Member Info for extrader

Hi all,

By way of some background into the governance issues that the IMF has in its debt relief negotiations, you may find the attached [end 2017 but still relevant ] report of interest :

https://www.globalwitness.org/en/campaigns/oil-gas-and-mining/imf-must-ensure-kleptocratic-regime-republic-congo-does-not-get-another-sweet-deal/

The source, Global Witness, obviously has an agenda - and the full report should be read with that in mind. The recently-mentioned Lucien Ebata has a walk-on part that puts his news in context

So it has to deal with a back-sliding would-be borrower [and - in China - with a conflicted lender]..

The IMF must surely feel "Fool us once, shame on you; fool us twice, shame on us..." Or something like that.

George W Bush put it better, of course.

And all this against a backdrop of the US/ China trade talks and all the horse-trading (including 'peripheral stuff' like BRI and resource colonialism) that there's likely to be around that.

ATB

Hi all,

Given the rocky road to commercialisation that Ambershaw seems to be taking, I though I’d look at Element ASA, the effective 50-51% shareholder, who bought their stake for US$ 7.6M in 2/2017.

They seem to have got an incredible bargain, given the extract quoted elsewhere that ascribed to Amersham an NPV of US$ 499M.

If you look at the source in full https://www.elementasa.com/assets/uploads/pdf/Element_Q3-2018_FINAL.pdf you’ll read

…” Prices for super premium DR grade pellets have continued to be strong in and following Q3 2018, with trades taking place at the upper end of an average price interval of 240-280 USD/dmt, regardless of the fall seen in 62% Fe iron-ore prices. At Ambershaw's price level for internal budgeting purposes (130 USD/dmt), the Net Present Value is USD 499 million, based on a cash cost estimate of 56 USD/dmt….” (page 4)

Note the key words ‘for internal budgeting purposes’. As the earlier ‘Ambershaw’ research shows, the company is a long way from producing anything.

Note too, that on a like-for-like basis, you can pick up an NPV of US$ 500M for US$ 15M (Ambershaw’s implied cost) = 3% of nominal. Bear that in mind the next time someone quotes NPV as a basis for shareprice.

Element looks to be a ‘fun’ company : Apart from its stake in Ambershaw, its other investments at Q3 2018 are 2 x crypto-currencies (‘asset-backed tokens, including, optimistically – IRON), currently on hold for regulatory reasons (pages 3-4) and an interest in Mindoro, a Philippines nickel mine , which they laconically report assetwise as ‘held for sale since 31/12/2015” and incomewise as “ discontinued operations”(page 6).

It seems to be able to raise new finance, they must be doing something right, though it’s not obvious on what basis : they’re quite happy to close the report (page 7) with the following ‘interesting ‘ conclusion :

“Element has called an Extraordinary General Meeting on 14 December 2018 to elect a new auditor, following EY's notice that they wish to withdraw as auditor due to challenges in the cooperation….(sic)”.

Made me laugh, anyway !

ATB

Hi all,

Reference to Ambershaw in the ‘mystery photo’ thread piqued my curiosity, so I looked further, and this is what I found :

Ambershaw’s website and news releases tell us that it bought Binding Lake Iron Group (BLIG) from the receiver in 11/2015, with closing (on payment of US$ 1.25M convertible loan) in 11/2016.

It carried out an environmental study in 2/2017, then immediately sold an effective 51% stake to Intex (later renamed Element ASA) for US$ 7.6M.

By mid 2017 it had obtained 1 tonne of material for a Direct Reduction sample , to be used for pelletisation testing for its potential client base around the Great Lakes area.

Testing was done by its sister company Legacy Hill Technologies LHT (both then part-owned by Legacy Hill Resources LHR) at the Materials Processing Institute ‘open source’ facility in Middlesborough.

See http://ambershaw.ca/wp-content/uploads/2017/07/201707-AMI-Update-Note.pdf

The Ambershaw website has been updated to 2019, the last news 8/2017 was that producers had shown ‘significant interest’.

In 3 /2018 investor LHR reports that Ambershaw “ hopes to test and pilot its beneficiation process to produce pellet grade feed as well as to trial the production of pellets”.

In 9/2018 investor Element ASA reports

"In the third quarter of 2018 AMI filed an application for an Advanced Exploration Permit to complete bulk sample extraction of mineralized ore from the Bending Lake deposit.
Ambershaw will produce super premium DR grade pellets for use in the North American steel production market, through innovative technology for which Ambershaw holds an exclusive license for North America. The ADEX permit applied for will allow for sample extraction of 100,000 tons of mineralised ore, which is expected to yield 20,000 tons of 68% Fe concentrate which will be used to produce the pellets. Pellets produced during the sampling phase will be offered to various steel producers with the aim to conduct tests and thereby secure long-term contracts. "

See https://www.elementasa.com/assets/uploads/pdf/Element_Q3-2018_FINAL.pdf (page 4)

From the above recital, it doesn’t seem to me that Ambershaw’s (?) / LHT’s (?) cold pelletisation technology has been commercially proven yet, though I accept that North American market requirements , particularly EAF (electric arc furnace) , may be different from the needs of our own target market(s).

