Member Info for Jiving

We hope they are in detailed negotiations with one, or even better two, serious bidders (China vs Saudi/Gulf?). If that is the case should we definitely expect news tomorrow - the RNS only stated they "expected" to update us in April, that is not a firm commitment more an aspiration.

Good to see you back Soup & relieved that your absence was not due to illness!

Regarding patent filing RNSs, there is not a consistent pattern. For example the most recent Japanese patent grant for NXP002 (RNS 23.10.23) was filed in August 2019 & that was not RNS'd at the time. During his Telegram exchange Dan gave no indication he intended to inform shareholders when an application for orphan status was made & I for one was not expecting one.

Bloomberg also make the link between this bid & a wave of M&A activity:

"BHP Bid for Anglo American Set to Unleash Wave of Mining M&A"

https://www.bloomberg.com/news/newsletters/2024-04-25/bhp-bid-for-anglo-american-set-to-unleash-wave-of-mining-m-a

BHP would keep the Brazilian iron ore, which would be good insurance if its Vale JV falls apart, which given the legal situ is quite possible: https://www.reuters.com/markets/commodities/bhp-vale-london-court-confrontation-over-brazil-dam-damages-2023-07-12/

RTZ has its hands full with Simandou as far as iron ore investment is concerned.

Which leaves FMG among the majors as potentially interested in Zanaga. The last minute play they made for Simandou - without the crazy railway which of course was a necessary condition for success - indicates ongoing interest in large scale African projects. Time they made a last minute play, especially given the Zanaga financials will be so compelling vs Simandou with the crazy railway?

Right thanks, so a key issue going forward.

Montyfino, please could you explain the importance of the indemnity in a nwnf situation?

The point is they can set forth a plan of action - ie we are going to solidify our patent portfolio by taking additional filings, without being obliged to inform shareholders along each step of the way. Dan suggests applying for orphan status is necessary for 002, but did not indicate he would inform us when NFX applied (as with patent filings), & I for one leaving the discussion, had no expectation one would be forthcoming. Storm in a tea cup, nothing is happening till the summer........

If you want to know Dan's rationale FFX thats a question for him not me.

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No Chab there is no obligation on them to inform shareholders every time they file for a patent, orphan status or a grant. They haven't in the past so why should they now?

Good link Mars, there is a lot of money available for the right deals - does that include ours?

I also agree that the orphan status appeared from Dan's TG discussion to be a necessary condition for making progress. I could see from the Pharma's perspective why they would require this form of elementary 'free' filtering of potential candidates. I didnt expect there to be any announcement of them filing for that status, just as they dont announce in advance when they file patent claims in US/Japan etc. I would hope for an update in the summer if the orphan status is awarded & it would be natural then to set out the path ahead for the rest of the year. I dont have any expectation of news until then.

Qatar is very welcome to join the party, the more potential bidders circling the better. The public release of the 2024 FS gives out all the key updated information to 'everybody' and importantly it will come to the attention not just of commercial companies (FMG, BHP, Vale), but also those countries seeking control of strategic mineral reserves: ie as well as China & the Saudis, key players like Japan & maybe India as well.

So who - crucially - likely already has all or some of the details of the 2024 FS ahead of their formal publication. No 1 of course the Chinese - they are solely responsible for producing the entire updated EPC. They also have all the details & background on the power solution, hence the CMEC MOU. The 2019 framework agreement with COIDIC also covered port development at Pointe Noire, so they are likely fully versed in all the details of that as well. I note the port MOU remains unannounced even though AD Ports has been an obvious candidate now for many months - leaving that role open for other parties?

Given we have clearly been in detailed discussions with the Saudis it seems likely they are also aware of most of the key details & thus the financial implications for NPV & IRR. There may well be others, advanced knowledge allows for due diligence to be undertaken & bidding parameters to be calculated; in advance of non-insiders. The hope must be that one of the insiders will use that advantage to make a pre-emptive move prior to public FS release - perhaps they already have.

Extrader - good points partic No 3. If AT wont provide an answer on Tranche 3, perhaps we need to approach the Nomad?

Elphick is Mr NPV - the guy who put the NPV clause in the original deal with Xstrata. It is unimaginable the thought of him launching a vast RI when the shares are below 2% of NPV. Remember he has hung on to his stake through thick & thin watching the share price go from an IPO of 156p to a high of 222p & eventually a low around 1.4p.

Everything we have witnessed in the last 18 months is about attempting to realise an NPV related outcome: be it a minority buy-in of say 20-40% or a full 100% buyout of ZIOC. I am increasingly sceptical about the whole go-it-alone plan led by the Mysterious Marty, it just doesn't seem realistic to me for a project of this scale to be managed as a start-up. My hunch is it has essentially been a ploy to prompt a full buyout offer from the Chinese, at a price based on the NPV to be revealed in our new 2024 FS. If there is a genuine competitive situation in play hopefully we get a buyout close to NPV, if there is only one serious buyer it would not surprise me if we ended up with an offer at a discount of up to 50% of NPV. But surely anything is better than nothing (nationalisation or death by languishing dilution) or indeed the current 2%.

