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These guys are typical of a lot of market commentators who are superficial with their analysis. It can only be that way. I suspect they do proper due diligence on their own holdings. It will be interesting to see how robotics develops in the next 2 years and whether it will jump the queue.

All noted LTB and Dundee

But one word of caution, about the value of the remainder of the money from Bridgestone -

Likely that the market will assess share value on basis of YoY momentum (i.e simple comparison of gross revenues received), and not the mental arithmetic needed to show royalty covers the development phase of translogik and SAW, hence a few choppy waters ahead over next 12-24 months IMO

Hi LTB-

I think that over next 12-24 months TRT needs to show that it is on a trjectory to effectively replace the i-track revenue - not so easy given that i-track has done better than was ever expected so something of a double-edged sword (!) - but if it can successfully do that the share price will increase handsomely.

No, that was mine - so this was not a regular 10k (see below).

I am slightly wary of the Dowgate position but (famous last words) but I think the SP should not have to go much lower than 64p and over time, this will recover well, so I am in for a few more today (averaging down). I suspect that Directors would buy at this low if they could. Plenty of news to come IMO. I like the relative predictability of embedded relationships in motor sport and aerospace (sticky recurring revenue) with the extra fizz of EV and robotics which offer a world of potential upside on the £10m to 12.5m 2030 goal.

Atg, I don't think you are seeing it right. ZIOC is not diluted! So, what if RAM gets it stolen. I am sure many here will chewr. The deal with RAM is done so it won't harm PIs with their 12.5% and 1% royalty (or 0.5% plus $50m). We are so much better off than we were a week ago.

Extrader -

The board were hoping for funding at 60p valuation. But didnt get it. How is that not a complete answer? It is possible this position has not been sufficiently marketed teseted in which case we may see a bid (soon), or alternatively the likes of RIO et al will become interested post FID and it gets flipped at that stage.

Oh, and if it does not pass FID , which possibility is discounted risk in most PI projections on this board, then what reward is there for the jump taken by a few individuals being prepared to make a $25m gamble. Like it or not, 10% break price is also payback for that gamble. No other market interest in ZIOC that I know of (yet), not least interest at better than 90% discount to NVP

GGG and others please set out why you think (evidence please not supposition) why I've got it wrong. I am prepared to revaluate but cannot see any good sense in litigation.

To think Zioc is not extremely risky without funding is a crazy idea. Heeney etc... are taking a $25m gamble and for that they will get an opportunity to sell on or build the mine. That's how strategic investment works in my view. If it comes off and we get to a +ve FID decision ZIOC will be worth 10x today. And a double will very likely come sooner. Its a blessing IMO and I can only understand the reaction by reference to the unrealsitic expectations which had built up before the RNS

Yes - ZIOC dilution is 13% in the exchange scenario, with the FEED stage all paid for. We really don't want this as investors as it will again be a rudderless ship, and ZIOC will need a low-price placing to keep the lights on.

No, if they don't pay tranche 2 they don't get the other 67.5%

Reading through some of the earlier comments on this board I believe a few investors have misinterpreted the exchange proivisions. And if RAM cannot finance it themselves, they can give away some of THEIR OWN equity in Jumelles. That's how this deal works. ZIOC is not diluted (fact) and it won't need to dilute to raise its equity share ($125m) of the construction costs. The deal is structure this way for obvious reasons. A lot of pants in a twist because ZIOC does not get to keep 30-40% of the project but IMO that was always a tad optimistic and regardless, 12.5% of a working mine is worth a fortune to us investors. Given where ZIOC is otherwise situated, if this deal doesn't come off, I hope it does work, and believe we will all do very well. We are now aligned with the money.

No that's rubbish, the exchange rights are only relevant if RAM does not complete Tranche One and Tranche Two closings within a defined period. ZIOC gets back 100% of Jumelles at 15p a share in that situation.

Moneyman64 - R

AM do NOT get 87.5% of ZIOC. That's their share of the project. RAM do not own ZIOC and cannot just "take it private".

GGG

"ZIOC share of 12.5% is non-dilutable.

- False. Re-read what they are doing. They have rights to dilute, and have even stated up to the current holdings. Next you'll be saying that we weren't diluted. Hilarious how they said that and thought private investors wouldn't recognise they can potentially lose 90% of the asset that THEY OWN for peanuts."

You are talking rubbish. ZIOC is taking 12.5% of the project!

