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Hi all,

Whilst we wait for the IMF and China to sort out C-B's debt treatment, there's a bit of maybe positive news from elsewhere : the IMF has agreed a new facility with Ecuador, per the FT.

Summarising : the IMF $ 4.2 Bn loan to Ecuador is part of a larger $10bn package with other multilateral lenders to support its struggling economy, which is burdened by external debt in large part due to oil-backed loans from China.

Sound familiar ?

Now THIS is one read- across that may actually mean something...….

ATB

Hi all,

Relevant snippet :

…"Spirit’s Greater Warwick campaign with the Transocean Leader semi-submersible is due to take place once Hurricane’s FPSO for the Lancaster field is hooked up."

So it seems that there's more than an opportunity cost = quantifiable cash - to the delayed hookup, there are field development timing implications as well...

ATB

Hi TheHoopedBaron,

Exactly ! Why tell the market about rising iron ore prices (which is academic, since we can't benefit from for a couple of years or so) and not refer to an IMF (semi) endorsement that might signal a break in the finance logjam.....?

ATB

Hi all,

I'm with wellwell :

Imagine you're currently unemployed and get a job offer, starting in 'X' months, but with heavy hints it could be a lot earlier... it's only human nature to tweak your plans, update your cashflow projections for the next few months, maybe even tell the missus.....and so you get 'invested' in the earlier date - and then nothing happens....

There's raised expectations and opportunity cost : you don't have the cash for that household improvement or that snip of a purchase that you spot....

We'll never know what our reduced flexibility may lead to.

ATB

Hi shaun86,

You obviously didn't read …", almost ANY news should be good for our share price..."

MM drew a comparison, I've simply shown - using common and other sources - that the comparison is largely irrelevant, because of the 2 x co's very different situations. If you choose to see my facts as 'manipulation', so be it.

Incidentally, BKI itself - despite being apparently , relatively 'plain vanilla' - must have its sceptics : even after last night's s/p rise, its Market Cap is around US$ 16 million, or approx 1 % of its NPV of US$ 1.7 Billion.....

That's an even lower % age than the 2 previous examples of real world : NPV that I've provided, which makes me think that the BKI case isn't as relatively 'plain vanilla' as I thought.....

"The post tax unlevered economics show a compelling 36.1% IRR, 2.9 year payback period and US$1.66 billion NPV at a 10% discount rate."

See http://blackiron.com/project-details/

I'd be genuinely interested to hear your counter-arguments !

ATB

...onwards and upwards !

ATB

Hi all,

Another day, another sardine….

There’s a lot of excitement elsewhere about the supposed read-across to Zanaga of GLEN’s recent ‘non-binding MoU ‘ [= statement of intent] with Black Iron Canada (TSX : BKI) to help finance construction and offtake production of BKI’s high-quality iron-ore deposit in Shymanivske , Ukraine.

See http://www.mining.com/black-irons-shares-skyrocket-inking-mou-glencore-ukraine-iron-ore-project/

In a week when GLEN announces a US$ 2BN share buyback and Ivan learns he will collect about US$ 186 million in dividends, any corporate spend affecting its iron ore assets/ business interests is welcome.

However, the ‘read-across’ seems to be pretty superficial : a rising tide lifts all boats and almost any news should be good for our moribund share price.

Compare and contrast :

The BKI asset is in the heart of Ukraine’s existing iron ore mining area : “ The Shymanivske deposit is located in the Southern part of the Krivbass, less then 2km from two open pit iron ore mines owned by ArcelorMittal and Metinvest/Evraz Steel, which are also primarily magnetite quartzite deposits. There are currently seven operating open pit mines in the district.”

http://blackiron.com/project-details/

The area has ample infrastructure in place (road/rail, power, workforce) to support the project….and 5 x export ports for nearby markets (Southern Europe, Turkey, M East), which significantly reduce both interdependency risks and initial capital cost requirements.

