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Vet10 my hunch is that Elphick/Glencore will have indicated to potential strategic investors that they effectively control 75%+1 shares in ZIOC. This in practice (partic under BVI law/regulations) gives them 100% control of the Zanaga asset, so they can agree a price for 100% of ZIOC/Zanaga & have the votes to pass that at an EGM regardless of the views/votes of other minority shareholders. So a strategic investor should negotiate with them as if they were dealing with a 'private' asset owned by Glencore/Elphick; which in the mining industry would mean negotiations based around NPV from a current FS. IF they realistically have effective control of 75%+1 of the share capital, it means a potential acquirer cannot buy a blocking vote which would have been one means of them gaining leverage.

One possible angle for strategic investor seeking a full buyout would be to buy up to 3% prior to the announcement of a bid & then buy in the market after that to build as much of a holding as possible (subject to regs of course) in order to average down their effective in price. Imagine they negotiated a GBP2 buyout price with Glencore/Elphick/Others for their 75%+, if they managed to accumulate 10% in the market at an average price of GBP1, that is a clear 'saving' for them. I wondered who took that 14m block in July & whether this might have been part of the overall deal.

If the Chinese are suffering a temporary delay in funding approval, it is noteworthy that it would not be the first time. This time last year RTZ had to fund their Chinese partners share of preparatory work on Simandou as well as their own. Then the issue was post-Covid economic slowdown, now the issue is construction/steel industry problems. This is how Reuters described it in Sept 2023:

"[RTZ] has so far spent more than $500 million on developing the project that should have been split with CIOH, due to a delay in the Chinese consortium getting state approval on the financing, the sources said.

CIOH is 75% held by Aluminum Corporation of China (Chinalco) and 20% by Baowu Steel Group, with China Railway Construction Corporation (CRCC) and China Harbour Engineering Company (CHEC) each holding 2.5%.

"The worry is that if their (Rio's) partners don't get approval from China on their funding, the money will deplete," added one of the sources, who declined to be named because the information is not public."

"Most Chinese companies are backed or owned by state entities, their financial approvals complicated by convoluted structures amid an economic slowdown that has seen the world's second-largest economy struggle after a brief post-COVID recovery."

https://www.reuters.com/markets/commodities/rio-tinto-shoulders-simandou-iron-ore-bill-chinese-funds-delayed-sources-2023-09-18/

And the huge PIF-China finance deal announced early August 2024 (timing!!) is a 'up to $50b debt/equity investment' agreement by PIF with 6 Chinese financial giants. These specifically include construction & export-import banks:

"Saudi Arabia's sovereign Public Investment Fund (PIF) and six of China's top financial institutions have signed investment agreements totalling US$50 billion in a move that significantly strengthens financial and business ties between the two countries."

"The agreements are with Agricultural Bank of China (ABC), Bank of China (BOC), China Construction Bank (CCB), China Export and Credit Insurance Corporation (SINOSURE), Export-Import Bank of China (CEXIM) and the Industrial and Commercial Bank of China (ICBC), the PIF said in a statement on Thursday."

https://finance.yahoo.com/news/saudi-arabia-wealth-fund-signs-093000442.html

Nibj I think that is correct, and the main economy being currently affected by financial instability is China (property/financial). But China has also recently announced the development of the hydroelectric plant in RoC at substantial overall cost - that surely has to be for a purpose? Perhaps the Chinese would prefer to share investment risk/rewards with the Saudis & still get the construction/utility contracts?

And in reality the obvious market that has been volatile recently has been the iron ore market - until the last few days relentlessly downward. This RNS exhibits a definite change of tone from the self-congratulatory one regarding Marty's option award. The downward iron ore price is causing financing problems for not just iron ore producers but was itself started by decreased profitability of Chinese steelmakers - if these entities were involved in a ZIOC bid it clearly affects their ability to pay. This article quotes a Goldman report stating they estimate only 1% of Chinese steel producers are profitable:

"Here's the most stunning chart from the report. It shows that only 1% of steel mills in China are profitable. As profitability collapses, hot metal output declines" [and as hot metal output declines so does iron ore demand]:

https://www.zerohedge.com/commodities/chinese-steel-industry-warns-flash-pan-recovery-if-mills-ramp-production-amid-severe

US and other interest rates are going down.