The public release of our new completed 2024 FS of course potentially increases the number of possible bidders to 'everybody'. This may be important, particularly if the figures are striking - I would expect IRR for example to be at least 50% above the Simandou figures released by RTZ. A serious, interested buyout bidder (think China) would IMO tactically want an Exclusivity Agreement in place before the release of the 2024 FS, in order to pre-empt other bidders coming out of the woodwork post FS publication.

ATG. Glencore are actually capital deprived vs their short term investment plans. They need to pay for the TEK coal interest by 3Q 2024 & they then need to expensively provide capital for the flotation of those coal interest into a separate entity & then recapitalise their remaining business. They need everything they can possibly get from asset sales, which btw I view as positive - ie they need to sell up minority stakes like ZIOX.

ATG. Very happy to engage on important issues on our mutual investment, its what an investment forum is all about.

No its not clear to see where the obstacle was, regarding past failures. Glencore did not control the project, essentially due to their voting % both Elphick & Glencore had veto powers over deals/progress. Which is exactly why I state - we dont know who is responsible for the failure to secure a deal in the last 13+ years - except we do know that no deal has occurred.

Regarding full ownership being on sale = of course it is. IMO this what it is all about they are trying to eke out the best possible deal they can from the Chinese. Time will tell.

ATG. Calling it option value (actually I believe for way less than a decade, a throwaway comment by Glasenberg) doesn't imply they were responsible for deals not occurring, it equally could have been Elphick (having not sold out at 156-222p) having his sights on a valuation above what any potential strategic investors were prepared to pay.

This project remains a perfect fit for the Chinese - already responsible for power & the entire project EPC & taking the financial risks for both. In various remarks on Simandou I have noted Chinese complaints about the extent of their equity interest/offtake vs their financial risk & having to accept joint management of the project with RTZ. Clearly they would prefer full ownership & sole control - which is on offer here (unlike Simandou). Tactically a potential buyer would ideally want to deal ahead of the public release of an FS (when it would potentially draw in other bidders) so I also view the next couple of weeks as extremely interesting - external events aside.

ATG. Actually we dont know where the delays in this 13+ year process have occurred - it could be Glencore, it could be Elphick - most likely its both. But Elphick is Chairman & has the main executive responsibility for this project, it is a minor matter for Glencore. We know there was interest by a Chinese consortium & by the Japanese in the last 5-6 years, but nothing happened.

I share the positive hopes regarding April but we need a deal ASAP before external events intercede. Elphick/Glencore can tailor their demands to get this over the line - between them they control price, structure, offtake. What they cant do & what concerns me most, is they are powerless to stop big external issues - a ME war, a collapse of the iron ore price or a coup/civil war in the Congo - all of which could permanently derail any deal again.

Since October the possibility of an escalation to the conflict outside of Gaza has always existed. The danger to us is the possibility of devastating attacks on the Saudi oil pipeline & refining infrastructure (as Iran undertook as recently as 2019 on Abqaiq & Khurais ) and/or the Gulf States. Likewise an Iranian blockade at Hormuz & accentuated Houthi attacks in the Red Sea could severely damage global oil supplies & the world economy. Directly or indirectly both our likely strategic investors (Saudi, China) could be affected by a major escalation by Iran.

At 3.00 am UK time it seems the vast majority of Iranian drones were intercepted outside of Israel & caused little damage in Israel. Crucially substantial numbers were taken out by allies - US, Jordan & UK - which gives all of them some influence on the nature of the counter attack. The key here is whether the Israeli counter attacks focuses on 'traditional' military targets like missile & military bases or whether they specifically target the vast Iranian nuclear infrastructure. This has been a longstanding target of the Israelis (& Netanyahu in particular, twice having attack authorisation refused by the key cabinet security/defense committee) & an attack on it would send the Iranians literally 'ballistic' - they would attack on all fronts.

My biggest irritation with Elphick & his various negotiating ploys is he often appears to have little regard for time, acting as if we have 'all the time in the world' when in fact we clearly dont on all fronts. This was why I was so relieved when he finally announced an end Q1 date for a strategic investor & so disappointed when he failed to meet that target & didnt announce a new target date. The situation in the Congo, as ably recorded by Extrader, is also deteriorating ahead of the Nguesso succession - their last vicious civil war ended only 25 years ago. If there is any deal out there we need to get signatures on contracts, essentially regardless of price & conditions - we get what we get.