Member Info for CF73

Again, directly from the article:

------------------

“Engineering projects, infrastructure projects, and junior miners – they’re the same really, only named differently. One of my first ‘mining’ articles in 2015 covered the coal-to-power projects, just then coming to attention on AIM through Oracle Power (LON:ORCP), Kibo Energy (LON:KIBO), and Ncondezi Energy (LON:NCCL) […]”

[…]

“These companies are ‘developers’, and not ‘owners’ – the cause of much misconception […] Their attraction is that they are in charge of (ie hold licences for) very big ‘projects’ with completed values orders of magnitude larger than their own usually modest market caps […]”

“The description ‘sponsor’ […] is accurate, because before a spade is in the ground there is nothing to own – only plans and licences and permissions, and later perhaps, contracts with world-class builders and, increasingly in Africa, Chinese banks.”

“But even when completed, a ‘sponsor’ won’t ‘own’ the value of its project. That can only happen if it puts up a meaningful proportion of its much larger capital cost which, generally, is provided by those world-class builders and bankers, which is why they are known as the ‘backers’.

The sponsor, meanwhile, if the project goes ahead, will be credited, as a deemed contribution to the cost, with the value of the planning work it has done, and perhaps some element of a fee. And in addition – and only if the completed value of the project is sufficient – the backers might award the sponsor a ‘development premium’, being a share of any ‘profit’ on completion. [...]”

https://masterinvestor.co.uk/equities/should-you-invest-in-coal-to-power/

------------------

Going by this article, the 'Developers Premium' is not described as connected to a national utlility company/ EDM or the tariff.

If the value of a project is big enough, this is an amount returned to us (in whatever agreed form that turns out i.e. in our case, Developers Premium is the subscription price).

DanThePan, just to reiterate, am in agreement with much of what you say.

DanThePan, I am in general agreement with you.

The 60/40 split will determine investment responsiblity according to that 60 40 split, with Historical Costs to come back to us be reinvested in the project; and a developers premium (i.e. subscription free/price), from CMEC to us (for that 60%) also returned to use to be resinvested in the project.

We are in a great position thereafter, with AFC and Polenergia on board; and further help from Chinese banks, if we need them.

NCCL Developers Premium

Note: to keep excerpts short enough to a single LSE post, I have edited portions out, which I make clear by the following […]

--------------

“Engineering projects, infrastructure projects, and junior miners – they’re the same really, only named differently. One of my first ‘mining’ articles in 2015 covered the coal-to-power projects, just then coming to attention on AIM through Oracle Power (LON:ORCP), Kibo Energy (LON:KIBO), and Ncondezi Energy (LON:NCCL) […]”

[…]

“These companies are ‘developers’, and not ‘owners’ – the cause of much misconception […] Their attraction is that they are in charge of (ie hold licences for) very big ‘projects’ with completed values orders of magnitude larger than their own usually modest market caps […]”

“The description ‘sponsor’ […] is accurate, because before a spade is in the ground there is nothing to own – only plans and licences and permissions, and later perhaps, contracts with world-class builders and, increasingly in Africa, Chinese banks.”

“But even when completed, a ‘sponsor’ won’t ‘own’ the value of its project. That can only happen if it puts up a meaningful proportion of its much larger capital cost which, generally, is provided by those world-class builders and bankers, which is why they are known as the ‘backers’.

The sponsor, meanwhile, if the project goes ahead, will be credited, as a deemed contribution to the cost, with the value of the planning work it has done, and perhaps some element of a fee. And in addition – and only if the completed value of the project is sufficient – the backers might award the sponsor a ‘development premium’, being a share of any ‘profit’ on completion. [...]”

--------------

In other words, CMEC are our world-class builders, China the Bankers; together, they are the ‘backers’. Besides historical costs (and whatever other ‘…element of a fee’), if the value of the project is significant enough (which we know will be the case), they will ‘award’ the sponsor (that’s NCCL/ us) a ‘development premium’. This ‘Development Premium’, or ‘Developers Premium’, is not connected to EDM or the tariff. This is, in our specific case, the subscription price for CMEC to take up their 60% stake. In earlier programmes of work on the project, it was referred to as the Development Premium. For convoluted reasons, the term was changed to Subscription Price/ Fee (other LTHs have a better grasp of why that has happened. I will leave it for them to comment, if they wish).

I hope this settles the matter.

https://masterinvestor.co.uk/equities/should-you-invest-in-coal-to-power/

Good points both. We are edging towards that 5p barrier and are about to clear. Once we do, we'll be sailing past 6p and 7p in quick succession, on towards double digits. With Historic Costs Audit report on the way (for an amount greater than our market cap), September is shaping up to be a major month!

Good luck all!