The protracted timeline that Ambershaw has experienced may have given ZIOC pause for thought re technology viability for its own EPP. It would also appear to knock on the head the ‘earlier involvement’ thesis advanced in the ‘photomystery’ thread.

ATB

Hi all,

There's talk elsewhere about the significance of ZIOC's use in 7/18 of a photo showing pellet testing that is the same as a photo posted in 4/17 by Ambershaw, with the conclusion being drawn that this is proof of ZIOC's earlier involvement in the cold polymer iron ore pellet project, showing how much more advanced it is than previously thought.

Err......no : it doesn't show that the project is more advanced, it simply shows that it's taking even longer to get to commerciality / monetisation than we thought.....

And Occam's razor may be relevant here, the idea that more straightforward explanations are, in general, better.

An equally plausible - and more straightforward - explanation for the 'mystery' ?

Stock photo.

ATB

Hi all,

There's been a lot of cant about research recently.

The first thing to note is that you're supposed to go where the research leads you...and not elect to report only those bits that support your worldview aka 'confirmation bias'.

It's not 'research' for instance to quote approvingly two articles from Africa intelligence re Lucien Ebata's possible sidelining and say that this likely helps debt negotiations without also mentioning a third article from the same source that explains the background to the current difficulties AND adds useful info reporting that the Chinese have stalled work on 4 SEZ's (including in Nguesso's home town - ouch !) and declined so far to foot the reported est. Euro 150m land expropriation/compensation bill for PN SEZ. [ Ed .: something that was supposed to be concluded last August, IIRC]

See here for details https://www.africaintelligence.com/LCE/business-circles/2019/02/13/tensions-with-beijing, my thanks to jay12.

ATB

……..
Second, turning to your suggestion re possible placing : 10% new shares @ 30p would only raise about US$ 9 million. I appreciate this was ‘spit-balling’ on your part, would this be enough for general running costs over a busy couple of years ? On the other hand, it’s a small enough amount for a wealthy individual or private family office to take on ……and punt money for a sovereign wealth fund or state-owned enterprise…… As the likely end-consumers, I’m sure the Chinese would leap at the chance to be ‘on the inside’ !

They could raise the same amount easily, I’d have thought, as major shareholder loans (much quicker, less admin and paperwork… but less ‘roadshow’ publicity, if that was important), or by a 1-for-10 rights issue, with over-entitlement rights, which would likely have the incidental effect of squeezing out a lot of PI’s…..

I see Mitch 984’s comment that there’s no need for a placing, GLEN could easily finance the EPP. First, this doesn’t address ZIOC’s day-to-day running costs; secondly, if GLEN were to finance the EPP, I’m sure it would want its pound of flesh (and likely more) for taking all the risk….The business world can be pretty cut throat, when it matters.

There’s been a flurry of comment elsewhere on IMF debt talks and lots of excitement about where we are on cold palletisation technology, you’ re absolutely right that we're in 'interesting times'

ATB

Hi allthatguff et al,
Thanks for bringing up a couple of good points for discussion.

First, I guess we have to take as a ‘given’ that the IP will address gta5’s concerns re commercial viability of the EPP, because it seems to me that these days only sexy internet-based ‘disruptive’ businesses can produce forecasts with years of losses and STILL get money…;->

I agree with you that end user contract finance makes sense, the logical form would be an off-take agreement…..and the logical off-taker would be GLEN’s marketing arm, if only because if any.other metal trader was approached , the first thing they’d ask is why GLEN wasn’t supportive of its own subsidiary….and the second issue they’d likely have would be commercial confidentiality.

We don’t know yet whether EPP would actually use cold pellet technology or not, ZIOC seem to have hedged their bets recently on this point. If they do, that should improve the economics/commerciality, but – as unproven technology – it increases technical/performance risk.

The logical way around THAT would be for GLEN, as obvious off-taker, to agree to a ‘take or pay’ contract, rather than the more usual ‘take and pay’ ie it would be on the hook for staged regular payments against shipment, whether the beneficiated ore was of the advertised premium grade or not.

They’d understandably be unwilling to take on the country risk elements (power, strikes, transport, government shakedowns , force majeure etc etc), but it would be a big red flag for me if (assuming GLEN is as invested in the technology as we’ve been told) they weren’t prepared to vouch for the quality of their (majority) owned production.

Second, turning to your suggestion re possible placing : ……...continued

Hi jay12,

…."Shame is if all that info was on hear I truly be leave SP would be higher, interest def would. gla…"

Eureka ! You can solve the 'problem'...,,,,,,

Over to you !

ATB

Hi Mitch984,

Voting machine or weighing machine ?

I agree the thrust of your post, but would frankly rather see ZIOC's s/p rise more moderately (but sustainably) on the basis of 'hard news' - and the facts - than to overshoot to the upside on excessive 'excitement' that only gives rise to excess volatility ( the intended result ? for some ) and, inevitably, disappointment for peeps who buy when the price has got ahead of itself....

