Member Info for CF73

Whatever happens jdt, whichever way it goes, news on the 'Shareholder Agreement Term Sheet' is major. Unless they intend to amend it later, certain things are intended to be locked down soon (otherwise why bother with this now, with everything else that's going on?).

The fact they are proceeding, right now, with this Shareholder Agreement Terms Sheet, shows partners are very confident about their involvement and want to confirm this.

This is good news to me, hoping to add a few more where/ if I can. Looking forward to the 'coming weeks.'

Hanno Pengelly, NCCL CEO, has just been on Proactive Investors for an interview. Yes, delay is annoying, but interview is very encouraging. We remain in a strong position. Will be adding more too, now.

jdt, there'll be a range of possible interpretations.

- If everything else has shifted to H2, why has the shareholder agreement terms sheet suddenly been brought into the picture, to be completed coming weeks?

- There's some detail as to what is outstanding in terms of technical/ domestic infrastructure matters and mention of COVID. But COVID hasn't hit Africa hard (other than Lockdown) and isn't going to effect demand or the project. On the technical infrastructure issues, NCCL have been on the ground all along. All this sounds a bit dubious to me. Smokescreen?

Given 'coming weeks' for the term sheet, we haven't got long to wait to find out!

GGG,

Hear what you are saying . Yes, absolutely, elements such as EPC and Tariff are crucial. But on the question of why the Chinese would commit to buying more of the project...in response, without trying to circumvent the question, I would say that the project is now clearly a Government2Government level programme.

Given this, what is the role really of NCCL?

They were the original project-founding company and have been the corporate vehicle for the project vehicle.

As work with CMEC/ China, in particular, has progressed (thinking about binding JDA, earlier EPC and tariff work, visits and signing ceremonies etc.), and now with the challenges of COVID, there is a major question, in my view, of whether it is any longer necessary or expedient to keep NCCL involved?

If China want this project (which I believe they do), and if Moz need and want the project (which I believe they do), and they have been in direct conversation (which they have), and COVID has landed making things more complicated but not deterring from them from the project, then why keep NCCL involved when it’s another [potentially unnecessary] layer in the process, when the BIG players actually are Moz, China, GE and AFC???

These questions come into view, for me, following the emphasis in today’s RNS regarding that ‘Shareholders Agreement Term Sheet’ and especially thinking about the first of the key areas within it, ‘Project equity participation’.

Why this now, so suddenly?!

Thoughts for whatever they are worth, it was meant to end...

Today’s news regarding delays was not great.
However, I believe there are details that require further exploration. Specifically (from the RNS)
------------------------------

Shareholders Agreement Term Sheet

The SHA TS is in an advanced form and is expected to be signed in the coming weeks. The SHA TS will provide the framework for the full form Shareholders Agreement, including:

· Project equity participation;

· Investment conditions;

· Funding responsibilities of the parties pre and post financial close ;

· Governance structures; and

· Project management responsibilities.

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

What's interesting about the first of those -- 'Project equity participation' -- is that this tells us the percentages each party intends to take of the project. As others have said elsewhere, this is a MAJOR piece of NEWS!

Why?

Seems they want to cast this in stone now. Thought we would have final partner percentages somewhere en route to financial close, including possibility of a buyout. Hadn’t expected this to be a matter of focus at this stage. But this is now coming in a matter of weeks – project partners looking to establish the extent of their stakes in the project. With this all taking place in the context of a binding JDA.

This has me thinking further: are these meant to be the final intended stakes?

If not, then why bother doing this now? Why expend energy, time and resources, right now, to put this on the table?

Is something being moved forward? Fast-tracked?

For a start, this project is now Government-to-Government. This is not like other projects or companies working within Africa, this is not like KIBO. Moz Government, senior GE and NCCL representatives went to China over this, for that major signing. This is a serious project, involving committed partners (CMEC, GE, AFC, not to mention, the Moz and Chinese Governments themselves), a project well into a binding JDA.

It seems to me that certain elements of the project’s arrangements are being moved forward.