Let's remember again, CMEC/ China have just agreed to take 60% of the project, and provide the bulk of the funding.

Thanks for your thoughts extrader.

All I can think to say is that a) GE remain in the picture, in my view; and that b) there is a much wider programme involving the international community. Germany, World Bank and Norway agreed to pay for the Transmission infrastructure connecting to/ around our project (reaching Financial Close very recently, on a total combined of $127m).

On the matter of keeping CMEC 'honest' (a good point), that arrangment will make a material difference. More specifically, and what I mean by this, is that our FC process/ timeline got prolongued - in my opinion - because CMEC/ China (with their Belt and Road Initiative) wanted a firm commitment/ contribution from Moz/ international community (Moz being the subject of international state-building programems, as part of developing both it as a country and also in support of the wider SADC region). In other words, China were not going to proceed to FC (on the Noncdezi project) until they saw some concrete firm contribution with the transmission system, intended to open up the lucrative internation market (i.e. which the interconnector line, between Moz and Malawi, has now done - again, funded by Gemrany, WB and Norway). Now this has happened, CMEC and NCCL are hurtling towards FC. It will move fast from here.

Simultaneously, I don't think Germany, World Bank and Norway would have agreed to pay for (reaching Financial Close, on) that transmission infrastructure without the guarantee of a viable project, in place. Otherwise, what's all that money/ transmission work for?!

The November 2018 EDM Final Report on the Integrated Power Plan, points to all of this. Where the power was comng from (to be carried by that transmission system) has been established i.e. coal-derived, from Tete, where:

“…other power plants that were looking to be developed at the time we last did the [Transmission] study, have fallen away.”

(NCCL CEO Hanno Pengilly’s own words: Proactive Interview)

Not only this, but we learn that the contribution from Tete is not just 300MW (for which we still remain undervalued), but 1200MW!

Finally, I find the idea of the project remains 'yet to be cinfirmed, to be crazy. It is happening. The transmission funding would not have happened otherwise; indeed, NCCLs very own transmission study supported the process (which NCCL have openly admitted).

Have tweeted about this, including screenshots.

https://twitter.com/CF73P0/status/1300538350311362560

Wow! Officially, NCCLs project is based on 300MW, with scalability, upwards of 1800MW, but little official mention of anything other than 300MW.

We recently found official of 600MW. Now, we have found official plans for 1200MW.

The Integrated Master Plan

Mozambique Power System Development, November 2018: Final Report

See Pages ES-4 to ES-5

See Tables; showing Mozambique/ EDM plans for coal and power coming out of Tete (our Project).

300MW coming on line 2023

300MW coming on line 2026

300MW coming on line 2029

300MW coming on line 2030

https://www.edm.co.mz/en/document/reports/integrated-master-plan-2018-2043

Total 1200MW, where “…other power plants that were looking to be developed at the time we last did the [Transmission] study, have fallen away.” (NCCL CEO Hanno Pengilly’s own words: Proactive Interview):

Where our Transmission study enabled developments around/ financial close on ($127m) on the Transmission System/ Interconnector Live and Substation in our area (paid for by Germany, World Bank and Norway) i.e. the necessary infrastructure for our Billion$$$ project!

Following signing of the SHA TS, we get to keep 40% of this, with CMEC/ China keeping 60%. China will also be finding the larger percentage of the funding required.

The staged approach is also a very plausible way of NCCL keeping all 40%, leveraging the revenue/ profit from the 300MW to raise debt for the 2nd 300MW, in 2026; and then the two of those being used to leverage for debt the next two 300MW units, in 2029 and 2030 respectively.

Wow! This is crazy!

#NCCL Below numbers are for a 300MW project.

As Badeli and others have said, we now know Mozambique want 600MW from our Tete project - so the below x 2

-----

Project cashflow $1.9b over 25years

Annual EBIDTA $175m

NCCL get:

40% stake in Billion$$$ Power Project

Cashflows for NCCL 40% stake $799m

-----

I would say the project is as good as approved, given all other proposed power plant projects (that might have been in our area) have 'fallen away', while Moz, with other interested partners (Germany, World Bank and Norway) have approved approved reached FC on transmission connecting our area (why would they do that? What's it all intended to comnnect to?!)

The value of the above numbers is about to come into full play now that we have signed the SHA TS, where CMEC/ China have agreed to take 60% of the project and find a huge amount of the funding! :-)

From the EDM Power Plan:

----------

“Of course, generation plants cannot work in isolation so transmission assets will need to be built. The current model will still need to be pursued, whereby EDM obtains funds from donors, multilateral institutions and bilateral partners." p.19

----------

Well, this is how it has happened. They reached Financial Close on a Transmission and Interconnector Line and Substation ($127m), working with Germany, World Bank and Norway, connecting Tete (where our project is, where all other proposed power plants have fallen away) and Malawi. See the below news story:

----------

"Maputo — The Mozambican government has launched an international public tender to select the contractor who will build the 400 kV electricity transmission line linking Mozambique and Malawi.