http://blackiron.com/black-iron-ranked-by-cru-as-the-lowest-cost-pellet-feed-iron-ore-development-project/

Ukraine enjoys considerable Western political and financial support , given the recent Russian land-grab (Crimea), the Arcelor Mittal project above recently secured a USD 350 million loan from the EBRD (European Bank for Reconstruction and Development), the latest in a cumulative USD 11 billion lent to the country , see https://www.ebrd.com/news/2017/ebrd-provides-us-350-million-syndicated-loan-to-ukraines-largest-steel-mill.html

The quality of BKI’s potential production has been evaluated and passed by China’s Iron and Steel Research Institute CISRI

http://blackiron.com/black-irons-product-versatility-confirmed-by-chinese-study/

The CISRI study highlighted that the Shymanivske product is of high quality and versatile for use across different applications.

Previous technical studies conducted by Black Iron have shown that the iron product it expects to produce can also produce high quality iron ore blast furnace and direct reduction grade pellets.

BKI is actively schmoozing potential customers : http://blackiron.com/black-iron-year-end-update-on-shymanviske-advancement/

It doesn’t seem to me that GLEN’s preliminary footwork (low commitment, low cost) with BKI on a relatively ‘plain vanilla’ project in the Ukraine has that much read-across to Zanaga, in fact.

But, as I say, almost ANY news should be good for our share price….onw

Hi all,

S Africa's wealthiest man, Patrice Motsepe, is expanding his interests in C-B. This is he :

https://en.wikipedia.org/wiki/Patrice_Motsepe.

His brothers-in-law are Ramaphosa the SA President and Radebe the SA Energy Minister, so it's fair to say that he's 'connected'.

An entity he controls via Africa Rainbow Capital (ARC) , KROPZ , recently listed on AIM (EPIC : KRPZ), has acquired a majority stake (98%+) in Cominco Resources., which has been trying for years to unlock a major phosphate resource in C-B, see

https://en.wikipedia.org/wiki/Cominco_Resources

"Cominco Resources is a private company which is developing the US $2billion Hinda phosphate project located in The Republic of the Congo..... The Hinda project is the world's largest undeveloped phosphate deposit with a JORC Mineral Resource of 678 Mt and a Minable Ore Reserve of 405 Mt, sufficient for over 24 years of production."

Per the www.kropz.com website corporate fact sheet presentation Jan 2019, it acquired Cominco , which had "Using the technical and economic parameters defined, an unleveraged NPV (10% discount rate) of $1.85 billion, with an associated IRR of 38%. " for USD 40 million.

Interesting to note, again, that in the real world you can pick up a project with an NPV of USD 1.85 billion for less than 3% of face value (2.162%, to be precise).

Patrice (likely better informed than most), seems to agree that C-B is worth at least a small punt.

ATB

Hi all,

Re Zanaga's power needs, here's an old article that suggests 40 MW for the full Monty :

http://www.sukissa.co.uk/wp-content/uploads/2013/06/PATRIMOINE-GEOLOGIQUE-ET-RESSOURCES-MINERALES.pdf

..."18) L’entrée en production des grands projets miniers industriels nécessitera un accompagnement volontariste de la part du Gouvernement, notamment pour les aspects infrastructures. Pour un projet comme Zanaga, actuellement dimensionné autour de 7 milliards de dollars qui impliquerait, selon ses promoteurs, la création d’infrastructures très ambitieuses comme une nouvelle voie de chemin de fer ou un pipeline associé à la réhabilitation du réseau routier, un nouveau port en eau profonde et un port de service pour évacuer 30 million de tonnes de minerai de fer, ainsi qu’une centrale pour satisfaire des besoins en électricité estimés aujourd’hui à 40 MW. Un tel projet demande un accompagnement volontariste du Gouvernement, à travers une coordination renforcée des administrations et des services techniques impliqués, ainsi que des procédures ad hoc pour tenir les délais (autorisations administratives, accès aux avantages fiscaux et douaniers accordés par la convention et le Code minier, délais de dédouanement et d’acheminement des équipements).