One final thing for me: COVID has complicated matters, for sure. For the BIG players working on the Ncondezi Power Project – being CMEC, GE and the two respective Governments – if they want this project, and I am very confident they do (it has massive national and wider Southern African significance), then progressing the project with NCCL as the vehicle/ pivot presents challenges at the latter stages of development, especially with everything else happening.

We could imagine (or at least I can) that by this stage CMEC/ China are wanting to speak more directly with/ to Moz. Chinese State/ Belt and Road Initiative funding a big part of this. With COVID, going through NCCL doesn’t make sense. If this project is happening (again I believe it is), then NCCL are not the big player.

This piece of news – regarding the Shareholders Agreement Term Sheet – really is a case of ‘WATCH THIS SPACE!’

Thoughts for whatever th

This will get done. Frustrating? Yes. But it will get done.

I'll be adding and building my holding.

We can sometimes forget we have a binding JDA, for a project where NCCL get to keep 40% of,

- 'annualized EBIDTA of US$175 million (nominal terms)'

- 'net equity cash flows are expected to be in excess of US$1.9 billion (nominal terms) over the 25 year life of the Project'

- 'Estimated Ncondezi 40% net equity cashflows of US$799 million (nominal terms) over life of Project'

So why aren't we above a £14m market cap?

...is cos we've not had enough concrete approved assured numbers to assist with that valuation. Now we will, and with it, everything else should come into play.

I mean 12p to 13p on confirmation of historic costs, by end of month, is very possible. Those historic costs are critical for the valuation of this company (which until now has been near impossible). The company know this, acknowledging the significance of having those costs in the public domain i.e. from 15th May 20 Update:

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

"The approved historical costs will represent a clear crystallisation of value for Ncondezi shareholders."

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

GGG, agreed --- though I see in excess of 10p and nearer 12p to 13p. Remembering that 10p equates to a market cap of £35million. Confirmation of historic costs at c.$25million will make a big contribution towards that, as will ongoing progress on EPC etc and confidence given by our CMEC/GE partnership, as well as GridX.

We're already getting so much for this SP and Market Cap. SP to rise more sharply in coming days.

badeli, that's extremely helpful, and makes a great deal of semse. I had seen by the RNSs that GE seemed to have gone quiet. China Belt and Road fully behind this and they want it. I do think NCCL will be bought out. If that happens, do we feel that CMEC will want the full 100% or might GE, with the political risk largely removed and the work done, want the other 40% (NCCL's stake)?

I stand corrected GGG, the historic costs are lower.

Have had time now to go through notes. I have the historic costs down as between $25-30m.

The Developer's fee (what they've called the subscription fee), is calculated via a formula. There are possibly a couple of approaches/ formulas that they could draw upon (one, if I remember right, is based on those historic costs and multiples thereof, possibly upwards of x 3; the other possibly linked to NAV, I think). I believe the ‘fee’ will be significantly greater than the historic costs. Together, they represent a large chunk of capital.

On Financial Close, agree we will see an SP way greater than 20p.

But the question remains – will we bought out before any of that?

For me, a buyout price would be in the region of $150m to $200m (if we think about the historic costs, the developer’s fee and then the value that places on the remaining 40% of the project).

Personally, see this headed to buyout. Cannot see why CMEC and GE would want to keep NCCL involved. The only other option I see is CMEC (and possibly GE) together reducing our share from 40% of the project to perhaps 20% or 15% (leaving the remainder as a possibly a free carry). Any less and am not sure is worth keeping us at all.

Lots of possibilities in the coming days and months.

#NCCL #Ncondezi major news due by Q2, meaning less than 2 weeks from now. From the 15th May Update:

"The approved historical costs will represent a clear crystallisation of value for Ncondezi shareholders."

That's a confident statement. They know it is those numbers we have been waiting for and now they are coming. They have an idea of what that means in terms of the valuation of the company.

LTHs have guessed historc costs in the order of $50m to $65m. There is also a subscription fee (partners have to pay) to buy into project. After all that, we still get to keep 40% of the project.

