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This is all I could dig up on Concord Atlantic, the principal (26.4%) shareholder in BSL

https://whalewisdom.com/filer/concord-atlantic-holding-ltd

.."Concord Atlantic Holding LTD is based out of Hamilton. Concord Atlantic Holding LTD is a large advisory firm with 75 clients and discretionary assets under management (AUM) of $120,000,000 (Form ADV from 2024-04-01). The firm last filed a Form D notice of exempt offering of securities on 2024-12-18. The notice included securities offered of Equity.."

The AUM of $ 120m compares to its 26% of BSL having a pro-forma 'value' of about $ 42m, and when spread over 75 clients = average $ 1.6m.

Looks to be something one might set up for friends and insiders.

AFAICS

GLA

Interesting development maybe affecting BSL, the novel 'cold pelletisation' co where GLEN, Mitsui and others (incl Trahar Senior and MinMet Australia ) have shareholdings.

A recently resigned BSL director, Julian Treger (who had / has 'significant influence or control', despite his company CoTec only having a 3 % shareholding), has just been sanctioned by the FCA for 'concert party' activity some 15 years ago :

https://www.investorschronicle.co.uk/content/b8487681-b062-5376-b609-c1566bd1807c

.."Julian Treger, who was involved in a 2009 bond purchase at the centre of the Panel's investigation into failed boutique hotel company MWB Group, runs CoTec (CA:CTH), which is closely entwined with London-listed rare earths company Mkango Resources (MKA). The two companies own rare-earth recycling business HyProMag, which is designing a magnet recycling and manufacturing plant in Birmingham. HyProMag is 81 per cent owned by Mkango, with CoTec holding the remainder.

CoTec CEO Treger also has a 49 per cent stake in CoTec through a Jersey-based trust, Kings Chapel. His total holding, including a 4 per cent personal stake, is 53 per cent, according to FactSet data.

.. Treger, who previously ran Ecora Resources (ECOR) between 2013 and 2021, was among 10 men to receive the Takeover Panel's cold-shoulder punishment, which essentially means being ostracised from the UK's financial industry. The Panel said he was involved in concealing a transaction that ought to have triggered an automatic buyout offer for MWB in 2009.

MWB once owned the Malmaison and Hotel du Vin hotels, as well as London’s Liberty department store, before going bust in 2012. The investigation centred on executives and major shareholders of the business who built up a stake in excess of 50 per cent without issuing a bid for the rest of the shares, as is required when one party’s holding exceeds 30 per cent.

The Panel said 15 per cent of the shares were represented as being controlled by Treger's business at the time, Audley Capital, whereas in reality they were controlled by members of MWB's management including chief executive Richard Balfour-Lynn and finance head Jagtar Singh...."

Rather unusually, BSL's largest shareholder (31%), Bermudan Concord Atlantic, has no Board presence of its own, the suspicion must be that Treger is - or was - its 'front'.

It'll be interesting to see who steps up to the plate.

Others will no doubt note that the FCA is slow, but still occasionally bites. Although a 'cold shoulder' is perhaps a tad 'gummy'.

Treger is yet another Lithuanian South African with a flash property :

https://mg.co.za/article/2014-10-02-opulent-beach-houses-and-the-art-of-the-leisure-colonist/

The whole article is worth a read.

Merry Xmas!

GLA

And there's more...

From today's depeches :

.."It was noted in Yaoundé that Cémac's foreign exchange reserves are dangerously low at a time when the outlook for commodity prices and international trade (over which Africa as a whole has no control) is poor.

The final report notes that salvation will come from ‘economic diversification and the consolidation of public finances’. Failing this, the Community's ‘external position’ will

deteriorate further.

A period of four months is therefore set for economic operators AS WELL AS EXTRACTIVE COMPANIES, PARTICULARLY IN THE OIL AND MINING SECTORS to undertake, by 30 April 2025, the ‘diligent REPATRIATION of foreign currency’ and to ’sign ESCROW ACCOUNT agreements for site restoration funds’.

In layman's terms, the aim is to ensure that these companies deposit the funds generated

in commercial banks in member banks in member countries so as to support economic activity in the sub-region.."

And further

.."Basically, if the announcements that some were fearing , concerning a possible devaluation

were not made in Yaoundé, the apprehensions they raised have not completely abated.

ted.