Extrader you seem to be talking nonsense there. The tranche 1 money is staged so that the money is provided as required to support FEED, and they can abort after the thitd payment if it doesn't go to plan. That's when the 15p exchange kicks in.

Agree with you beardozer. If it's such a rotten deal then we will see some action, and if not, we wait it out for the rewards.

Thought for the day: Are we not the greedy ones?

Don't agree with you glenmorangie because the SP has risen 25% before the deal as a result of frenzied buying by PI's on the expectation (it seems) of an instant pay day. So now we are back to trading at 5% of NPV.

Now maybe I am the one who is dreaming but provided this goes forward then it’s an upward trajectory for the share price from here on in. It all looks reasonable to me and for the first time ever there is a clear path towards a funded mine construction which is vital.

As I see it the risks which are now being highlighted here are the same risks that were always present, but in fact, the key “shafting” event has now taken place so I think the above holds good, provide the project is a good as we all hope (FEED will tell us that…..) and provided it runs to budget and on time (those are always big risks, but no change there).

Bear in mind too that RAM with its 87.5% slice of the pie faces a disproportionately large risk on the construction costs if they overrun - that key risk to the investors has not had a single mention here.

Nor is there barely any mention on this board that the mine will not pass through to a final investment decision (FID), though of course that’s a risk which should never be discounted, and if so, ZIOC effectively gets back the RAM 20% stake at a cost of 15p a share. I don’t want that to happen especially because I think ZIOC will be trading on a valuation of more like 2p per share without a clear path or suitor (but it would be a good investment for the very brave or foolhardy).

That scenario is an ever-present risk whatever deal is done now, whether it be RAM or anyone else. I am discounting an outright sale of the company at this early stage. I also discount the idea ZIOC “just needs to get $25m to get through FEED” as this sort of fundraise would be simply enormous for ZIOC and would probably dilute the company by 50% or more anyway, which gets us nowhere. I like the fact that we have a plan, and the shares are good value IMHO.

Hi thestonedrose –

This is to provide you with my own personal thoughts. Please don’t rely on them. IMO ZIOC is still a high-risk gamble but one that is better than it was. You ought to do your own due diligence, and check my maths (!), but I hope this helps you see it from another perspective. You will note that not even GGG advocates selling.

Firstly, your holding is not ‘small’ so don’t be put off by those who talk of having staked much larger investments. It is worth about £10,500 at today’s prices (170,000 x 6.22). We all win or lose in the same proportion….

If RAM proceeds to second base, you will receive a share of the $125m tranche 2 cash if ZIOC gives it away. That’s 11p a share or £18,700 to you in a one-off payment. A good start. You’ve still got your 170,000 shares.

I hope ZIOC doesn’t give away the tranche 2 cash as I want it to use the $125m to pay its way on the mine construction costs, which should enable it to retain its 12.5% share of a working mine. That’s the corporate plan.

I think RAM is likely to buy off half the 1% NSR royalty for $50m which gives you another 4.4p per share pay day, or £7,480 on your 170,000 shares. That would “only” leave ZIOC shareholders with a 0.5% NSR royalty in a 30Mtpa working mine. ZIOC would also own a 12.5% share of that mine unless the tranche 2 cash was distributed (or if the construction costs exceed budget this could also reduce this percentage).

A 12.5% stake is worth a whole lot. Based on a $2 billion project EBITDA, ZIOC’s share would be $250m pa, or 22p per share in annual earnings. That’s a return of £37,400 per annum on your 170,000 shares.

As for the royalty, at 30Mtpa production and an assumed iron ore price of $100/t, a 0.5% NSR would generate an additional $15 million per year in high-margin cash flow. That’s another £4,420 per annum on your holding.

You’ve still got your ZIOC shares too. The company could easily be worth somewhere around $1bn if it was throwing off that kind of annual dividend, so worth probably more than 100p per share. ROC is a high-risk jurisdiction so its trading at 5% of that NPV today, which is probably right. But equally that’s no change of circumstances from when you chose to invest.

I believe a relatively ‘safe’ valuation of your shares would be around 15p from when the tranche 2 funds arrive based on RAM’s slice of 87.5% costing it $125m, and maybe 5-10x today’s price when we bank the money to build the mine at FID. Some investors will sell at that point and not wait for the mine to be built. I think probably the most invested/ disgruntled investors here were thinking that pay day would come much sooner, hence the immense level of disappointment (I get it!) but which personally I do not share.

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