RE: Stop12 Jul 2023 09:27
If you read the November 'Acquisition' RNS, you'll see
.."· Funding agreement
o In order to fund the Project's continuing work programme and budget, as well as the working capital requirements of ZIOC, until 31 December 2023, Glencore Projects has agreed to amend the terms of the Loan Agreement as follows:
§ increase in loan quantum from US$1.2 million to US$1.8 million;
§ extension of loan repayment date to 31 December 2023.
§ Jumelles may utilise up to US$200,000 of the loan facility to advance loans to ZIOC to fund its working capital..."
From which it's reasonable to deduce that (a) $ 600,000 was all the extra funding foreseen as needed to see ZIOC through to (b) extended 31 Dec 2023.
It also suggests that the new Shard facility (set up just before YE results publication) was almost certainly driven by need to avoid a 'going concern' (12 month outlook) qualification, rather than a pressing need for funds.
We know that the previous Shard facility , for fewer shares, was drawn down over 3 years.
As to why not just have GLEN increase (again) the amount and term of the existing loan facility, consider the optics : had it done so, that would show that 'new ZIOC' was still in GLEN's pocket, rather undermining the necessary legal/commercial fiction - and purpose- of the 'acquisition' in the first place.
Consistent with this interpretation, the GLEN Board members couldn't 'get all over this', because they are 2 x (minority) NEDs...
Note too that the original Loan facility was agreed TWO MONTHS EARLIER in Sept 2022,(ie pre 'Acquisition) when ZIOC's cash balance was down to $ 0.1m, with remaining Shard facility expected to suffice to Q3 2023, and that
Work programme and budget for 2022, and $1.2m Jumelles Ltd working capital loan facility, agreed with Glencore Projects Pty Ltd ("Glencore"), a subsidiary of Glencore plc
o Loan provides full financing for the Zanaga Project budget until 30 June 2023
Paradoxically, you could argue that (1) GLEN's apparent 'going along' with the (dilutive) Shard facility together with (2) the apparent lack of immediate funding need suggest that the Shard facility requirement is indeed 'technical'.....and may, rpt may also suggest that 'the deal' is indeed close :
- loan terms agreed in Sept 2022 are tweaked (amount/tenor) at time of Acquisition(Nov 2022), when 'deal-enabling' re-structure takes place; independent newCo ZIOC takes out new Shard facility, for which it seemingly has no pressing need.
It's at least conceivable that we've seen this succession of short-term measures because management expect to be 'overtaken by events'.
I normally leave this sort of dot-joining to MM....where is he, BTW? When last heard of, he said he had 'a long list of potential SP kickers I'm watching for. Some are actually in play.'
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