Translated : "To kick-start major industrial mining projects will require voluntary support from the Government, in particular for the infrastructure aspects. For a project like Zanaga, currently sized around 7 billion USD this would entail, according to its promoters, the creation of very ambitious infrastructures such as a new railroad track or a pipeline accompanied by rehabilitation of the road network, a new deep water port and a service port to export 30 million tons of iron ore, as well as a power plant to meet today's estimated electricity requirements of 40 MW. Such a project requires voluntary support from the Government, through enhanced coordination of the ministries and technical departments involved, as well as ad hoc procedures to help meet the project's timeline (administrative authorisations, access to the tax and customs benefits granted by the Mining Convention and the Mining Code, bypassing any customs delays and routing of equipment, etc). …."

ATB

Hi all,

Positive news from IMF vis a vis C-B, from this link :https://www.finances.gouv.cg/fr/audience-administrateur-fmi_190219

No comment (yet) from China, who has to fall in line with the IMF requirements that Raghani refers to

Key phrase for me (translated) : .."The IMF is an institution that works with procedures. These procedures must be translated to conform with its policies. These procedures are not specific to the Congo. They are necessary for all countries that are under IMF Programme,." ie burden-sharing.

Ball now in China's court.

ATB

Hi No.!SS,

Helpful, thanks.

This is where things were left back in November 2018 https://www.imf.org/en/News/Articles/2018/11/14/pr18425-imf-staff-completes-staff-visit-to-the-republic-of-congo.

The relevant bit seems to be :
…"“The IMF team will continue discussions with the authorities on the remaining steps needed to bring the Republic of Congo’s request for a three-year arrangement under the Extended Credit Facility to the consideration of its Executive Board. This will require some adjustments to the 2019 Draft Budget, implementation of reforms to improve governance and transparency, and the provision of explicit assurances on financing from external official creditors, including debt relief, which is needed to restore debt sustainability. "

Point 3 (China's response) is the big unknown. It would be nice to think that, in the US / China macro trade / future world domination talks, they'd reach a 'common way forward' on nigglesome details, like the Congo !

We can but hope...

ATB

Hi DGR1980,

This is what they said in the last RNS , late December :

…"It is the Zanaga Project Team's intention to secure fixed price cost estimates for key aspects of the proposed EPP project in Q1 2019 as part of the process of determining its economic feasibility. Depending on the achievement of a positive outcome, the Zanaga Project would then be seeking to secure regulatory consents and financing for construction. Updated timing on this process will be provided in February 2019 when the beneficiation test work has advanced.
Clifford Elphick, Non-Executive Chairman of ZIOC, commented:
"It is exciting to see the positive progress being made on the possibility of the Zanaga Project's EPP solution and we look forward to conclusion of the test work programme currently underway. The intention is to secure fixed price cost estimates for the EPP project in Q1 2019 as part of the process of determining its economic feasibility"

ie, they should give us a revised TIMELINE this month of what needs doing / BY WHEN to see whether EPP is economically feasible or not; they MAY also give us some news re whatever progress (maybe even conclusion ?) there has been re beneficiation test progress; they hope by end MARCH to have EPP cost estimates (which they may or may not share with us).

Re possible test progress outcome, the read-across from Ambershaw's own testing may or may not be relevant - see earlier post.

We'll all be the wiser in 10 days' time.

ATB

Hi eggshead,

No need for dilution : co could, I'm sure, raise a loan from Directors if necessary. They'd rank ahead of shareholders in any liquidation, but other than that it's not an issue.

As with any share, there are always plenty of things to be cautious about, but I don't think this is anywhere near top of the list for us.

HTH, NAI, IANAL and DYOR

ATB

Hi johnpwh,

Good story !

