Member Info for Jiving

Exactly what I thought when I saw they had only some $80k cash - an absurdly low level tbh. The weekly payment option allows for a very precise level of financing if Elphick is fine tuning things to minimise dilution prior to news. Also after the 1 July placings there were only some 4m+ left of tranche 1 for Shard to place, which I reckon they must have pretty much gone through by now.

ATG that is exactly how I interpret the large Shard-like trades that have gone through in October. The latest Shard facility first tranche had a weekly payment option incorporated in it to allow Elphick to fine tune finances down to that level.

Today's low of 4.195p is around 80% of the price ultimate insiders, Glencore/Elphick, paid (5.25p) for their recent top-ups.

A few interesting quotes from that article:

"Deals worth $28 billion are expected to be announced at this year’s Future Investment Initiative, said FII Institute CEO Richard Attias."

"Regarding the potential deals, he mentioned that the number of partnerships expected to be announced at FII8 is growing, stating, “we are still finalizing several agreements.”

"The summit is committed to fostering positive change through effective solutions across various domains, including global connectivity, MINING, AI, health-tech, sports, the circular economy, food, economies of the future, art, culture, and other key areas."

Thanks always, that is very interesting timing. I have always felt that IF the Saudis are the key strategic investor in Zanaga they will want to PR it to max effect, and a Saudi conference is the ideal venue for doing that.

I had hoped for news at the Future Minerals Forum in Jan 2024 & of course that didn't happen then, but this Future Investment Initiative is another similar opportunity. And the timing tallies with all the corporate signals we have had since end-June 2024 suggesting 'something' is imminent.

The 400k at 8.33 looked like a Shard trade, the others I dont know. Maybe chartists bailing out because their breakout didnt happen?

Thank you, of course I will take your word on that, you have always been so trustworthy in the past.

Hey Un_Known, care to comment on the rumour that you are Arthur Millholland 'in person'? And that the reason you are continually pointing the finger at Anavio & Co is to draw attention away from Arthur Millholland & Co.

Thats an interesting development in Zambia, Extrader. I wonder if the switch away from the Chinese is due to any actions of the UAE or rather the Zambians being pushed away from the Chinese by the US & their railway infrastructure project linking Zambia with the Angolan coast?

Interesting stuff MM, I completely agree we dont know the details, & the lack of PR/IR is horrific & inexcusable - other listed companies are in delicate discussions and still manage to respond to investors.

There are so very many details we dont know, we are truthfully all in the dark & frankly tend to favour the outcome we are personally looking for - to be clear I want a full buyout, but I will accept whatever I am given! Coincidentally I do believe we are heading to a full buyout (less likely but possible a 20-30% equity stake) quite possibly from a Manara led consortium. And that a straightforward, essentially detailed financial/legal due diligence exercise would take place before any announcement. This pre-transaction due diligence is typically undertaken by someone like Linklaters & for a single asset pre-development company like ZIOC that process would typically be either side of 2 months.

The problem with the financing outline you gave is that our equity is essentially zero ($80k in bank) & the IPO proceeds are long gone & the share price is so crashed out we cant raise any serious equity capital without catastrophic dilution. If the share price were still GBP2 a share that would not be the case, & we could potentially raise equity funds to kickstart the project without horrific dilution. We might possibly be able to kickstart EPP via offtake but nothing as substantial as Stage 1, and if they were going for EPP they would surely have started by now (or 5-6 years ago when it was first mooted).

But is the company seriously going to undertake the development & operation of the giant Zanaga mine as a standalone company - even back in IPO days that task was allocated to Xstrata. This is the second issue I have, I dont believe the 'Just Marty' plan is realistic and that any Stage 1 strategic investor - equity or offtake - is going to want a major mining company assuming responsibility for development & operating the mine (ie someone like Vale or a Chinese entity). Again this propels me in the direction of a full buyout whereby the buyout co-ordinator (Manara or Baosteel) also includes in any consortium a major mining company to assume responsibility for mine development/operation. Glencore's offtake arrangement would likely be swapped for a small royalty payment - an arrangement they have accepted before.

