Member Info for Jiving

MM its interesting you state Marty was in Korea - do you have a link to that info or if not what is the source?

Incidentally have not seen it mentioned here yet, but CityG on the TG board is organising a written question & answer exercise with Dan.

Thats an interesting possibility Soup. That's its Peel clearing their books of the last placing - in order to be ready for the next?

We still have 35m options which have also not yet been exercised. I believe that we have to be RNSd on warrant/option exercise as it immediately affects the number of shares outstanding. Back in 2020 a warrant holder exercised & it was immediately reported.

Chab, this typeof PnD is of a completely different type & scale to those we have seen before. I have also not seen it in other small stocks, is it AI related, are they making money? The old style PnD led by people like the Earl was relatively small scale & usually seemed to end in losses for the Earl's team if not for the Earl himself.

“I’d say we don’t intend as Fortescue to compete against that ($US80), we’ll be producing a new product which the world wants which is green iron ore,” he said.

“If we needed to place 100 million tonnes of green metal we could do that this afternoon, there are literally a wall of buyers out there for green metal. We can take big steps but not if we don’t take a whole heap of fast little steps.”

https://thewest.com.au/business/mining/andrew-forrest-says-iron-ore-price-will-not-fall-under-us80-a-tonne-c-15689880

The last 2 weeks of trading have been grotesque, clearly artificial/false markets manipulated by 'whoever'. No benefit to shareholders or the company & the utterly worthless 'regulatory authorities' do nothing. Just when you thought things couldnt get worse...

I agree completely that long term investment decisions & the FS are based on less volatile long term prices. But realistically sentiment is affected by current market conditions, particularly when a key figure like $100 is taken out & $80 could be next. It all depends where we are in the process. If we have agreed price/terms (for outright sale or JV) and are in the process of finalising documentation, then we are are not dependent on sentiment. I set out on Sunday/Monday in considerable detail some of the reasons I am hopeful that we are indeed moving into the documentation phase. Which if it's a straightforward mine sale shouldn't be more than around 2 months from the end of June.

But if we are still in the haggling stage - & there is a significant gap between a potential buyer's maximum price & Elphick/Glencore's minimum price - then a backdrop of a collapsing iron ore price is not conducive to squeezing more out of a potential buyer. Indeed frankly it would be time for our team to grab whatever is on the table. Especially given they set themselves a target of a strategic investor by end March & we are already nearly 5 months past that.

Many thanks for commenting Shaun - you did read the articles, right? The iron ore price is of course of crucial importance to a company with one single asset - namely an iron ore mine.

First off its not 'me' painting a grim picture, it is specialist commodity analysts who cover the iron ore market who in turn are reporting the collapsing iron ore price in Asia. Which itself is driven by the dire circumstances of the steel market in China, which in turn is a function of the collapsing Chinese property development sector.

Second, 62% is the key industry traded price and when it goes significantly below $100 that is not good news. Of course higher grade ore goes for a margin above 62% - but a collapsing 62% price drags down all grades. On the other board you can see a post from yesterday, where I point out figures from an RTZ presentation that show in the event of a $100 carbon tax that the premium for 67% vs 62% could rise to up to $80 a ton.

Couple of articles painting a grim picture for the short term outlook for iron ore:

https://www.macrobusiness.com.au/2024/08/iron-ore-primed-to-crash/

“We have a hard time understanding why iron ore is still managing to just hang onto $100,” said Westpac’s head of commodity and carbon strategy, Robert Rennie. “Iron ore prices should be in the mid- to late-$US80s given the absolute carnage going on in steel markets quietly in the background.”

https://www.afr.com/markets/commodities/carnage-in-steel-markets-to-sink-iron-ore-below-us90-20240812-p5k1l9

On the RTZ website there is copy of a presentation: 2023 Invest Seminar Sydney. P.29 references calculations of the premium for 67% vs 62% with an increased carbon tax, this was the result;

At $100/t CO2 penalty.

67%Fe DRI/EAF (gas DRI) = +$60-80 (over 62%)

67% Fe DRI/EAF (H2 DRI) = +$80

But answer came there none...

"anyone that's dealt with a bank, we don’t want to walk in looking to eager,"

"anyone that's dealt with prison, we don’t want to walk in looking to eager,"

And if anyone wants to go the original source it can be found on P35 of the 2010 prospectus, which also makes clear the disproportionate effect such an ownership concentration can have on corporate votes/decision making. I quote:

"On Admission, Garbet and Guava will own 115,671,186 and 88,730,397 Ordinary Shares, respectively, representing 41.25 and 31.64 per cent. of the Company’s issued Ordinary Shares. As a result of their significant shareholdings, both Garbet and Guava will be able to exercise significant influence over all matters requiring Shareholder approval, including the composition of the Board, approving the timing and amount of dividend payments and approving general corporate transactions. "

If this message is aimed at my Sunday post on the other board, it is completely misunderstanding & misinterpreting that post.

1. There is categorically no implication of criminal behaviour by anyone, exactly the opposite I am sure everything will have been done exactly in line with BVI corporate law & the company's memorandum of association. Clifford Elphick, the ZIOC Board & the 'new' Glencore I am sure will scrupulously follow the law in BVI & everywhere else, with regard to the company & any transactions. I have never seen anything that suggests otherwise, & I would never imply otherwise. Indeed it would not surprise me if all decisions were always taken in conjunction with legal advice from a leading law firm in the BVI or elsewhere, which insulates from potential future legal challenge.

