-pushes-forward-on-aexpropriationaa-farms “At face value, the likelihood seems very small that the China/South Africa deal regarding the SEZs, as well as MC Mining’s continued attempts to get their Makhado Lite Colliery up and running, and even the government’s latest attempt to expropriate the farms Lukin and Salaita to gain access to the rich underground coal reserves without having to pay a cent for them are not interconnected.” Yes, looking more like a done deal to me

down 3% today.

Official statement.

The agreements further include a MoU between the Department of Trade and Industry (the dti) and the National Development and Reform Commission (NDRC) of the People's Republic of China to cooperate on international investment promotion for South Africa's Special Economic Zones (SEZ) and Industrial Parks. The following projects within the Musina-Makhado SEZ have been prioritised for implementation - a 4600MW coal-fired plant, a cement plant and other metallurgical projects.

Just a case of getting hold of these remaining farms, they really seem to be trying to ratchet up publicity against expropriation.

Confident we'll get them under the NOMR.

“But we’re starting to see other South African companies coming on board. For example‚ we’ve got Coal of Africa here with us as part of the delegation led by the president.”

https://www.sowetanlive.co.za/news/south-africa/2018-09-03-ramaphosa-strikes-deals-in-china-to-bring-jobs-factories-to-musina-makhado-corridor/

Worth a read of the below: there’s no doubt we’ll get the land, when and how much is the question. If Peel Hunt think EBITDA for Makhado is $80m/annum then this current valuation is nonsense.

(Also I think potential for GSP and Vele news soon. 2nd CGA always going to be slow)

“In terms of Section 5 of the MPRDA, prospecting rights and mining rights are limited real rights in respect of the land and minerals to which they relate. In simple terms, this means that prospecting and mining rights constitute limitations on the rights of ownership of the person who owns the land. Moreover, Section 5 of the MPRDA expressly authorises the holder of a prospecting right or mining right to enter the land in question, together with his or her employees, and to bring onto that land any plant, machinery or equipment and build, construct or lay down any surface, underground or undersea infrastructure that may be required for the purpose of prospecting, mining, exploration or production, as the case may be.

In other words, a prospecting right or mining right encompasses not only the right to exploit the minerals in question, but also the surface rights necessary for the exercise of such right.

In order to make sure that the landowner or lawful occupier of the land in question does not suffer undue hardship as a result of prospecting or mining activities on the land, the MPRDA provides that the holder of a prospecting right or mining right must compensate the landowner or lawful occupier for any loss or damage suffered by the landowner or lawful occupier as a result of the prospecting or mining activities. The amount of compensation payable may be agreed contractually between the parties, or it may be determined by the court or by way of private arbitration. It has become a common practice for mining companies to enter into surface leases or ‘surface use agreements’ with landowners or lawful occupiers, which sets out the parties’ respective rights and obligations, and fixes a compensation amount for purposes of the MPRDA.”

Hopefully that's clear.

Let’s me honest, Steenkamp has stoked up interest but 200m is extortion. David Brown is correct with his comments. I’ve met him a few times, he’s a fair man and think he’ll offer a fair price for commercial deal. If not then let Courts play it out.

http://www.dailymail.co.uk/news/article-6094565/White-farmer-set-game-reserve-seized-South-Africa-calls-theft.html

Mr Steenkamp, who has not revealed whether he has a 'Plan B', says he and his family have become so exhausted with the entire process and to 'just move on'.

'We have had enough and all we want is to go to court, and as the law says, get a fair price to sell.'

Article in daily mail saying owners of land we require have had enough and want to sell at fair price I expect big increase in sp when we have land

The times we live in. If this was the UK then there would be a compulsory purchase order and we would have the two farms required. Instead it’s SA so it’s government taking from wealthy rich white folk to give to oppressed blacks. Fake news. And mischief making by AfriForum and Akkerland Boerdery. Company are seeing owners of land in next couple of weeks. If we can obtain it then great others we’ll get it through MPRDA, timing depends on how much we would need to pay for commercial deal. Nice to see some buying back on JSE this morning, and at least trump got the rand to weaken. Confident but waiting game

A lot of people are talking about this on social media in SA. See what share price does tomorrow. Good luck all

This is key, article doesn’t mention we have NOMR so have rights to land access. Worth a read. Have heard company are meeting with landowner to try and reach a commercial deal so hopefully this will have long drawn out Court process https://www.news24.com/SouthAfrica/News/state-takes-first-farm-20180818

Commodity pricing holding up so far. 14.50 in Rand now. All comes down to land access with us unfortunately. This will get resolved just not sure timeframe

Peel Hunt are the only brokers with a research recommendation. Others comment on big news. The coal analyst at JP Morgan is a South African and he follows the company (as do others) but current market cap is too small for them to follow under a research capacity. Also now, a lot of AIM companies don’t have many analysts under new MIFid regulations as research now has to be separated from trading and paid for on its own basis.

Water license, development of North Adit next. Uitkomst been a great purchase despite issues. Keep moving forward.