My brother lives just below the Derwent valley dam and has frequently commented on the regular Lancaster flyovers.

Dambuster tribute :

https://www.bing.com/videos/search?q=lancaster+flypast+poppy+tribute&&view=detail&mid=528D80A5A3ECCF1BFB58528D80A5A3ECCF1BFB58&rvsmid=598EED0F524271050D9F598EED0F524271050D9F&FORM=VDQVAP

A Lancaster + Spitfire (close, but no cigar !)

ATB

Hi Longwait,

http://www.bombercommandmuseum.ca/commandlosses.html

The successes of Bomber Command were purchased at terrible cost. Of every 100 airmen who joined Bomber Command, 45 were killed, 6 were seriously wounded, 8 became Prisoners of War, and only 41 escaped unscathed (at least physically).
Of the 120,000 who served, 55,573 were killed including over 10,000 Canadians.
Of those who were flying at the beginning of the war, only ten percent survived.
It is a loss rate comparable only to the worst slaughter of the First World War trenches.
Only the Nazi U-Boat force suffered a higher casualty rate.


On a single night, Bomber Command suffered more losses than did Fighter Command during the entire Battle of Britain.

The loss rate varied greatly as the war progressed and was considerably lower as the end of the war approached in late 1944 and early 1945.
For most of the war, the majority of those who entered Bomber Command did not survive.

During the RCAF's Halifax operations between March 1943 and February 1944,
the average loss rate was 6.05%, producing a mere 16% survival rate (for a tour of 30 operations).

Yet despite the chilling odds, the flow of volunteers never faltered. The price was known to be enormous, but it was a price which continued to be paid with unquestioning courage.

If today it represents a debt which can never be repaid, it is at least a debt which must never be forgotten.

ATB

….continued

I'd welcome any comment / correction / clarification.

Especially if anyone can throw light on this : https://energies-media.com/congo-yunnan-linkun-lice-projets-energie-dont-centrale-a-gaz/, which in August 2018 was talking about :

(Translated)….” Flagship projects include the construction of a combined-cycle gas plant with an installed capacity ranging from 1100 to 2200 MW in Pointe-Noire, the economic capital of the Congo. This facility, which has not been presented with funding modalities and deadlines, will provide electricity to the Special Economic Zone of Pointe-Noire.

According to the information presented in Brazzaville on 29 August, the Chinese company has already signed an MoU on the implementation of these projects with the government.The feasibility studies have reportedly already been completed….”

On the DEMAND side, we’re told that Africa50 Infra proposal (> 450 MW ? > 900 MW ?) would be “enough to power a full 30 Mtpa Stage 2 at Zanaga.”

Do we have any figures - even ballpark - for Stages 1 or 2, perhaps from an early feasibility study ?

Our needs will presumably be competing with those of existing consumers and other new projects (iron ore, potash, petrochemical ) proposed in PN and elsewhere.

Returning closer to home, I’d be happy if the forthcoming Investor Presentation includes details of the power needs for the EPP….and how these are to be satisfied.

Rome wasn't built in a day !

ATB

Hi all,

The latest sardine to fall overboard is news that a new multisovereign development bank Africa50Infra, has signed an MoU (= Memorandum of Understanding = ‘for the record’) to increase a national power plant in C-B, initially from 300 MW to 450 MW in the short term , and potentially up to 900 MW by 2027 ie in 8 years’ time.

Details here : https://www.africa50.com/news-events/africa50-signs-an-agreement-with-the-republic-of-congo-on-the-margins-of-the-african-union-summit-for-the-extension-of-a-national-power-plant-259/

Per the MoU, Africa50 will ….” conduct a REVIEW of the power plant, including technical, financial and legal aspects, using its project development and financial expertise to ensure the project’s bankability and investment readiness, in collaboration with the existing shareholders. At a LATER stage Africa50 may invest in the project along with partners, including other development finance institutions and private sector lenders.”