48.05% of the stock in the hands of major shareholder, in the tightest of hands.

Minimum of 25% with LTHs.

Mminimum of 70% of the shares-in-issue in fairly-to-very tight hands.

MarketCap £14million, when

Annual EBIDTA - US$175 Million
#NCCL 40% cashflows US$799 Million 25 years

So when news lands, shares will be in really short supply.
20p+ realistic

...unless a buyout is on the cards. If buyout is to be realistic, makes sense (to me at least) to do so perhaps in combination with/ or instead release of news on historic costs. Why? Because the publication of those historic costs will give the market good grounds for valuing NCCL in double digits, with 20p being very realistic (20p SP equates to a markat cap of £70million, when historic costs of minimum. $50m, subscription fee to come (which will be significant), and we keeping 40% of the project, as things stand).

Having been waiting quietly for this, good luck all!

1p equates to a final sale price of $175million. We've invested over $500million in exploration. My view is we'll get close to 10p per share. That's $1.7billion based on a >$500million investment

If FRRs 1% was worthless, this mess would not be happening. So, we can deduce that FFRs 1% is worth fighting over.

Am remembering ZM saying soemthing to the effect of these wells requiring $3million to develop and returning $60million.

Am inclined to believe that, otherwise, why bother fighting over that 1% in this way?! Why make yourself look so silly?

If this is all on the right track, that that 1% is huge and massively profitable and we have Super Majors looking at this, then 10p per share as an outright buyout price is not unreasonable. I would take it. But then, there are geopolitics and wider energy security issues, and so it may not be up to FRR to simply make that call (if FRR were to recieve an offer).

Finally, I do genuinely believe that GG cannot afford to transgress too far, otherwise the internatioal community will be forced to respond, and will have a mandate to do so.

If that letter is genuine, it sums up what some if not many of us have been saying. Going by what we have seen of the postArbi back and forth, it was evident that GG stretching the truth crazily. FRR have gotten what matters - being that 1%.

It kind of made sense that GG would try to spin it. But they continued and now - irrespective of this letter - It has blown up in their faces. The entire episode will sink them. Perhaps it's too late and they're going to be barstewards about it, know idea. But FRR remain in the right. Holders just need to hang in there (I know LOL we got no choice)...

This is an excellent deal, pointing the way to a bigger picture developing and which we'll be hearing about very shortly.

Good luck all the genuine folks and holders!

EPO close. Has been signed off by Atorney General and is at the very last stage. Nothing holding it up any longer. About to drop.

Good luck all the genuine folks and holders!

Just a few quick thoughts after all this news,

1. Thanks to DomFok, in particular, and also to Looed, not ot mention the number of other regulars here. Has got to best ever board as far as a deslisted share is concerned

2. I am not pleased that our investments are so heavily entangled in geopolitics of this kind (I say this as a one-time student of international relations). But I guess I should have been more open to this possibility - it is energy after all.

3. It seems ever more increasingly clear (to me at leats) that FRR came out of arbitration OK, that we retained the 1% that mattered

4. ...that GG are increasingly desperate (they could have just tried let it go away quietly but have not, perhaps under pressure from Russia - but it will blow back in their faces and clearly has started to).

5. If GG had played fair, imagine how, after all this time and all this despair, what the company might be able to tell us and, indeed, how it might open in terms of business as normal (or perhaps am being too optimistic?)

6. I do not buy into the idea that one-side is inherently good and the other bad. The present situations of the US and Russia are a testiment to that. What I do understand and accept is that Russia are an impediment to my investment. For that reason, I hope they throughly lose!

7. If I had known the levels of geopolititics involved with FRR, I would have avoided it, to be honest.

8. How FRR have survived to this point is nothing short of miraculous.

9. I sense GG softening in their position.

10. Lets hope that GG pull back very soon and allow us to realise fruit of all that hard work and hope.

Great stuff MrMagoo, and great to see a good srart already!