As debt servicing represents a real issue of survival for the Member States and the community, the Conference is in favour of a ‘prudent debt policy with a preference for concessional financing’, even as it ‘implores’ the partners to ‘mobilise more financial resources to support structural transformation of the sub-region's economies’.

One thing is certain: the six Member member states have an interest in pooling

their efforts to avoid any contagion effect resulting from the difficulties in a neighbour facing a social crisis. This solidarity is vital for the credibility of the whole Cemac region.."

This proposal, together with a recent crackdown in C-B on foreign exchange shops, suggests that liquidity isn't just a domestic issue (reflected in widespread salary arrears), but also a looming balance-of-payments issue.

The Cemac community are clearly looking around for some 'extractive' initiatives of their own.

You only have to hope that they - esp C-B - understand that you have to handle the goose with some care if you want it to lay golden eggs.....

Given their francophone heritage, they should look further down the line :

.."The phrase "The art of taxation consists in so plucking the goose as to obtain the largest possible amount of feathers with the smallest possible amount of hissing." is attributed to Jean-Baptiste Colbert, the minister of finance to Louis XIV of France."

GLA

Thinking a little bit more about the recent CEMAC meeting, attended by IMF (mission : global monetary stability) and World Bank (mission : poverty alleviation in 'developing' nations), where discussion re strengthening of CFA centred around bringing more financial resources (including oil/mineral sector abandonment/remediation provisions) back into the 'system'.....

(1) We've learned of the recent establishment of the FIMC, ostensibly to hold C-B Government participations in mining co's

https://www.africaintelligence.fr/afrique-centrale/2024/11/14/brazzaville-peaufine-un-fonds-d-investissement-minier,

It says something about C-B governance- and challenges to doing business - that such a fund hasn't been in place up til now .....

Some of the delay we've seen in progressing the Zanaga Project may conceivably be because there's simply NO in-country precedent for a properly structured finance package ( backdoor arrangements with SNPC don't count) and it's taken time to bring C-B up to speed.

(2) We've recently been looking at how C-B's min. 10% 'free carry' might impact any sale /investment process/consideration.

It may also figure in credit risk considerations.

(3) The Strategic Investor(s) are likely to want the comfort and protection of the International Finance Corporation (part of the World Bank Group) and / or its sisterco Multilateral Investment Guarantee Agency, for details see

https://www.ifc.org/en/what-we-do/sector-expertise/syndicated-loans-and-mobilization/miga-guarantees

.."MIGA offers political risk insurance coverage for four types of non-commercial risk: transfer and convertibility; breach of contract; expropriation; and war and civil disturbance..."

The latter two may be considered 'highly desirable' , given C-B's track record ;-<

One quid pro quo would be to see formalised C-B's 'free carry' in Zanaga as a tangible source of foreign currency to support its debt and trade import obligations : I can't see any nationalist African government agreeing to FORMAL hypothecation of assets/revenues ...but proper transparency/accountability as to their nature and extent would certainly be a big step forward in Min of Finance (and the country's) credibility....

Let's see how things pan out.

GLA

Just up on twitter, from Little Den

Long on words, short on detail, maybe something.

.."On December 19, 2024, an economic and technical cooperation agreement was signed in #Brazzaville between the Republic of #Congo and the People's Republic of #Chine . This agreement provides for a donation that will allow the financing of numerous projects that the government of Congo will have to submit to that of China, to contribute to our development efforts.

Minister Denis @ChristelSassou Nguesso proceeded to sign this legal instrument for the Congolese party while the Chinese party was represented by HE Li Yan, head of the Chinese diplomatic mission in Congo. This new agreement thus materializes the announcements made by President Xi Jinping at the 9th China-Africa Cooperation Forum (FOCAC). It will also contribute to consolidating more than 60 years of friendly and cooperative relations between the two countries.

Following the signing, both parties reaffirmed their commitment to the principle of pragmatic cooperation, advocated by Presidents Denis Sassou N'Guesso and Xi Jinping. This principle consists of transforming agreements into concrete actions to ensure effective and results-bearing cooperation. Through Minister Denis Christel Sassou Nguesso, the Congolese government expressed its gratitude to China for its constant support for the development of Congo..."

Copilot :

.."what did president xi say at FOCAC about projects in congo brazzaville?

During his speech at the Forum on China-Africa Cooperation (FOCAC), President Xi Jinping emphasized China's commitment to strengthening ties with African nations, including Congo-Brazzaville. He highlighted the importance of sustainable development and cooperation in various sectors such as infrastructure, agriculture, and energy.

