Member Info for Jiving

Soup, that's great research - a fascinating & highly relevant scoop. Dated December so he is still pitching the proposal.

Shaun, it seems the whole high risk AIM market has changed in the last couple of years. Once investors bid up high risk/reward shares in anticipation of big positive news. But failure after failure has killed that - UKOG, ADV, BPC just to take the oil sector - were all spectacular failures, same in biotech & elsewhere. So it seems there is a huge investor resistance to bidding up risk shares, particularly those with a long history of disappointment - like HE1 & ZIOC - so share prices are no longer overestimating the risk/reward ratio but massively underestimating it. When a company like HE1 finally delivers the share price movement is spectacular - it will be even more so when ZIOC finally signs the deal.

Always, I thought of that possibility as well, but of course the Glencore/ZIOC merger took place in November 2022 so should have been reflected in the 2022 Resources report not the 2023 report - both were issues on the last day of their year. Besides which the holding of 44% & 2 BOD seats is active involvement by many definitions. Whatever, it doesnt affect the outcome, which seems to be hopefully revolving around Marty & Co fine tuning the last of the Chinese EPC figures with the Saudis.

Mattradio I think you might be onto something with that link. These Reserves & Resources reports are meticulously checked & compiled, especially for mining giants like Glencore. What is really interesting is to compare the identical sections from 2022 with 2023.

2022: Iron ore Mineral Resources and Ore Reserves have not been re-estimated since 2015 (refer earlier Glencore reports). They are not financially material to the Group and are, therefore, not reproduced in this report.

2023: Iron ore Mineral Resources and Ore Reserves have not been re-estimated since 2015 (refer earlier Glencore reports). Glencore is no longer an active participant in the previously-disclosed Zanaga project. The remaining iron ore projects are not financially material to the Group and are, therefore, not reproduced in this report.

So this in the view of the report compilers, is a notable change of status in the period 2022-23: "Glencore is no longer an active participant in the previously-disclosed Zanaga project. " As ever we have to clutch at straws, but it could indicate a disposal of Glencore's ZIOC equity stake (as opposed to its offtake interest) is possibly agreed but "subject to..." finalisation of details?

Extrader, there were indeed many issues that emerged in that period that stalled the project at exactly the time it was ready to go - share price has never really recovered from that. The issue of Denis's control over the legislature vs the executive branch, is one that is built into the French presidential model of government on which RoC is based. Just like Macron he can win the presidential vote & the legislative vote, but if he doesnt he can have issues with the legislature just like Macron does now. However I dont think it will prove an issue as all parties could likely work around what they have without getting bogged down in legislative issues. Denis senior & junior both desperately want/need major projects to be built asap.

I agree FFX the lack of an RNS on warrant exercise over the last 2 days, makes me question whether Monday's trading was indeed warrant related. If it was Dan or Jo they would certainly have to notify & it would be extremely worrisome. Otherwise I believe any other major holder is below 3% (approx 22m shares). Monday's selling could have been more than one holder of course.

99icecream - exactly. That is pretty much my view as well, if all major obstacles have been overcome, they can provide a venue for signing with the big wigs. In our case an RNS could be simultaneously released alongside a press conference.

Yep only around another 10% and they are there.

Its something like that Soup. Or the warrant holder themselves sells forward 35m and then covers by exercising the warrants.

Turnover = 32m so far today, getting close to that 35m figure.

I agree with Soup, this looks to me like the pre-selling prior to the warrants being exercised. All sales above 0.25 are profitable for the warrant holder. Its would be good news for the company if that is the case as they raise £87,500.

I see your rationale Extrader, but thats what happened between 2014-2016 regarding the Mining Convention & the RoC legislative process - which is separate from the Executive branch. A process that was supposed to end in Q4 2014 in fact was dragged out until Q3 2016 - thats the history.

The possibility of seeking/needing a strategic investor began very early on, even before Xstrata was taken over by Glencore. this is from an RNS dated 31.10.2011:

"Xstrata and ZIOC wish to explore whether there is a suitable strategic partner who can further enhance the long-term value of the Zanaga Project, including off-take on commercial terms, access to construction financing and construction expertise. Accordingly Xstrata and ZIOC have embarked on a joint process, which is at an early stage, to identify a party to become a strategic partner in the development of this world class project."

ATG I think fast tracking Stage 2 would make an awful lot of sense, especially given the strength of demand for high quality processed ore. Even if it was not fully financed from cash flow but from a ZIOC top up equity issue, which would be one consequence of fast tracking it possibly before Stage 1 was at full production.

Once the ZIOC share price reflects the project valuation, it can act like any other listed mining company & do share issues or convertibles to accelerate projects with only a very small dilutive effect. If you have major strategic investors with big holdings, say GLEN @ 40% & maybe Manara @20%, and they decide to maintain their % holding by participating proportionately; then a bank/broker only has to find investors for 40% of a new issue.

ATG. The Mining Licence is apparently based on the current phased development plan - 12 + 18. The current feasibility study is also based on the same phased development. I am not sure how easy it would be to move immediately to say a 30m project given the Licence/Convention situation. When they signed the Convention in summer 2014 with the Govt they thought it would take around 6 months to pass into legislation but it took nearly 2 years. If that needed amending perhaps that could happen faster, but any providers of project finance (accounting for up to 70% of the financing for Stage 1) would need the underlying legal position to be clear before signing off.

