Member Info for Jiving

Actually I have got some useful info & links on China ore plans & mine valuation which I will condense ^ post in coming days.

No ATG it is you who blindly & consistently have been missing the simple point I have been making all along & which you now finally acknowledge - that we have the T3 mechanism in place to meet our forthcoming obligations if nothing else happens soon, phew at last. What you & others have been arguing is that there is a deal coming shortly that will make it unnecessary - yes I have consistently said I 'hope' thats true - but neither you or anybody else has provided one shred of evidence that it will come before we need to meet our financial obligations. The fact no T3 has been triggered yet could be 2 things; i. what you & others (including me) hope is that an announcement is coming soon; ii. that it is just a sign that Elphick is fine tuning it to the last reasonable moment. As I keep saying - you dont know whats going on, I dont know whats going on & Elphick may still not know a deal date.

Eddsy & Danny no points to make as ever.

Stating simple facts - ie that the company has short term financial needs it has to meet - is not making a fuss, no rational person should be even challenging it. Its only 2% dilution why act as if it something that has to be avoided, would you rather accept a 20% worse deal than a 2% dilution?. The challenge remains - if he dont trigger T3 how do we pay company expenses beyond June & how do we repay the loan by end July IF there is no strategic investor announcement - answers please?

Shaun they haven't taken it yet because they are leaving it to the last reasonable date to trigger it. Previous tranches were not sold daily but in blocks when they were needed - that is the whole point of this mechanism. We could easily sell T3 in a month if we had to, the discount might be higher but it could be done - thats how markets work that how equity capital markets work. Placing capacity & price is a function of average daily liquidity & discount. Its why companies issue large % of capital at higher discounts - there is nearly always 'a price', so we could place GBP800k of shares on 30 July but we would pay a high discount, I think the T3 drip feed approach is better as the discount is lower.

Shaun if you look at the figures I have given for the daily sales needed to repay the loan (170k a trading day over 10 weeks) you can see they are easily doable relative to recent active days ie Tuesday at 1.16m or the 3 month average trading volume of 487k daily. So there is still time for T3 to be used to meet the company's proven financial needs in June/July. Absolutely we had no need to do T3 in March or April as we & Elphick must be always hoping the strategic deal will be announced & the need for T3 will disappear. But in the absence of that announcement nobody has yet given an alternative way of financing the company's expenses or the loan repayment except via T3.

So to be clear like others I hope an announcement of a strategic investor will come shortly, but if it doesn't we have the T3 in place to meet our coming financial obligations & that is already in place & is less than a 2% dilution. Which begs the question why does anyone make a fuss about this trivial 2% - its not 20% it 2% - & if we need more time to get a better, more valuable deal isn't it worth it (if say we got a 20% better price in August, isnt that worth a 2% dilution?)

Absolutely its all there ATG & I completely understand what the figures & simple arithmetic are telling me & everyone else. The RNS of 28 March sets out two inescapable short term financial facts - we have $491k left to pay all the company's expenses, and when that runs out we need to raise funds. That RNS also clearly sets out that we repaid a big chunk (nearly half) of the Glencore loan in the prior quarter & there is $736k to be repaid by 31 July & money has to be found to repay that by then. But phew the company has already prepared for these eventualities as it has T3 of the share sale waiting to repay them IF necessary. So its great news for realistic investors we know IF there is no strategic investor deal by the time we need funds we have a mechanism in place to provide those funds. There are no 'hoped for' or 'obvious' financial solutions presented in those RNS's outside of the above.

Marcus I am not wedded to any view, I am open to different alternatives but I believe in reality not wishful thinking. Sadly unlike many posters who are seemingly wedded to the idea that the company can run on air when it runs out of money & history shows that isnt possible.

Here are a couple of questions you you Marcus.

i. They had $491k 28March, they have heavy monthly costs due to increased activity & anew CEO to pay for. Do you accept that at some stage the company's money will actually run out, & when that money runs out how is the company going to pay its bills?

ii. The loan repayment date is 31 July with $736k outstanding, the two previous quarters have seen substantial repayments, where is the money going to come from to repay the loan Marcus?

Please point me to an actual real source that confirms this "So there must be some other inward investment ..", 'must' dosnt cut it without a reliable source its not 'must' but 'hope'. The majority of share sales of the last two tranches appear from trading patterns, to have taken place over relatively short periods. On Tuesday we traded 1.16m shares according to Investing.com, this is my placing estimate I gave yesterday that shows the company could easily repay the loan from share sales by 31 July. "At 7p a share he would need to sell some 8.5m, over 10 weeks that would be 850k a week which is reasonable to achieve." And 850k a week is 170k a trading day.

Vet10. We dont know if there is a Chinese offer, just like we dont know there is a Saudi offer. I was using a theoretical bidding contest between the two to illustrate we have no idea what is going on behind the scenes & more time might be required under certain circumstances.