President Xi also mentioned that China aims to support African countries in their pursuit of modernization and economic growth. This includes projects like the Sounda Hydropower Plant and other infrastructure initiatives in Congo-Brazzaville, which are part of China's broader strategy to enhance development and connectivity across the continent..."

Let's see what the next few days bring.

GLA

From t'other place.

Incorporates input and feedback re a possible 'deal' scenario, where a Strategic(s) bought into the Project (50%), creating the wherewithal for ZIOC to fund its share of Stage 1; pay out surplus as a Special Dividend ; and still retain an economic interest in Stage 2 and other potential upside.

If Trahar's indicated timeline runs to plan, the next few months could be very interesting.

.."Reworking the numbers for a potential Special Dividend post 50% sale to a Strategic, based on Stage 1 NPV, I arrive at £ 1.48 per share (scenario 1) or £ 1.37 (scenario 2) , based on :

(a) likelihood of a 30/70 or 40/60 equity : debt finance structure, respectively;

(b) deduction of 10% to account for C-B's MIN 10% 'free carry';

(c) deduction of $97m , being simple 10% contingency of capex share;

(d) FX @ 1.27

(e) shares in issue 675m.

As follows :

(1) Stage 1 NPV $ 3.68 billion, ZIOC 50% share = $ 1.84 billion;

(2)@ 90% (C-B) = $ 3.31 billion, ZIOC 50% share = $ 1.656 billion;

(3) capex Stage 1 = $ 1.94 billion, ZIOC 50% share = $ 970 million;

(4) simple 10% contingency = $ 97 million;

(5) [ZIOC commitment @ 30% cash = $ 291 million; commitment @ 40% cash = $ 388 million]

(6) net* cash to ZIOC (2)-[(4)+(5)] = $ 1,268 million @ 30% OR $ 1,171million @ 40%.

(7) @1.27 = £ 998 million OR £ 922 million.....

(8) with 675m shares = £ 1.48 per share OR £ 1.37 per share.

Thoughts, in no particular order (assuming I've got the maths/assumptions right):

(1) £ 1.48p is tantalisingly close to the IPO price of £ 1.56p; see (2).

(2) * The C-B 'free carry' deduction/cost arises as project progresses, it isn't an up-front outlay.

There's a case for arguing buyer (s) should pay NPV 1 ' nearly gross', not 'net of'.

(3) There's no obvious NEED on the seller's side - other than perhaps GLEN's wish(?) - to sell down as much as 50% : IF debt finance is available, there appears to be a sufficient cushion that would allow ZIOC to offer credibly to sell a smaller %age ....which would strengthen Elphick's hand if - conversely - he secretly wanted to encourage a 'full takeout premium'.

'Win, win?'

E & OE, comments invited"

GLA

Cemac and CFA FX risks are addressed in the Prospectus pp 95/6, thus :

.."Fluctuation in inflation and exchange rates

The Group’s reporting currency is the U.S. dollar. When in production, the Directors expect that most of the Group’s revenues will be denominated in U.S. dollars, while most of its in country costs will be denominated in CFA francs and Euros. The Directors also expect the Group to hold assets and incur liabilities in other foreign currencies, including the pound sterling. Consequently, increases in the value of the Euro (and consequently the CFA franc) relative to the U.S. dollar and other foreign currencies may result in a reduction in the Group’s reported profits. In addition, because the Group’s functional currency is the U.S. dollar, both at a consolidated and operating company level, the Group must translate the CFA franc denominated assets and liabilities into U.S. dollars. To do so, non-U.S. dollar denominated monetary assets and liabilities are translated into U.S. dollars using the closing exchange rate at the date of the balance sheets. Consequently, increases or decreases in the value of the U.S. dollar versus the Euro (and consequently the CFA franc) and other foreign currencies may affect the Group’s assets and liabilities in the Group’s balance sheets. Appreciation of the Euro (and consequently the CFA franc) against the U.S. dollar would cause the Group’s projected capital and operating costs (as expressed in U.S. dollars) to increase. Any of the foregoing could adversely affect the Group’s business, financial condition and results of operations as well as the market price of its Ordinary Shares.

CEMAC regulations

The Republic of Congo is a member of CEMAC. CEMAC governs and regulates the flow of funds between non-CEMAC jurisdictions and legal entities residing or having their registered offices in the territory of a CEMAC member state. The Group is required to obtain governmental consent before bringing funds into the Republic of Congo. Any failure to declare such funds could result the Group being subject to penalties and/or sanctions. This could have a material adverse effect on the Group's business, operating results and financial position..."

