The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Vet(another one well worthy of a drink, or two!)
I would be gutted to sell @ 18p, only for Zioc to reach its MINIMUM potential, but would not be gutted with 18p, as it is better than the current 5p being offered!
It’s all relative, that said I would bet my bottom dollar(which I almost already have here), that we get a price magnitudes higher than 18p, as I can’t see the board selling that as a win.
Gla.
Ex- you are one of the few posters I will definitely buy a drink for.
In regards to the question, I believe the loan will be paid back by the issuance of new shares, thus glencore will have effectively brought 40m @ 5p.
And would therefore not be diluted if 40m shares were issued to compensate the board,ect.
Nice workaround..
I would actually be ecstatic if this were the scenario that were to play out, as I believe the company to be valued at MINIMUM $700m thus 630m(assuming the shard shares get placed)+ 80m(glencore&board compensation)= 710m shares in circulation still comes to about 70p a share!!
You do however, as always, pose excellent alternative ideas/questions.
Shaun- I did not say I will be selling at 18p, only that anything over that would be a bonus to have not sold out at that level. I will hold to the imminent (IMO) conclusion here.
I do indeed currently hold 4.4m, of which 2.5m are free carry, the rest I have added since the drop down from 18p.
Gla.
Gla.
Ha all, expecting glencore get paid back the loan+interest £2m ish@ the fixed share price of 5p(maybe a little higher)40m new shares. Directors to get about the same 40m new shares= total 80m new shares.
Sure seems the price has been artificially put down here, and subsequently held here since.
This way Glencores holding doesn’t get diluted.
Just my two bob!
The end is fast approaching, I’ll take anything over the 18p recent high, so I don’t feel so stupid for not selling out when I had the chance.
Not de-ramping, it’s not in my interests to do so, as I hold 4.4m shares.
Would still love a quid a share for obvious reasons!!
Gla long time suffers.
AIMO
Anymore “tips” McA?
Kongo: Really good post & strongly recommend.
It’s all about mitigating the risk of doing business in the Congo. It’s outside of the Chinese sphere of influence, as it is also the Middle East’s. This is where Brazil(&Vale) become so important, being one of Congo's primary trading partners, and the close relationship between Den & Lula, and most importantly Brazil’s Vale being a powerful entity, with the expertise(and now the cash), to develop Zanaga.
With Vale being the “front man” it opens up the possibility of Middle East/Chinese money getting involved as a coalition strong enough to counter-weight the risk of “doing business in the Congo?
Zanaga also offers a chance for both Brazil & Vale to redeem their reputations in West Africa?
Gla.
More buying in a day than the last month!
I’m gonna curse it, Bottoms In.
Gla.
Hopefully coming qtr results show a turnaround..
Https://m.youtube.com/watch?v=n1-ovZeO1zA&pp=ygUPemFuYWdhIGlyb24gb3Jl
Good morning Andrew,
May I ask your observations on the “going concern” issue in the recently published annual results.
The shard facility with the option to issue up-to 18 million shares, since being announced has had a notable negative short term effect on the share price. My concern is that if the share price was to continue its current trajectory, and fall below 6p, then the issuance of 18 million shares would not raise enough capital to meet the obligations of the loan+interest due to Glencore by years end.
It is noted that you use an illustration price of 13.3p, where as of close of Friday we were trading at 7.69p.
Was the option of a “standard” fundraiser at a fixed discount to the 30 day average share price discussed?, What were the reasons this option were not taken?
It is also noted that the board has taken the decision to “launch a partnership with Chinese iron ore technical expert engineering firm ("Chinese EPC Partner") as part of a two stage optimsation process of the Zanaga 30Mtpa staged development project”. Is this action prudent, given the proposed undertaking will apply further strain on our finances.
Does this further heighten the risk of the company not being able to meet its obligations at year end?
Although little was mentioned in the annual report of the positive global backdrop, being the Saudis proposing large investment in future “green steel” initiatives , which would require high grade fe iron ore, of which we are blessed with. Also the proposed new port being built in the republic of Congo, to name but a few of the recent boons. I am holding off investing further until the above mentioned concerns have been mitigated.
Regards
Sent from my iPhone
Tech- good points.
-I think of the word mate, more of a necessity/lubricant(brown envelope).
-as pointed out the placing may never happen(in full), just a prerequisite to being able to issue the”going concern” statement.
-also another possibility is the need of cash to tie up the loose ends on a sale(options, outstanding wages, obligations, ect)
-as for the rolling of the loan, it may well happen yet(in due course if necessary).
all IMO
For mates rates.
Hummingbird all over again(they raised just prior to their big jump in SP, allowing “mates” to acquire 17% of the company at the bottom).
I expect the purpose of the facility is to allow “friends” to accumulate a holding, which would not have otherwise been possible in a share with a very low free float.
I will stick my neck out and say this share trades to 30p+ within 3 months of this post.
Gla.
Ext- possible, but wouldn’t that technically amount to Glencore paying 48.26% of the loan+interest back to themselves through self inflicted dilution of their stake? Trivial perhaps to a behemoth like Glencore, but definitely unsustainable if this method were to be continually used over subsequent years(they would in time, effectively allow themselves to be diluted to nothing).
When the loan got announced last year, I concluded(perhaps wrongly/TWT) that it acted as a countdown to a deal being concluded(or the loan could be rolled over ,if close to being concluded).
I had assumed that the loan+interest would be paid back via proceeds of the sale(and I still think it will).
Anyway I hadn’t thought of Glencore being so benevolent!