This seems to be the key sentence:

"Furthermore, port infrastructure discussions continue, and strategic partners remain interested in the Project. Volatile financial markets have delayed our engagement with these entities but we continue to remain positive on the potential to secure interest in the project in due course."

I dont see how "Volatile financial markets" (what's that - no major market collapse recently?) would affect say the Saudis if they were the prime contender but serious Chinese economic problems would certainly impact a Chinese bid.

Or are Elphick/Glencore being unrealistically greedy again?

If 'any' 002 deal gets announced next year, the folks who bought in at 0.05-0.07 will be looking at incredible multiples - possibly approaching 100x. That strikes me as a pretty acceptable binary bet.

Indeed marcus and the Daily Mail insider story was one of the factors pointing to a key event occurring around 1 July, that also led to the Glencore debt repayment, a big chunk of money raised to fund corporate activities & the mystery purchaser of 14m shares (was this a goodwill gesture to a strategic investor, allowing them to partially benefit from the low share price relative to NPV?). Culmination expected 'within a few months' from 24 June publication date - & we are now in month 4!

Always good to be in agreement with fellow posters! With the benefit of hindsight, my hunch is we have had two lapses in the negotiations with the Saudis most likely over price/structure differences. The first in Spring 2023 which led to the launch China oriented 2024 FS and had the effect of both updating our FS & potentially drawing in a serious competitor. The second as you suggest at end of March 2024, and which eventually led to the distribution of the 2024 FS to interested parties & Marty's marketing trip.

It was this that I believe potentially sparked a final successful offer from the Saudis around end June 2024, that has been fine-tuned & documented in the period since - culminating in an event (definitive documents awaiting the Saudis finalising their consortium agreements ? Complicated if it includes a mine development/operating contract with Vale!) that led to Marty's option award. The equity investors in the Saudi consortium may want to see the overall JV deal price/structure before finally agreeing to a ZIOC buyout.

It is legally possible but unlikely given the public statement - clear certainty comes on the vesting date. It could be of course that we are awaiting a strategic investor putting their contractual & funding requirements in order prior to an announcement - I speculated on the other board that if the Saudis were putting together a consortium this would require time to finalise - but that there is an end date to that process already agreed in advance, and it is before 1 November.

"..by post parties." should of course read "..by both parties."

As ever MM the rationale for the 2-stage grant is speculation on both our parts. There are no publicly stated conditions related to the vesting of the second stage of Marty's options, but there may be non-public conditions attached & understood by post parties. Options that become vested cannot be 'taken back', but a BOD can cancel or change the terms (including the vesting date) of any unvested options - including Marty's - up until 1 November.

Well MM we are in agreement that the Marty option award is very positive news regarding an imminent deal - of course we dont know what deal: from a full buyout to a FEED investor.

Clifford Elphick is an extremely calculating corporate financier & he keeps an exceptionally tight control over the share capital - BVI corporate law gives the BOD considerably more leeway than their UK equivalents. The previous option award was straightforward the ZIOC country head got 3 million options at a premium to market of some 40% ie @7.5p, all seemingly vesting immediately. So why has Elphick made Marty's a two stage process, I dont see tax being an issue here as the dates are too close & dont tally with any obvious tax year. So what is the reason of the 2 month gap (of course we don't know, it's all speculation) but I am sure there is a purpose in Elphick's staged vesting of Marty's options even if the details are not public.

Ed,

Nice to see old faces still posting after all these years. Always appreciated your oil market insights.