The likelihood of a strengthening of the CFA - and the Euro - won't be keeping many investors awake at night, I Imagine.

GLA

From today's depeches :

A Mickey Mouse accounting proposal :

CEMAC is "an organization of states of Central Africa established by Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea and Gabon to promote economic integration among countries that share a common currency, the CFA franc."

All members except CAR depend heavily on oil revenue. International reserves have dropped, and there's been recurrent discussion of a devaluation of the CFA Franc. The conference of heads of state in 2016 adopted a detailed reform program, the PREF-CEMAC, to stabilize the situation, but with indifferent success.

The CEMAC heads of state have just concluded a joint summit with an IMF delegation, on the possibility of devaluing the CFA Franc, in order to regain financing from the International Monetary Fund (IMF).

One contentious issue has been the reserves backing the CFA, half of which are held by the French Treasury. This is understandably a sensitive issue. The other half being held at the Cemac Central Bank.

It appears that CEMAC have endorsed a Big Den proposal :

.." the proposal that President Denis Sassou N'Guesso first formulated in 2016 is now supported by the Governor of the [CEMAC] Central Bank and all the heads of state taking part in this summit. ‘This proposal is to demand the repatriation of provisions set aside by the extractive industries (oil and mining companies) for site abandonment/remediation works.

Instead of being held in an escrow account account at the Central Bank, these funds are held outside the Cémac zone. We have carried out some studies of the figures and we realise that - if these provisions were held in a segregated account at the Central Bank -we wouldn't even have to talk about community solidarity to handle shocks , or the need for a coherent coherent and coordinated regional strategy to preserve the sustainability of public finances and to strengthen the external position : the Cémac countries currently have four months of foreign exchange reserves [ for import cover].

[ With this repatriation and boost to CB reserves] We wouldn't even be talking six months, we would be talking in terms of forty months, practically three years, because it's a large amount', concluded Anatole Collinet Makosso , Congo's PM..."

First, the money's in an escrow account for a reason - so it can't be 'diverted' for other purposes; second - if it can't be diverted, it shouldn't count as 'available to pay for imports'; third - the more extractive industry you encourage/enable, the bigger the eventual 'provisions' that - by your own twisted logic- will help 'balance the books'.

As for it being Big Den's idea, I'm sure he's never been near a pot of money without thinking about what he could do with it...

GLA

Good stuff!

(1) GLEN is not only connected via convertible and offtake, but has Jyothish George (its former head of iron ore marketing) on Champion's Board;

(2) Champion Iron is one of Binding Solutions' Strategic Partners

https://www.bindingsolutions.uk/partners/

and has Board representation there

https://www.bindingsolutions.uk/person/alexandre-belleau/

Tony Trahar has a shareholding in BSL and was a 'safe pair of hands' interim Director during its corporate restructuring.

(3) The 'greenness' of Kami's ore production will come from hydro, which Quebec has in abundance. Saudi , of course, will have solar.

If the Chinese are serious about Sounda, C-B would also have 'green' electricity (though perhaps better directed initially to serving the populace , rather than industry). Presumably CRBC's hydro would count toward's the Zanaga project's overall 'greenness'.

(4) Look at the IRR deemed 'investable' :

.."the 2024 Pre-Feasibility Study (the "Study"), which evaluated the construction of mining and processing facilities to produce DR grade pellet feed iron ore from the Kami Project. The Study details a 25-year life of mine with average annual DR quality iron ore concentrate production of approximately 9.0 million wet metric tonnes per annum grading above 67.5% Fe. Kami benefits from the permitting work completed by its previous owner and has an estimated construction period of approximately 48 months following a FID. As detailed in the Study, the capital expenditures were estimated at $3,864 million, resulting in a Net Present Value ("NPV") of $541 million and an Internal Rate of Return ("IRR") of 9.8% after tax, as per the first scenario based on conservative pricing dynamics compared to prevailing iron ore prices, or an NPV of $2,195 million and IRR of 14.8% after tax, as per the second scenario based on the previous three calendar years' average of the P65 index price. .."

9 mtpa of 67.5% at a Capex of $ 3.9 billion and an NPV of $ 541 million, IRR of 9.8% (base case) NPV of $2,195 million and 14.8% IRR.

'Compare and contrast'.

GLA and ATB

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