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Version 1

At the meeting, the participating enterprises introduced the company in detail, and Chairman Ding of China-Africa Mining Group introduced the specific situation of the project. Hunan Energy International Cooperation Industry Alliance and China-Africa Mining Group (CCCM) have signed a framework cooperation agreement on the Congo-Cloth Iron Ore Project, and the two sides will carry out comprehensive cooperation in resource development, railway construction, port construction, other civil engineering and supporting construction of the Congo-Cloth Iron Ore Project.

Version 2

At the meeting, the participating companies introduced the company in detail, and Chairman Ding of China-Africa Mining Group introduced the specific situation of the project. Hunan Energy International Cooperation Industry Alliance and China Africa Mining Group (CCM) Congo Iron Ore Project signed a framework cooperation agreement, and the two sides will carry out comprehensive cooperation in the development of resources of Congo Iron Ore Project, railway construction, port construction, and other civil and supporting construction.

Very odd!

Not ZIOC, but not without interest...for potential read-across and strategic implications

UAE’s IHC Signals Interest in Zambian Copper Mine

The underground mine is haemorrhaging cash because of operational challenges and high costs, posting pre-tax losses of $300mn last year.

UAE’s IHC Signals Interest in Zambian Copper Mine

SEATTLE (Scrap Monster): Abu Dhabi’s International Holding Company has expressed interest in taking over a key Zambian copper mine that is up for sale, according to four people familiar with the matter.

The approach by the United Arab Emirates’ largest listed company comes as South African miner Sibanye-Stillwater is vying to take on Mopani Copper Mines, a prized but struggling state-owned asset in Africa’s second-biggest producing country, these people added.

Mopani produces the metal used in power lines, electric cars and renewable power. Two Chinese groups, Zijin Mining and Norinco, a defence company, which were initially part of the auction process for the mine, have dropped out, three of the people said.

Zijin’s departure was due to delays on the Zambian side of the process, while Norinco has had sanctions imposed on it by the US government, one of the people added. The sale of the mine also comes amid heightening geopolitical tensions between China and the US, which is stepping up its efforts to secure strategic minerals such as copper, cobalt and graphite.

In particular, Washington is placing a growing emphasis on preventing Chinese companies from tying up important supply sources in Africa. Washington is reviewing giving $250mn of financing to help build the Angolan leg of the Lobito Corridor railway that will help the Democratic Republic of Congo and Zambia export commodities.

It is also supporting jointly with the EU the launch of a pre-feasibility study to extend the line to Zambia.

Commodity trader Glencore sold its majority stake in Mopani to Zambia in 2021 in return for a government promise to repay $1.5bn of loans in exchange for future output.

The underground mine is haemorrhaging cash because of operational challenges and high costs, posting pre-tax losses of $300mn last year.

Any buyer would have to FULLY REPAY GLENCORE THE $ 1.5Bn DEBT IT IS OWED or continue to give the Swiss trading house supplies of metal produced in order to settle the debt."

IHC is chaired (and maybe partly-owned) by Sh Tahnoon bin Zayed (owner of 'it's what it says on the tin' Royal Group), National Security Adviser to the UAE and power behind the AbuDhabi throne.

Shows AD isn't frightened by 'difficult/problematic African countries; it'll look at much bigger ticket items than we (or at least, I'd) previously thought; that the US is flexing muscles to block China where it can; and that GLEN has Sh Tahnoon's calling card (or more likely the other way round)....and (with Congo debt still unresolved) an 'incidental' interest in 'doing business' with the UAE.

All good stuff, AFAICS!

WoodMac's reply (in part). As expected, a polite 'no comment'.

.." As mentioned in the article, the Middle East, Australia, and Brazil are well positioned to serve as DRI hubs as they have abundant, low-cost renewable electricity, competitive green hydrogen supply, access to iron ore [Ed.: really?], deployment of pelletisation technology, and so on. The new hubs in the Middle East will source their iron ore requirement from Brazil, followed by Africa – as has also been visible in Vale [Ed.: that's not Africa] announcing several hubs { Ed.: that's demand] in the Middle East.

Providing company/mine level supply mapping for the hubs was not in scope. Still, we have referred to Woodmac iron ore asset reports in the region to understand the availability of high grade ore and potential production by 2050. This is available to our subscribers.

We will not be able to help you with company / mine level remarks. In case you are keen to dive further will be happy to connect you to our sales colleagues..."

My acknowledgement :

.."Thanks for getting back to me.

As a humble private investor, I'm sadly not in a position to afford the depth of research that WoodMac's report price tag would warrant.

Of the upcoming projects that I'm aware of, the nearest to production (Belinga) has ore quality issues; the next (Mbalam- Nabeba) has legal (and possibly funding) issues; the elephant (Simandou) has logistical and funding issues; while my declared interest (Zanaga), starting at the back, has recently addressed a major obstacle (its corporate structure) and is currently engaged in what amounts to a DFS (due Q4 2023) and a roadmap to development starting Q1 2024 in Congo-Brazzaville, a country that has just awarded its principal port concession to AD Ports, an SOE from the UAE, location of one of the 3 Gulf megahubs you refer to.