I am also in agreement with you that corporate events since late June all point to a company/management preparing for an imminent deal. I would also add to your list the alteration to the latest Shard facility allowing for weekly funding instalments payable by Shard - that is really fine tuning company finances! But I am anticipating a full buyout from a 'single' entity that most likely would be a consortium of equity & offtake investors & would include a major miner as developer/operator. Here's hoping we get news by year end & see whose prediction comes right - tbh I dont care, so long 'something' happens!

Relations between UAE & China are so close & substantial, it seems quite likely they would co-operate rather than compete with each other vis projects like Zanaga. There is an awful lot going on in the Saudi/UAE-China space at present, some of which has clear implications for our project.

MM re due diligence. Traditionally 'due diligence' has been associated with a legal/accounting examination of a target company by another company just prior to taking them over, or entering into a major transaction with them, such as a JV. For ZIOC, our accounts & operations are so small & simple that would be easy, the legal side would likely examine licenses, the mining convention etc.

However, over the years the concept of 'due diligence' has been expanded to cover detailed examination of a target company prior to any immediate takeover. For a mining company this might include an independent appraisal of the geology & potentially random sampling from the drills. If this wasn't done beforehand it would likely be undertaken in parallel with the legal/accounting due diligence. For a single mine company like ZIOC I would have thought due diligence would take no longer than 2 months.

Another reason for a delay besides due diligence, might be the formalising of a consortium's legal form & ensuring all participants are in agreement & have the funds to pay when required. A number of us have speculated about Chinese involvement - the downside might potentially be the time taken to obtain approvals by a state entity like Baosteel. But if the Chinese requested extra time, realistically who could/would deny it them?

I agree MM, I think we are better positioned than the worst of those discount scenarios. The key port & power infrastructure is essentially in place; the environmental study has been completed & all regulatory matters settled ie license & mining convention; & the ore is of a quality/type that is actively sought by the future green steel market. The mine has also been prepared for immediate rapid development, essentially being at the FEED stage based on a current 2024 FS, that reduces the lead time to production considerably.

There is also the issue of which NPV - 12m or 30m - is the basis for discussions. I can see Stage 1 being the basis for the sale of a minority buy-in; the scenario where we sell 20-30% to kickstart the project, leaving current shareholders with 70-80% of the project going forward (ie still benefiting from Stage 2 & future expansion). But for a full buyout of 100% of the mine, could arguably be based around the Stage 2 30m project NPV as current shareholders would be forgoing all exposure/benefit from the project going forward.

At the end of the day frankly we have to accept whatever an interested party is prepared to pay (particularly if there is only one serious bidder, which I suspect, namely the Saudis). I have always felt a $2b valuation (over GBP2 a share) would be a good outcome, however you want to present that in terms of discounts to NPV. Not to say I wouldn't welcome a higher price....

I put this question to ChatGPT: "What discount to net present value do undeveloped iron ore mines fetch?"

The discount to net present value (NPV) for undeveloped iron ore mines can vary widely based on several factors, including:

1. Location and Accessibility: Mines in more remote or less developed regions may have a higher discount due to increased costs and risks.


2. Market Conditions: Current iron ore prices and demand can significantly impact valuations. In a high-demand environment, the discount may be lower.


3. Regulatory Environment: Permitting and environmental regulations can introduce risks, affecting the NPV.


4. Operational Risks: Factors like geological uncertainty, infrastructure needs, and potential operational challenges can lead to a higher discount.


5. Timeframe to Production: Longer lead times to production generally increase risk and can lead to a higher discount rate.


As a rough estimate, undeveloped mines might see discounts to NPV ranging from 30% to 70%, but this can vary widely based on the specifics of each project. For precise valuation, detailed financial modeling and risk assessment are necessary.

Has anybody secured access to the MEED article regarding the potentially crucial info on the October date: https://www.meed.com/october-deadline-for-ras-al-khair-steel-plant. ?

