Member Info for Hounddog10

This is a key paragraph in the announcement:

“The Shanta Shares owned or controlled by Export Holdings, a company associated with the UBOs, including Ketan Patel (being 44,488,248 Shanta Shares as at the close of business on the Latest Practicable Date) will not constitute Scheme Shares. The Shanta Shares owned or controlled by any Bidco Connected Individual (being, in aggregate, 363,448 Shanta Shares as at the close of business on the Latest Practicable Date) will constitute Scheme Shares. No member of the Bidco Group or any Bidco Connected Individual will be permitted to vote the Shanta Shares owned or controlled by them at the Court Meeting but will be permitted to vote such Shanta Shares at the General Meeting.”

I am not entirely sure as to import. However, firstly note that Patel & co have managed to get almost 5% of the company without notification (I need to look at this more but I suspect they have hovered under overseas notification requirements). Secondly, Bidco Connected Individuals seem to own 363k shares (over 30% of the company). I don’t understand (a) who they are; and (b) on what basis they have avoided stake building disclosure requirements. Does BidCo Connected Individuals include Sustainable Capital & Lombard? Seems unlikely. Does anyone know? Thirdly note that there are two votes with different structures - the Court vote and the general meeting vote.

Shanta will be required to hand over the same information to any counter bidder as they have given to ETC. Blue Book rules.

One of the problems with AIM is the six month filing deadline for the annual report. Main market is three months. It means in circumstances such as this they can get the acquisition done before issuing the annual report and they can then put the company into liquidation so not having to ever do the annual report. In Shanta’s case as a Guernsey company it does not need to file accounts that can be publicly viewed. The only reason it produces the annual report is AIM rules. So once off AIM no disclosure.

I suspect they must have considerably sweetened Eric’s package to get him to stay on but it is unlikely shareholders will ever see the disclosure.

Indian businessmen tend to be quite ruthless, albeit effective. There is little respect for shareholders, particularly Western ones and Western management tends to be discarded at a certain point in favour of close associates and family. I have seen it happen before.

They can continue to buy shares (some restrictions) but if they buy over 13.5p then that resets the offer price. I would be sure the share purchases count for the vote.

They have got 19.18% of Voting Scheme Shares (some shares ineligible to vote as conflicted) in the bag. That is of the total share count (less ineligible shares). Then whatever they are picking up in the open market.

50% for contractual takeover (ie more traditional route) but 75% when you are using a scheme. Here they are using a scheme.

They will get the formal offer document out probably mid January (they have max 28 days from today) with a clear timetable. Then it will be 23 days from the date of the offer document to the EGM vote. So around first week of February.

Everyone should remember that they need 75% - but it is 75% of those who do vote - not total number of shares.

I suspect the issue lurking in the background is Ketan Patel. His business and political contacts will be crucial to be able to operate in Tanzania. If he is not on board or wants something else he is in an ideal position to get it. Perhaps that is why the two big shareholders are getting out.

Yes, but they are doubling down on Shanta exposure many times over. I think that they have been planning this for some time. I suspect they wanted to see Singida up and running to derisk their position. Note that the confidentiality agreement kicked in at end June, the first month of Singida commercial production.

The three bids last year were no doubt very unwelcome. It would be interesting to know the indicative bid prices - which were rebuffed as being significant undervalue.

They have been working on this for six months. Shanta and ETG signed a confidentiality agreement on 29 June 2023. Not sure why it took so long to arrange the bid - perhaps sorting out the necessary borrowing for Bidco was the constraint.

A lot of nonsense in the announcement about not being able to raise money at a suitable price to fund expansion going forward. Perhaps the lawyers should have watched Eric’s last few webinars where he has been absolutely adamant that there would be no placing. I see also they are citing the 16% free carry and VAT receivables as negatives whereas Eric has always pointed to positive outcomes on these.

Yes, I think Eric’s position here is curious. He has said that his Shanta shares are his biggest asset and he has worked for a decade to acquire them. He does not appear to be overtly accepting the offer (it seems that Sustainable Capital and Lombard are selling out). I can’t understand why he would sell out at 13.5p unless he is being forced or is involved in the new vehicle (but I would expect that to be disclosed).

Although, I don’t specifically know whether d2w has PFAS chemicals I would very much doubt it as (1) it is an additive into plastic (it might be the plastic has PFAS but that is a separate decision of the manufacturer outside the introduction of the additive); and (2)The Oxomar study, which looked at biodegradation of oxo bio degradable treated plastic in seawater, also concluded on toxicity saying there were no toxic effects.

https://www.biodeg.org/subjects-of-interest/agriculture-and-horticulture/the-marine-environment/

For d2p that has been approved by the US Federal Drug Administration for contact with food. The FDA operates to very strict standards and will have looked at any aspect of d2p that is harmful.

Sorry if already posted. Quite interesting article in The Times on banking hubs which now seem to be taking off. Appears to be about 40 currently with plans to open two a week going forward. Labour is looking for at least 350 and Link (cash machine people) estimate if branch closures accelerate that 1,000 could be needed.

FCA reckons it costs £617,000 to run an average bank branch but £184,000 to run a hub (set up costs £303,000). Nine major high street banks involved and also smaller ones.