ATG. To be clear when I say 'hold back to the last minute" I am (as indicated multiple times in recent posts) meaning the last minute that gives him time to raise funds in a RESPONSIBLE fashion. So IF he has to repay the loan on 31 July of course I am not saying he would hold back until 30 July, but would begin the process many weeks ahead - ie like late May or early June.

None of us 'know' that the strategic investor will come in May or June or July - if you do ATG please state the actual evidence for that date & 'obvious' doesnt cut it - just like obvious hasnt cut it for the last 13+ years. One thing we do know as a simple arithmetic fact is that our funds of $491k on 28 March will run out at some stage soon, we also have a loan repayment date of 31 July. Just as we dont know the date a strategic investor might sign quite possibly neither does Elphick & ZIOC - because the situation may be rapidly changing as the decision time approaches.

What if the Saudis request a month to put together a higher bid than the current Chinese offer - should the company decline & say no we will go ahead with a lower offer because it saves us doing a minor inconsequential 2% dilution? You dont know the endgame ATG , I dont know the endgame and quite possibly Elphick doesnt know the end game. Everything could be in play to the last moment, & the last moment could therefore inevitably be extending into summer. ABC ATG.

Extrader yes you are correct it should be after. I don't see that paying lawyers/consultants in shares at current levels is any less dilutive than selling them into the market.

ATG I also think we are in the final stages of negotiations with strategic investors but those investors may now be revealing their end game. Perhaps they negotiated initially for a buy-in, but now want a full buyout & that changes the equation. Similarly, maybe we have competing bids that need more time to iron out? The reality is we dont know the state of play & past fantasising (I include myself in the wishful thinking brigade at various stages in the last year btw) about an imminent deal has proved faulty. We are indeed running on gas & soon that will run out (phew glad to see someone sees my simple arithmetic point), Elphick will hold back to the last minute on T3 but circumstances will force has hand at some stage in the next few weeks. As I keep stressing, its about less than 2% dilution & the market impact of the selling only impacts short term traders not LTH - so who cares?

The reason they haven't have taken it already, is because they only need it when they need it to pay their bills & not until. 'Something has been on the horizon' for 13+ years & thats where it still remains. The moment their $491k cash balance is depleted they have to raise funds to pay bills & their only way of doing that is via share sales in T3. It is simple arithmetic when that moment occurs, if it happens before a strategic investor RNS so much the better, but our very limited $491k funds are running out & then its share sales or bankruptcy.

Shaun you are missing the point again. The company has bills to pay & a loan to repay, they only had $491,000 in cash at end March. That does not last forever right & it certainly does not repay a $736,000 loan or that would be minus $245,000 on its own. The only way they pay monthly bills & repay loans is by selling shares. When that $491,00 is spent they sell shares or declare bankruptcy, my hunch is they will sell shares before then!

1. They didnt take tranche 3 straight away because they were waiting to see if a strategic investor could be announced in the period after tranche 2 ended. But if it didnt happen in time, then of course they will have to launch tranche 3 to pay their bills. They may not know exactly when they will get a strategic investor, competing investors may be putting forward different competing, complicated bids - it may take many more months to finalise!

2. They only have $491,000 of cash at end March. They must have a minimal limit which they cant go below I would guess something like $200k. The Glencore loan aside, the company is spending money every month (I would estimate say either side of $150k a month) so the cash will run out eventually. If we are not out of money to pay monthly expenses at end May we will be shortly afterwards.

3. Two instalments of the Glencore loan have already been repaid, it looks to me highly likely that the final $736,000 could be repaid on 31 July - thats the pattern established over the previous 2 quarters.

When you have bills to pay, you have to get money to pay them. We had $491,000 on 28 March that will not last forever!

Shaun, very happy to answer your point. First off lets remember we are discussing a less than 2% dilution here, its not a that big a deal. Second, I assume that Elphick like the rest of us would prefer not to be diluted & will hold off from further dilution as long as he can, but he also has to meet obligations like potential loan repayment & increased monthly costs - you cant run a company on air - right?

i. Because the two previous tranches took 9 months does not mean we do not need tranche 3 soon - it all depends what bills we face & when. Some 56% of money raised from the previous two tranches went on repaying $1.163m of the Glencore loan. If the remaining $736k needs repaying by 31 July then Elphick has to be utilise tranche 3 because we dont have the cash otherwise. At 7p a share he would need to sell some 8.5m, over 10 weeks that would be 850k a week which is reasonable to achieve. Indeed thats why I raise the question now he needs the time to do that smoothly.

ii. Our monthly costs have increased substantially from the days it was just AT & a low key operation at the mine. We now have a CEO, & also various consultants potentially attending meetings with strategic investors worldwide. We hope they are travelling to China & Saudi at the very least which all costs money. Plus third party people like expensive lawyers are needed at some stage. End of Q1 we had cash of $491k, that does not last very long Shaun & where do we replenish it from but the share subscription?