The line will run for 220 kilometres - 145 kilometres inside Mozambique and 75 kilometres inside Malawi.

A source in the Ministry of Mineral Resources and Energy, cited in Monday's issue of the Maputo daily "Noticias", said the line has guarantees of funding of 127 million US dollars from the World Bank, the Norwegian government, and German Cooperation (through the German Development Bank. KfW)."

[...]

"Work on the power line should begin in March 2021, and the conclusion is scheduled for March 2023..."

https://allafrica.com/stories/202008030091.html

----------

2023, is about when our project comes on line!

Worth adding, NCCL had said this to say that about transmission system/ interconnector line:

----------

"#Mozambique takes another step towards expanding the transmission network into #Malawi #NCCL's recently completed transmission study accounts for these exciting developments ensuring an optimal supply strategy into the grid"

https://twitter.com/Ncondezi_Energy/status/1291659356841431040

----------

In other words, our transmission study supported the above work, making it happen (and why wouldn’t we? After all, this transmission work is directly supporting our project :-) )

Looking excellent from here!

Another excellent post Badeli!

Now, to think that the belowm rtaher BIG numbers, only relate to 300MW:

-------------------------------------

Project cashflow $1.9b over 25years

Annual EBIDTA $175m

NCCL get:

40% stake in Billion$$$ Power Project

Cashflows for NCCL 40% stake $799m

-------------------------------------

Now scale up x 2 to account for 600MW, with improved numbers/ margins in certain respects, for scale and given certain work already, only needing to be replicated.

Is enormous!

Remember these numbers (taken from offical RNSs)

---------------------------------

Project cashflow $1.9b over 25years

Annual EBIDTA $175m

NCCL get:

40% stake in Billion$$$ Power Project

Cashflows for NCCL 40% stake $799m

---------------------------------

Well they are for 300MW.

Now look at the recent EDM (the Moz Power Utility) Power Plan for 2018-20218:

https://www.edm.co.mz/sites/default/files/documents/Reports/EDM_STRATEGY_2018_2028.pdf

Pages 18-19

"EDM, during the next decade, will develop the following projects: Nacala (200MW), Cuamba (300MW) and Tete (600MW)."

---------------------------------

Tete, is where our project is located, where all other proposed power plants have 'fallen away' (CEOs words), where Germany, World Bank and Norway, working with Moz, recently reached Financial Close ($127m) on a transmission/ interconnecter line and substation (i.e. infrastructure for our project) - i.e. other people paying for that infrastructure - where NCCLs recent Transmission Study directy supported that Goverment initiated tendering processes following financal close on that Transmisson system (i.e. supporting our own cause/ project), where, now, we can see that Moz want 600MW in quick succession.

So, the above numbers, you can times that by 2 :-) (i.e. from 300MW to 600MW)

Also feel that last year's delay (not the recent one) - and I mean, the longer than expected process to reach this point - was to see through Moz and international committment on the trasmission system. This has now happened (with the above mentioned parties reaching financial close in the last few weeks).

Boooming!

Really was an excellent RNS and subsequent Interview.

These will not stay this cheap for long. Good luck all!

Proactive Interview Hanno NCCL SHA TS

"It’s reconfirming key commercial parameters with our partner, particularly, as I have said, the equity participation that CMEC is looking to play, they’re looking at playing a major role, they’re looking at being a majority shareholder, they’re looking at bringing the funding. And, really, this is critical for big infrastructure projects like this, they need big strategic partners, with the expertise and balance sheets to deliver these projects. And today’s announcement, I think , just gives further clear guidance, on their intentions, and the requirements to get the deal done."

[…]

"I would expect an update on historical costs this month, sorry, September. Those are fairly advanced. We look forward to providing an update on that. We should announce an update on the transmission and integration study, which we announced, I think, two or three weeks ago […] and finally we will be providing an update on the tariff negotiations and market study. So quite a lot of, good news flow, over the course of the next month."

We're in this trading range, pure and simply, because are churning those Placing Shares. Ever since they were issued, there was no volume or traffic goign through this stoock and so no opportunity to get those shares out in the open. Last 4 or 5 weeks, that has changed.

If we all keep the discussion and analysis up, we should be out of this range very soon.

The SP hasn't shifted because we are churning through placing shares that were announced May 15th. We should be done very soon and thne we will epxlode (75% stock held fairly-to-very tightly!)

These are dirt cheap right now. Get them while you can!

Podcast Interview coming, we hear :-)

Agreed Chris!

So damn cheap still. Is crazy.

Thoroughly well said badeli!!