I signed up for a trial ac but it did not give access to that article.

The critical thing for me is we have the two parties tasked with acquiring iron ore by their respective governments (PIF/Manara & Baosteel) sitting in the same room working on the same JV. Given that we know both parties have been in close contact with ZIOC since 2023 & have all the relevant details of our mine, it seems a reasonable extrapolation that we may be part of their grand plan.

The key point I took from MM's links yesterday was the October JV deadline, which marries closely with the kind of activity (& inactivity - ie Glencore not filling their spare BOD seat) we have seen since the 1 July placing & the calculated manoeuvring that took place then re-topping up shareholdings (think 75%+1) . Add in Marty's options package and we seem lined up for an October surprise. The Saudis & the Chinese may want to present this as a 'total' green steel package covering everything from ore mining & solar power through to actual eventual steel product. And both parties will have ownership at every stage of the process, thereby maximising economic benefits, whilst also having security of supply.

Also the proportionate split on the steel JV could be replicated in a Zanaga deal. Manara want up to 20% of projects but there is nothing to stop Aramco also taking 20%; maybe a matching 40% for Baosteel & the balance for UAE or Vale? AD Ports of course also announced port progress over the summer, so that may also tie in. If the Chinese are going to be the contractors/sub-contractors for the project, maybe they will want to be overall developer/operator as well - i.e no need to cut Vale in, if the Chinese are heavily involved?

And not forgetting on the Chinese side the announcement of the hydroelectric power plant in RoC, which has always been linked to our project, news also released post July.

The Chinese state sector is notorious for lengthy approval delays due to having to navigate the Chinese CCP controlled capital allocation process (see RTZ & Simandou last year). But now they are going on the public record cutting big deals with the Saudis (and RoC) & it would be an unthinkable loss of face for them not to come up with their portion of the finance need for a key component of their Saudi green steel JV.

And its yet more from the Saudi steel/ore related news flow that has come out since July of this year (as if held back pending the finalising of price/terms). The Saudis have the one crucial ingredient for the hydrogen based green steel process of the future - namely essentially limitless supplies of the world's cheapest solar power. But they are missing the other critical ingredient - their own secured supply of high grade ore (and the Saudis understand the importance of owning critical resources!).

Before they (& their partners) commit likely $10's billions in overall capital expenditure for infrastructure & supporting sectors, they surely wanted to be sure of that ore supply. Once they were sure they fast forwarded everything related to it - the PIF-China finance deal; the Saudi minister's trip to Vale to see first hand a giant ore mine in 'the tropics' and now the big leap in finalising their JV with Baosteel . The same Baosteel who are of course the lead state steel company mandated to increase Chinese ownership of foreign mined iron ore (by 50m tonnes for each 5 year plan: 2020-5; 2025-30; 2030-35). The Chinese economy & particularly the steel industry have been in crisis with the downturn in construction - which would tie in with the Elphick's interim statement explaining the delay due to "Volatile financial markets..".

Also it is interesting that Glencore did not announce a replacement for Denis Weinstein immediately. This is standard corporate etiquette: to announce the replacement at the same time as a resignation - particularly for a substantial corporate with management depth like Glencore. Instead it's a wooly "..consider its right to appoint...".

"Following Denis Weinstein's departure from Glencore, with effect from 29 September 2024, he will cease to be a director of the Company. Glencore will consider its right to appoint a replacement director to the Board of ZIOC in due course."

Hi Ex, indeed and as in my post of 12.28 the Chinese partners in Simandou faced similar funding 'issues' last year & RTZ stepped in and funded their portion of ongoing work until they got Beijing's clearance to go ahead. Possible to imagine the Saudis playing a similar role here, particularly if all the construction were to be contracted out to the Chinese under the proposed 2024 FS. All of which would be tied into Chinese project finance provided by some of those 6 key Chinese state banks the PFI just reached agreement with in August!

And yes it's striking that no port deal has been announced, when for nearly 18 months the AD Ports deal looked to be low hanging fruit for our first MOU.