In the very same article, meanwhile, WM acknowledges that first-choice ore supplier Brazil .."faces operational challenges at mine sites".....making African projects (plural, so 2 at least) a priority.

Hmmm...

Many thanks for your/WoodMac's willingness to engage.

If ZIOC works out as I hope, I might even be able to afford the occasional report!"

One can but try.

GLA

With respect, I think you've read but not understood.

See my 0926 and this

.."In respect of the remaining tranches the Company will grant the Lender warrants to subscribe for new ordinary shares equal to 40% of the funds made available under the tranche divided by the 5-day VWAP prior to the date of each draw down ("Reference Price") at an exercise price equal to a 40% premium to the Reference Price.."

So :

- make available $ 100k @, say, 10p; @ 1.25 = £80k = 800,000 shares equivalent

- Lender gets warrants for $40k exerciseable @14p; @ 1.25 = £32k /14p=228.5K shares

- charges 15% + 6%(upfront)on drawing.

Lender is financially motivated to see as low an s/p as possible at time of drawdown, for it to benefit from this significant (40%) warrant 'kicker'. Which will be also be dilutive.

And to sell out on any upward spike to lock in its 'upside'.

A recipe for, shall we say, volatility ?

The lending is through its Gibraltar subsidiary,Riverfort itself is self-described as a 'mini merchant bank'.

Its strategy is clear :

hxxps://riverfortglobalopportunities.com/strategy/

RiverFort Global Opportunities plc is seeking to invest capital principally through:

structured equity investment instruments

bridge loans

revolving loan facilities

convertible, mezzanine and senior debt

royalty/long term income instruments

project finance instruments

The structure of these investments provides downside protection, reduced volatility but with attractive levels of investment income. In addition, it is often possible as part of making such an investment to secure equity upside through the grant of warrants in the underlying investee company.

PORTFOLIO

As at 30 June 2023, RiverFort Global Opportunities plc had over £9 million invested in private and publicly-traded companies listed on AIM, TSX/V and ASX . Investment returns comprise income in the form of fees and interest and performance upside that includes instruments such as warrants, conversion rights, royalty streams and operationally linked income streams...."

But the Riverfort deal may be better than the alternative :

Riverfort recently arranged a similar facility for one of its other investee companies, oilco UKOG

see hxxps://www.lse.co.uk/rns/UKOG/1633-million-funding-facility-

Note the UKOG CEO comment

.." The discharge/conversion terms are attractive in that they will be either at zero discount to the lowest daily VWAP in the 15-days prior to conversion, or at a premium of 35% to the Reference Price of the relevant drawdown, whichever is lower. This is in contrast to the likely heavy discount to the Company's share price associated with a more traditional share placing in today's financial climate."

The lesser of two evils...?

As I see it.

HTH and GLA

Hi Peakhope,

Ah! I think we've been talking at cross purposes : (1) inventory and (2) Assets as a service (AaaS)

(1) Here's an example of where Falcon talks about achieving 'true sale' as an 'inventory solution

https://www.falcongrp.com/what-we-do/

You'll see that it's using its own balance sheet throughout the process : pre-shipment, transit, storage & consignment and outbound. It's only the last where 'true sale' comes in :

.."Achieve true sale of goods, immediate cash inflow and improve relationship with customers. Falcon purchases from and pays the client upfront and provides extended terms to end customer"

So it extends finance to the end customer (on-balance sheet) having previously provided pre-import finance and post availment finance to the client (ditto). I obviously have no problem with the concept of 'true sale' here. It's an 'ordinary' sale.

AZ's introduction of an SPC was necessary for SYME to avoid being categorised as a lowly-rated 'financial services provider' : he wanted SYME to command a sexier 'fintech' PE multiple). And he wanted outsiders to put up the cash.

(2) For AaaS, see this description

https://www.falcongrp.com/wp-content/uploads/2022/02/Falcon-Asset-as-a-Service-Whitepaper.pdf

which addresses the impact of IFRS16 on bulging balance sheets by allowing companies to pay per use as opposed to purchasing or leasing fixed assets, turning capex into opex, as I mentioned earlier.

.."Companies can not only achieve a lighter balance sheet but open themselves to a whole list of other benefits

which include:

▪ Improved financial metrics and valuation"...etc

This is evidently still something of a grey area in accounting, as evidenced by the heavy disclaimer at the end of the article, viz.:

.."If implemented, the ultimate accounting treatment of such arrangements will be determined by the directors and management of each company which is party to a transaction. The auditors of those companies will subsequently consider the accounting which has been applied and form an opinion on the financial statements of those companies. Therefore, the directors, management and auditors of a company may have a different view of the accounting treatment of such arrangements compared with the views and opinions of Falcon set out in this Document."..

If the source of the Falcon Group example was Tony Brown, I wonder whether he's conflated 2 separate structures, neither of which is relevant to SYME.

And I think you were thinking similarly, when you wrote .."symes usp is that IT'S OFFERING A SIMILAR SERVICE to Falcon group but the key difference is it’s offering it to SMEs ...".

Based on the above , it isn't offering a similar service at all : on the inventory side, Falcon is financing a conventional client/customer relationship, using its own balance sheet, with no accounting issues.

HTH

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