2. It is a matter of historic record that Guava, Garbet & Xstrata/Glencore after the 2010 IPO owned well over 75 % of the Zanaga mine. The actual figures would be :

Xstrata (now Glencore) 50% +1

Garbet owned 41.25% of ZIOC so 20.6% of the Zanaga mine

Guava owned 31.64% of ZIOC so 15.8% of the Zanaga mine

The Big 3 therefore owned 86.4% of the mine, which had Xstrata/Glencore done a share swap as per 2022 would have translated into 86.4% of the voting shares of ZIOC. That is a considerable margin over the critical 75% level, & even allowing for sales after the dissolution of Garbet, & for dilution from placings it makes it likely that around 75% of voting shares could be in the hands of the Elphick/Glencore camp & always have been - particularly if management/Board shares/options count towards 'friendly' holdings. All clear, legitimate & above board.

3. The existence of Elphick/Glencore potential 75% holding/vote is not a threat to minority shareholders but a blessing. It allows them to negotiate a sale or JV with strategic investors on the basis they can deliver 100% of the project unimpeded by potentially blocking shareholders. This is one of their key negotiating strengths in arguing against a ZIOC market cap based sale price and on the basis of essentially a 'private' sale price based around NPV. I expect all 100% of ZIOC shareholders to receive exactly the same price for their shares in the event of a takeover.

4. The whole gist of my post was that I took this to be indicative of the end game. The haggling over price/structure was over & we were moving to the critical (but straightforward) of preparing for an announcement & the critical corporate timetable that would follow on from that.

If you look at the price/trades quoted today, you can see someone has found a way of getting the trades essentially reported twice - a number of them are for same amount at the same time. More of the same nonsense from last week.

FFX. Some 10 years ago I was involved in marketing a tech patent for a friend. We had many meetings with brokers & lawyers. It rapidly became apparent that patents are indeed often used to block competitors, and the Samsung-Apple patent wars are a symptom of that. Do the same tactics prevail in the biotech area - no idea, but it must be a possibility.

Eddsy feel free to give your reasons why?

Join the discussion in the discussion forum......

Of course nothing can happen with Zanaga without Glencore's approval - in fact they have a triple lock - their shareholding; two Board seats & control of 100% of offtake. But equally of course Elphick is aware of that, and will only be looking for a deal that meets their parameters - all can likely agree that an offer around say 2024 FS NPV is a good deal.

The early repayment of the Glencore loan & the raising of a relatively large amount of equity capital upfront, is similarly indicative of the end game. The company’s accounts are being cleansed - loan completely repaid & documented; potentially all outstanding bills will be paid leaving only small amounts owing at the end of each month - exactly what you would do prior to a deal - be it a JV, merger or takeover. Also substantial funds would be needed to pay for Magic Circle lawyers to oversee the crucial sale or JV documentation process - which should take weeks rather than months. If the company went for a mine sale & then a wind up, this process could happen very quickly as its a BVI company, so does not have to comply with the UK Takeover Code - everything is instead subject to Board approval & control. Also any court assents needed are likely to be obtained faster & more efficiently in the BVI courts than in the UK.

The corporate action that might happen in the event of a full sale or buyout of the mine is hinted at in the original prospectus, which on P23 sets out what would happen if Xstrata made an offer for ZIOC:

“In the event that an Xstrata Offer is made to the Company for all of the issued share capital of Jumelles BVI, the Company would, following completion of the Xstrata Offer, seek Shareholder approval for an appropriate course of action, be that a winding up and return of capital to Shareholders or a conversion of status to an investing company. “

Extrader’s detailed arithmetic posts regarding the recent placing set me thinking about what the end game could look like. It was then it struck me that the machinations around the 1 July placing were likely not about financial advantage but corporate arithmetic. IMO Elphick/Glencore potentially used the July placing not simply to raise funds, but to fix the corporate votes relative to the new expanded share capital. Their target I believe is to ensure over 75% of the voting shares are in the Elphick/Glencore camp.

i. The issuance of shares to management/BOD in October 2023 will have put essentially all of those votes into Elphick’s camp. I see from the 2.10.23 RNS that 7.4m options remain - all of which when exercised will presumably be in the Elphick/Glencore camp. “Following the grant of the New Options and the exercise of options described in this announcement, the Company will have 7,403,675 Options outstanding.”;

ii. The Elphick/Glencore share top-up in July 2024 was not to gain financial advantage, but to micro-manage the corporate arithmetic to ensure the Elphick/Glencore camp was clearly over the 75% target;

iii. The 14.4m new shares issued will, as per Extrader’s posts, very likely (in fact IMO definitely) have gone into friendly hands. Possibly to the original JP Morgan/Haworth/Garbet syndicate - which was clearly intended to act in concert with Elphick in the circumstances in which he needed votes. Regardless of whether it is Garbet who took the shares, ‘whoever’ took them would likely be legally ring-fenced to ensure in practice Elphick controls those 14.4m votes. Incidentally P.322 in the listing prospectus shows Elphick’s holding at 88.7m shares & Haworth’s at 115.6m after the IPO.

The key number they would have been aiming for is 75% - which is the figure needed at an EGM to pass a Special Resolution that could agree, say the sale of 100% of a key asset, such as the Zanaga mine. A Chairman who has a ’super majority’ of 75% of the votes & a clear BOD majority can essentially do ‘any’ legal deal, & thus guarantee to a purchaser that all agreed terms & conditions will receive the required shareholder assents.

Otherwise a purchaser would have to potentially undertake an offer to shareholders: that a disgruntled mine purchaser, a hedge fund or ‘anyone’ could potentially block by obtaining around 25% of the voting shares. This happened recently in Aus, where an agreed bid for an Aus lithium mine Liontown, by the US company Albemarle was thwarted after the intervention of billionaire Gina Reinart who bought a 19.9% stake that put her within easy range of the 25% blocking vote.