Hi Extrader,

I also think there is a distinct possibility that in line with their new 'Green Glencore' that they might want to keep their stake in ZIOC, whereas previously I thought they might have sold the equity but retained the offtake rights. As I explain to Bear below their takeover of Xstrata was specifically to make sure they owned the mines they held the offtake rights for. We dont yet know what ownership/offtake will emerge from any deal with a strategic investor, but if a strategic investor took 20% of the equity & the offtake by default that would leave Glencore with the remaining 80%.

If a single strategic investor, say Manara, buys a 20% stake of the Zanaga mine or equity, & that raises sufficient capital to finance the equity portion of Stage 1, I dont see the rationale for ZIOC to seek any further strategic investors. If Glencore do not wish to retain their stake perhaps they will sell equity/offtake portions to third parties like say Nippon Steel (all monies to Glencore, none to ZIOC), otherwise we may end up with just a single new strategic investor.

Bear, well I am in the same situation as you & everybody else, trying to work out what is going on from snippets of information from the company & in the public domain. As you know the company has been listed 13 years without yet achieving a deal that kickstarts production. This of course is the reason the share price from a launch price of 156p, a high of 222p & then gradually declined to below 2p at one stage. Any deal should put us well over 200p. In the past investors have put some of the blame for the failure to make progress on Glencore-ZIOC tensions particularly over offtake - which is at the heart of Glencore's operational focus. Potential issues concerning Glencore/offtake are my sole concern at this stage.

You can see the importance of this issue if you look at the history of Glencore & Xstrata. Glencore spun its mining assets off as a separate mining company: Xstrata, but crucially retained the majority of the offtake from its mines. So if you wanted copper from an Xstrata mine you went to Glencore not Xstrata & negotiated & agreed with Glencore not Xstrata. Glencore later had a change of strategy & decided they did want to own the mines as well as the offtake rights, so launched a takeover bid for Xstrata & re-integrated it back into Glencore.

As a result of the ZIOC merger deal Glencore legally own 100% of the rights to market Zanaga iron ore. The crucial question is: are they negotiating with a third party such as Manara, jointly as a ZIOC/Glencore team covering all issues regarding the mine & also the offtake; or are they negotiating separately. If they are negotiating these issues separately, you could potentially have a situation where Manara successfully negotiate a 20% equity stake in the Zanaga mine, but they still have to separately negotiate an offtake deal with Glencore for 20% of the offtake. Even if they are negotiating jointly, final decisions on offtake are legally 100% a Glencore matter. The offtake agreement is only automatically subject to re-negotiation if ZIOC majority ownership/control takes place i.e. a third party buys 50+%. If a third party takes less than that, say 20%, there is no automatic re-negotiation under the new Marketing Agreement.

If this holds on appeal its a big hit particularly for Vale. They have taken a lot of financial hits because of this since 2015, which has stretched their capital investment programme to the limits.

https://www.reuters.com/business/brazils-justice-sentences-vale-bhp-samarco-pay-97-bln-damage-repair-2024-01-25/

Whilst checking out the above, I came across this article on Glencore from 2014 re iron ore which I had not seen before.

"As a relatively new entrant to iron ore, Glencore Xstrata relies on some initial offtake agreements and trading activity as it seeks to build its own mines in partnerships to allow for marketing of its own ore. On February 11, Platts reported on a note issued by brokerage Investec that Glencore Xstrata is still interested in developing its iron ore mining business to complement industry leading positions in coal and base metals but may hold back from sizable acquisitions in the sector due to asset prices."

https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/metals/031714-glencore-xstrata-signs-iron-ore-offtake-agreement-with-el-capitan#

Its actually even better for RoC. The Mining Convention agreed in 2014 & passed into legislation in 2016 gave RoC a 3% royalty based on mine revenue as well as a 10% carry. I wonder if that carry includes offtake rights?

There were serious corruption allegations agains Rio at one stage over Simandou that cost a couple of senior Rio exec's their jobs. The Saudis & Emiratis seem to know how to keep their friends happy, didnt they loan Denis a royal jet last summer?

Mitch/Extrader. Glencore must have realised that forgoing a proportion of their 100% offtake was always going to be the 'price' of a strategic investor buying in & requiring a matching % of offtake. My hunch is the Saudis (20%) alone or with others in a consortium (do they need one?), would probably provide a better deal than the Chinese - ie overall a lower % of equity & offtake. Thus if the Saudis are the likely favourites, which all indications are that they are, they might also leave a higher % offtake for Glencore than a Chinese strategic investor would. Much of the marketing terms anticipate a 51% change of ownership structure - I dont see why that is necessary or likely & would suggest that the appointment of a CEO means development is likely to take place within the existing ZIOC structure & not via a new majority owner.

Interesting in Driving's video to see confirmation that Vale paid $2.5b for 51% of just the northern half of the Simandou concession. The implied pre-development value of the entire Simandou concession is thus staggering. And also an important marker for those of us arguing that strategic investment into Zanaga will be similarly priced on an NPV project valuation related basis (& nothing to do with the current share price).

ATG I hope you are right, I have bet the farm on ZIOC & 'need' it to come right. I think it is quite possible they are indeed ironing out details - I am 'Mr 20%' who believes this can be achieved via a 20% placing/asset disposal based around NPV - which would be a staggeringly good deal for ZIOC shareholders.

But many, including me, were expecting at least an MOU at FMF if not an actual transaction. Instead we got a Bob Wilt speech that focused on Manara's offtake plans & intentions, going so far as to mention Glencore by name to reassure them Manara did not intend to be a competitor. If you wanted to send a message to Nagle & Glencore about 'red lines' that would be one way of doing it.