Well IF Exxon was still interested in autumn 2023, they were putting themselves in the middle of a troubled situation that had seen the Chairman & another senior Director resign; Arthur out as President & CEO of the main company and shuttled off to the US subsidiary. The bondholders were seemingly calling the corporate shots & secured lender Summit was always in the background. It was already a mess & 'apparently' they were still interested & in negotiations given those circumstances. Similarly IF they were in lengthy negotiations then they were doing so in full knowledge of the undeveloped state of the assets. If assets you were interested in become available in essentially a bidding contest with set participation dates, it focuses the attention of even the slowest corporates. The Canadian court process has now completed & Summit have clear title, so barring any challenges the assets when they were available for a bid in spring 2024 were unencumbered of COPL, Anavio & had a bid been accepted also Summit.

I read the BP submissions & the responses. My take was it was likely someone at BP had taken their eye off the ball, and as a result they had lost out in the creditor pecking order. So their objections were primarily tactical to secure a negotiated settlement with Summit, which they got and lo & behold their principled objections disappeared. I was actually surprised Anavio didn't make some kind of similar play at the hearings.

Un_Known: "Exxon Mobil had a clear reason for being ready to sign the deal."

If Exxon were so keen on the assets in autumn 2023, why did they not bid for them 6 months later ? They could have had them totally free of COPL, Anavio & Summit.

The poster we believe to be the reincarnation of Aim 4Utopia was NFTs.

Hi Extrader, Marty's 2-stage option deal also caught my eye - maybe second part vesting once deal is announced & unconditional on both sides (which also may give us an idea of time scale)?

If the Saudis have been engaged in prolonged haggling with Elphick/Glencore, but are firmly committed to the deal, they would not want to reveal their firm commitment publicly to the 'other side'. So many of the JV preparations may have continued in the background unannounced & were only made public after Zanaga price discussions ended with agreement in July.

I have had a brief look at a BVI corporate finance timetable post announcement of a takeover/merger/mine sale & I reckon it around 3 months from announcement to shareholder payout. If the BVI equivalent of a Scheme of Arrangement is the chosen path, the main uncertainty would be the speed of the court assents. UK process is way longer more like 6-8 months due to court overload.

Prior to Marty's award, the options granted in October 2023 to the ZIOC country head were 3m @ 7.5p. (cost = GBP 225,000)

I interpreted Marty's option award as being essentially a success fee - hence the nominal 0.01p exercise price: cost = GBP150. Is this his sole remuneration? And of course success fees are paid on success, which I hoped would be agreement in principle on price/terms with a strategic investor ("shake on it"), and/or agreement on contract terms & accompanying documentation. ZIOC's corporate affairs are tidied & ready to go; but if say, the Saudis, are finalising terms with a JV/consortium we may be awaiting the culmination of those negotiations prior to an announcement.

IMO this would tally with various Saudi announcements post end June: the Vale iron ore visit by the Minister; & the China finance/project finance deal. And with parallel infrastructure announcements from AD ports re ROC port progress & the Chinese hydroelectric power news.

Hi Extrader

My take on the Glencore staff departures was that another Swiss commodity trader, Vitol, was poaching from their Swiss rivals to build a new iron ore trading desk. Weinstein is described as an 'originator' which means he is on the 'buy' side of the business responsible for negotiating & documenting supply/offtake deals with iron ore miners. The other Glencore leaver Ahuja appears to be on the 'sell' side, currently in Glencore's Indian operation presumably covering the Indian steel companies/customers seeking iron ore. I didn't read a specifically ZIOC angle into the hires, but it might make sense for Ma'aden to say take a stake in an existing trader & encourage them to move into areas they want covered, rather than trying to build a 'go it alone' trading desk.

Weinstein's missing years were at a Russian bank, but his timing was just before Ukraine & sanctions killed off their international business so he moved back to Glencore. As he is on the 'buy' side it made sense for Hill to have him on the BOD & likely take day to day responsibility for negotiating/documenting on Glencore's behalf. Indeed when I first read the article my concern was that his departure might delay documentation, but hopefully Glencore have others who can take over that role (although whether he is replaced on the BOD, likely depends on whether a buyout deal is imminent making a change superfluous).