Also investment going into post offices to better cater for, particularly, small business cash needs.

Potentially helpful savings for Lloyds. They have around 1,100 branches (always coy about the figure). Say close just 500 (Lloyds going at 100-150 branch closures a year) then £300m plus savings. If 1,000 hubs open at a (rounded up) cost of £200,000 per year per hub then £200m shared between at least nine banks. Even if Lloyds takes, say, 20% of overall costs based on market share then only £40m. Peanuts. Also I suspect there is a lot of head office bureaucracy controlling the branches that can be dismantled.

People have a good experience of the hubs (nine out of ten recommend). Hubs will allow banks to close branches without the political fallout. Looks largely win win.

Have always been surprised that hubs slow to take off but I guess banks were worried about contaminating the brand and saw branches as sales outlets (but sales are really online now).

https://www.thetimes.co.uk/article/two-new-banking-hubs-a-week-planned-to-keep-cash-alive-enterprise-network-7kvkxf8m2#:~:text=To%20reach%20a%20target%20of,a%20year%2C”%20he%20said.

Lloyds was effectively coerced to buy HBOS although they put their head in the noose. In around August 2008 there was an evening reception in the Fine Rooms in Spencer House (home to Lord Jacob Rothschild’s investment businesses - although I think that was entirely incidental and he and his firm were not involved). The Fine Rooms are rented out for functions. Brown and Daniels were there. Brown was desperate to not have another bank go down on his watch and Lloyds had long coveted HBOS as a means to grow, given Lloyds had reached the limit of UK organic growth. The problem was opposition from the competition regulators. Brown indicated that that path might be eased in the future.

Matters started to move fast in mid September 2008 when Lehmans went down and a very serious run started on HBOS. With only around a day of diligence (PowerPoint presentations from HBOS business heads) Lloyds made an offer. Subsequently, after a great deal of pushing, Lloyds’ Risk Team got access to look at HBOS’s loan book and discovered the full horror of the situation. Lloyds started to get cold feet and got to the point of drafting a press release backing out of buying HBOS.

By mid October 2008, in what became known as the Recapitalisation Weekend, all UK banks were being advised by the Treasury/BoE of the extra core Tier 1 capital (essentially equity) that they had to raise to shore up their balance sheets. Despite being the bank with the most conservative loan book Lloyds got a huge requirement, way beyond what was needed and very dilutive. Lloyds management were furious. However, the government said if they bought HBOS they would substantially reduce that requirement. So, in other words, if you buy a dog of a bank we will let you off with a lesser capital requirement. So Lloyds took the gamble - that the HBOS loan book was not as bad as they thought.

And Lloyds lost. Which is why around 60bn of extra shares (through the post acquisition share offers to recapitalise HBOS, particularly the mammoth 2009 rights issue) that were never anticipated, came into being and are being bought back today.

History really but shows how much banks are political footballs.

Eric has said that what they are working on is effectively a BFS done to the Canadian standard. I would guess it and the permitting application might be ready end Q2/Q3 next year. Eric has said permitting would take 3-4 months. That is the bit that I think is harder to predict as permit approval will be the best opportunity for the politicians to get their paws into the cookie jar.

Yes, I rather took that from Eric’s comments. Singida could be a lot bigger than first thought. It quite possibly will become the flagship Tanz mine for Shanta quite quickly. Eric also pointed to visible gold in drill cores done in around 2014 and said somehow this was overlooked at the time. Underlying his comments is, I think, the fact that due to cash constraints the initial drilling done at Singida was the minimum needed.

Online sales have held up quite well until August but then:

“Non-store retailing (predominantly online retailers) sales volumes fell by 2.2% in September 2023, following a fall of 0.9% in August.”

See Main Points and Figure 4. My guess is that H2 will be quite tough for RM financially. However, it may give them some time to operationally bed in the parcel superhubs and sort out QoS.

https://www.ons.gov.uk/businessindustryandtrade/retailindustry/bulletins/retailsales/september2023

Https://www.investormeetcompany.com/investor/meeting/shanta-gold-q3-production-and-operational-update

If you are not registered with investormeetcompamy you may need to do so to access the link. It is free. I liked Eric’s “Shanta” shirt. Not seen that before.

One point that came out of the webinar was that Shanta is interested in recently returned licences. As my internet cut out at that point I did not quite catch what it was but I think it is probably the licences for the SMP gold project which were previously owned by the TSX company Winshear. They had the (retention) licences removed from them without compensation under the 2017 Mining Act and have now, in the last few days, won $30m through international arbitration. The licences are back to the Ministry of Mines to be reoffered and Eric said that Shanta was straight round to the Ministry to show their interest.

I may have misinterpreted this so I will leave it for others to correct me.

From Winshear website:

“The SMP Gold Project covers a 200km2 area in the Lupa Goldfields, SW Tanzania and is adjacent to the New Luika Gold Mine, operated by Shanta Gold Limited, an AIM-listed company. On March 26, 2015, Helio released a mineral resource estimate for the SMP Gold Project, comprising an Indicated Resource of 7.5 MT grading 2.4 g/t Au for 590,000 oz Au contained, and an Inferred Resource of 0.56 Mt at 2.5 g/t Au containing 45,000 oz Au.”