Comments re AGM4 Sep 2019 13:09
Hi all,
I was one of 3 PI’s who attended yesterday’s AGM.
Andrew Trahar (AT) welcomed us and introduced us to Cliff Elphick (CE), giving us the option of attending the AGM (‘mostly procedural stuff’) or having a chat with him afterwards.
We attended the AGM. Johnny Velloza wasn’t present but joined (to propose CE’s re-appointment as Chair) via speakerphone. CE informed that proxies had been given by 30% of ZIOC’s shareholders, who subsequently voted 100% in favour of each of the 10 resolutions.
Most was , indeed , ‘procedural stuff’ – including the Special Resolutions allowing issuance of relevant securities; disapplication of pre-emption rights; and on market purchase of shares.
CE invited questions and – with the SR’s and recent incentives RNS in mind– I asked whether ZIOC was clearing the decks for corporate activity.
CE quite properly said that anything of that nature would have to be communicated to all shareholders via RNS, but was gracious enough to follow up with a general context-setting as to how ZIOC sees things at the moment.
He alluded to stuff we’ve already taken on board :
- although iron ore prices have softened, the Chinese (anti-pollution) driven demand for product is expected to continue and they will be looking to lessen dependency/over-reliance on Australia , for strategic/commercial (global trade war fall-out) reasons, even though shipment costs ex Oz are favourable ;
- GLEN is in the driving seat re Zanaga, not only because of the shareholding control but also because they (through acquired Xstrata) put most of the money in : CE quoted US$ 350m (which seems on the high side ?), vs ‘very little’ by ZIOC [ incidentally supporting the characterisation as ‘promotor/developers’];
- GLEN isn’t keen on greenfield mine development, so ZIOC have been busying themselves looking at other approaches that might work. Hence the EPP.
On the latter, I learned that ZIOC have looked at 5 potential export routes :
- Through existing Pointe Noire;
- Through a trestle dock, north of PN;
- Through a dock to be shared with another miner ( Kore ? AN Other ?)
- Through Gabon
- Through new port at SEZ , PN.
Gabon (200 Km to Franceville) appears most plausible atm, but they still haven’t reached a deal (‘too pricey’).
I asked for views on Simandou, where 3 miners have reportedly lodged bids for a tender that specifies inclusion of poss. US$ 20 Bn in associated infrastructure.
CE acknowledged the attraction of the resource, as higher-quality/larger than Zanaga, but also the challenges that Guinea represents (the historic BSG corruption issues; the reluctance common across Africa to look at more rational/cheaper cross-border solutions; and – new for me – that a domestic port in Guinea would likely be ‘problematic’/ costly because of large vessel draught issues.
AT mentioned that water depth offshore PN, by contrast, was 200m within 2 Km. [ Ed.: making a port there strategically much more useful]
Continued...….
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