C-B’s existing power supply through the Centrale Electrique du Congo (CEC) seems to come mainly from its plant at Pointe Noire, capacity 300 MW, set up in 2007 as a J/V between C-B 80% and ENI Congo 20%.

There’s been talk of a 3rd turbine, to increase capacity to 450 MW for some time , proposed back in 2016 and discussed here :
https://www.finances.gouv.cg/en/articles/public-portfolio-third-turbine-centrale-electrique-du-congo-power-plant-congo
and more recently here :

https://energies-media.com/capacite-prod-centrale-elec-congo-300-450-mw/

which tells us that the plant currently supplies 60% of the country’s electricity; and that the upgrade will REDUCE the current incidence of load-shedding/ blackouts in the capital and in Pointe Noire itself.

The President confusingly says here https://www.alloafricanews.com/la-centrale-electrique-du-congo-va-produire-470-megawatts-en-2019-president/ that there’ll be an upgrade at CEC to 470 MW BY 2019……with a photo of a small hydro project. Hydro in C-B is seasonal and therefore unreliable as baseload.

That appears to be the situation on the SUPPLY side : There’s already a deficit; the existing suppliers have known for some time what needs doing; someone else (new) is going to have a look at things …

I’d welcome any comment / correction / clarification...…. to be.continued

ATB

Hi all,

There's a couple of tiddlers (WB and geopolitica21) that aren't worth the time challenging, but here's a topical one :

There’s an interesting twist to the tale of the current Vale-induced supply crisis : a 15 Feb Bloomberg article extract quotes a ‘major Chinese mining group head’ as saying China’s domestic suppliers ‘won’t come to the rescue’.

https://www.bloomberg.com/news/articles/2019-02-15/u-s-china-trade-talks-set-to-wrap-up-with-few-signs-of-progress

So far, so good ...and consistent with the chorus re an environment of sustainably higher premium ore prices.

But, buried in the article, is the following :

"The market overreacted to the supply interruptions caused by the dam burst and mine suspensions, according to China’s top steel industry group, XXX, which said the loss of cargoes from Brazil can be offset by flows from elsewhere and it’ll be hard for prices to sustain gains."

If you click on the icon in the article, this name of this source is available behind the paywall.

So we’ve got the consensus view for public consumption from ' a major mining group'….and , seemingly, a somewhat different opinion for the 'more serious ' investors , from the 'top industry group'……

I 'get' that each side (producer/consumer) will be 'talking their book', but still...

Maybe (?) Mark Twain was near the mark, when he said : " It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."

ATB

Hi shaun 86,

"When the seagulls follow the trawler, it is because they think sardines will be thrown into the sea".

And it looks like more sardines have been thrown in today ;->

ATB

Hi sooty,

Yeah....anything to get away from gardening duties ;->

I might have a look at Legacy Hill Resources (LHR) at some point : they appear to have 'flipped' half of Ambershaw for a nice turn, I don't really understand how/why they sold down or out of its sister co Legacy Hill Technologies (LHT) > Binding Solutions (BS) , if this is the goose that is supposedly going to lay lots of IP golden eggs !

There's less publicly available info , which doesn't help.

If the technology works commercially - which admittedly still seems an open question - it should earn a fortune from royalties , first from existing iron ore producers and later, some way down the line, from ZIOC. So, potentially great news for BS (and hence , maybe, Trahar Senior?), less obviously so for us....and seemingly a poor decision by LHR. I'm obviously missing something !

The relationship between LHT and 'open source' lab facility provider Materials Processing Institute (not least a to-ing and fro-ing of registered company address) is pretty unclear to me, too.

I like the image I have - probably incorrect - of MPI being like one of those garages in the States that cater to classic car enthusiasts, where you can rock up with your restoration project and, for a fee, get to use all the expensive/ heavy kit they have on site...;->

The dogs, the dogs are calling....

ATB