Easily done, when you consider the small free float. Perhaps on EPP/IPIMF/SEZ news we might even attract some institutional interest , which shoul have an 'anchoring' effect ?!
ATB

Hi wellwell et al,

It looks as though we've collectively cracked a number of aspects of the turret / vessel interaction.

However, I'm surprised that there's been no acknowledgement or reference yet to the 'soft coupling' effect caused by the underside of the vessel as it rises in the swell, effectively 'sucking' the turret upwards ie the reverse of the cushioning effect that an aircraft experiences as it gets close to the ground. Or think of drawing on a badly-sealed water pump, which is what we'll have as the turret nestles inside the moon-pool.

This will reduce the variability of the tension on the rope, because it will create a sympathetic movement.

I hope one of the fluid dynamic experts amongst can contribute to this weighty matter.

ATB

This hare can run and run....

Hi all,

I look in intermittently and wade through all this earnest debate with bemusement and 3 quotes by Mark Twain spring to mind :

"“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.”

"“To succeed in life, you need two things: ignorance and confidence.” and

“The trouble ain't that there is too many fools, but that the lightning ain't distributed right.”

Which leads inexorably to a 4th :

“It is better to keep your mouth closed and let people think you are a fool than to open it and remove all doubt.”

It would be good to see so much heat turned into light.

ATB

Hi No1SS,

…"Iron Ore movement into deficit.....
Right place, right time...."

Not for ZIOC, unfortunately. Your twitterlink and your own subsequent comment show that ANZ foresee the market going into deficit "in the short term", which you have quantified as " a couple of years" ie BEFORE we are in a position to offer meaningful production, which is optimistically 3-4 years away.

As one of my colleagues used to say about misplaced enthusiasm in the face of facts : " Interesting.....but irrelevant"

If you disagree, I'd be genuinely interested in knowing your reasoning, in case I've misunderstood the timelines we're looking at for iron ore deficit and ZIOC's production capacity to supply.

ATB

Hi all,

Just a fact-based contribution to this discussion, taken from the 28 Dec 2018 RNS :

"..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"

The company itself is guiding the market to scale down its expectations, leaving itself plenty of wriggle room re timing. The reference to the POSSIBILITY of the EPP solution should be telling people that this is a sideshow, whilst we await macro developments.....and no, I don't mean the current blip in the premium grade iron ore price.

HTH and ATB

Hi all,

Looks like a glitch to me :

Tanker
Flag Curacao
Destination CROMARTY FIRTH
ETA Jan 20, 23:00
IMO / MMSI 9190028 / 306811000
Callsign PJEC
Length / Beam 232 / 42 m
Current draught 10.2 m
Course / Speed 321.0° / 1.0 kn
Coordinates 60.17533 N/3.79083 W
Last report Feb 2, 2019 21:31 UTC
Newer position via Satellite

Look at the ETA date....

ATB

Hi Mr Toad,

My driveway gate is 'secured' by a chain and padlock, that can move around the bars on the gate....

I think your para 2 reflects the nature of the connection. Remember : think of the turret as resembling the wheel on a home-made go-kart : a stick = axle with a ball-bearing jammed onto it. The axle is fixed to the kart chassis (and doesn't move), the outside rim of the ball-bearing does.....

Hope this explanation serves - it works for me , anyway !

ATB

Hi thestreet,

It's a bit curious that you didn't use the opportunity of your re-purchase to share the info with us at the time.
Not your usual modus operandi, I would suggest.

Enjoy your weekend.

Hi Veteran10,

..".Pantomine season is over. It's February tomorrow Sir."

Tell that to Trahar.

As to the rest of your post, you'll find that I usually provide a link to source of the facts or press articles that I state, so that any reader can evaluate for themselves.

It's surprising (well, maybe not) how few replies do the same.

Have a nice day.

Hi No.1SS,

Well, I'd call that 'fact-free' good news !

ATB

Hi No.1SS,

..."on the cusp of starting production."....

As a matter of interest, when do you expect ZIOC's iron ore to be ready for first commercial shipment ?

The recent (temporary ?) price rises are welcome, for sure, but we're hardly in a position to benefit from them.

I'd say a couple of years before we're in a position to deliver anything remotely meaningful and we're port-dependent for significant volume.

If you have any factual basis for a quicker timeline, I'd really like to see it ! I'm as interested as the next person (maybe more so, being older - I imagine - that most investors) in seeing an early path to monetisation.

ATB

Hi shaun86,

Quite right - I didn't 'just use' a google translation : I compared it with the original and corrected google's mistakes. My only 'agenda' - if you want to call it that - is to see reflected accurately the content of an article.

If this upsets people, perhaps you should ask yourself why that might be...….and whether, Heaven forbid, they might possibly have an agenda of their own.

Unless you are a linguist (are you ?) how would you know which version was a more faithful translation ? Do you believe google is infallible ?

The link I provided suggests that people who know about these things do indeed recognise the (current) limitations of machine translation.

ATB