Eddsy as ever you dont have any point to make.

I see no reason for anyone to 'panic' over a possible 2% dilution. I would hope/imagine that Elphick holds back on any equity funding till the last moment & he has done a good job re-dilution so far in the company's history. But even he may not 'know' with any certainty when a strategic investor will sign up & we get 'the RNS' & monthly expenses need paying come what may.

Incidentally I note loan repayment is extended till 31 July 2024 so we have 10+ weeks till then.

Oh where did you get that timing info ATG? Of course we all hope the RNS happens tomorrow or next week but where is the evidence that is the case? Surely surely its reasonable given we have some 6 weeks left till end Q2, to ask whether there will be another loan repayment (given that happened in last two quarters) this quarter, and also how we are going to keep paying company costs IF the negotiations continue for another couple of months given our cash situ end Q1?

I dont see why there is any reticence discussing this topic, it is true of every company on earth, they need revenue/income to fund their activities & it has to come from somewhere. Similarly if we have to use the third tranche so what, its around 2% dilution which is not a big hit given the potential prize. Shares get sold into the market, if you are an LTH again so what; short term fluctuations only affect traders not LTH.

But Marcus how do you think they will keep financing the company month after month - they had $491k end March, where will the money come from if not via the equity sales? Also do you see my point about the loan repayments made the last 2 quarters, it looks like a repayment schedule to me with possibly one last repayment due this quarter, do you have an alternative interpretation?

Shaun, I agree with your take on FEED being an integral part of Stage 1.

Regarding the 3rd tranche I believe Elphick (who is commendably anti-dilutive given his stake) would leave triggering that tranche to the last minute. But in corporate finance terms that would be roughly the midpoint of this quarter (hence why I have been watching trading patterns closely the last couple of days). My take is there are 2 reasons why we 'may' see the third tranche triggered soon:

i. Loan repayment. The last 2 quarters have seen ZIOC make significant loan repayments to Glencore. The last quarter saw $700k repaid, leaving an outstanding amount of roughly the same ie $736k. I frankly see a repayment pattern here, that ZIOC is gradually repaying the Glencore loan quarter by quarter & the funds to pay for that can only come from share issuance.

ii. Corporate expenses. Will have rocketed due to the increased staff & consultants chasing down strategic investors around the world (think airfares, hotels...). Plus when the time comes very expensive Western lawyers to put it all into legal contracts. End March the company had $491k in cash, no sensible company is going to let that run down to much below say $200k, and you cant leave a share facility to the last moment & dump millions per day better to dump 1-2m a week over a longer period.

Driving, every trade is a simultaneous buy & sell (see attached explanatory link). The LSE system of categorising a trade as a Buy or a Sell based on which side of the bid/offer midpoint a trade takes place, gives an entirely false impression of what is going on; by ignoring the fact that every trade it categorises as a 'Buy' is also a sell & every 'Sell' is also a buy. The key indicator of whether selling is overwhelming buying is the change in price level, yesterday selling pressure overwhelmed buyers & the price fell significantly vs the previous day reflecting that market reality.

This is the link from Investopedia, see section Stock Market Supply & demand :

https://www.investopedia.com/articles/investing/082614/how-stock-market-works.asp

"For every stock transaction, there must be a buyer and a seller. Because of the immutable laws of supply and demand, if there are more buyers for a specific stock than there are sellers of it, the stock price will trend up. Conversely, if there are more sellers of the stock than buyers, the price will trend down.

A trade transaction occurs either when a buyer accepts the asking price or a seller takes the bid price. If buyers outnumber sellers, they may be willing to raise their bids to acquire the stock. Therefore, sellers will ask higher prices for it, ratcheting the price up. If sellers outnumber buyers, they may be willing to accept lower offers for the stock, while buyers will also lower their bids, effectively forcing the price down."

Marcus we moved from a close yesterday above 7p, to below 7p today (google finance put us down 5.65%)- ie the share price ended down because sellers overwhelmed buyers. That is because there were more sellers prepared to sell under 7p than there were buyers prepared (or needing to) buy above 7p. what was the source of that net selling, could be someone off-loading could be the company.

The company only has one means of generating income to pay its expenses (company, loan interest & loan repayment) & that is share issuance. So it should be no surprise to anyone if at some stage the third tranche is triggered, because companies have expenses & they dont run on air.

Marcus what is the connection between the share price & loan repayment, there is none that I am aware? They repaid big chunks of the loan in the previous two quarters: $463k by end December & then another $700k by end March leaving a balance of only $736k outstanding. If you find it annoying that the Glencore loan seems to be being repaid from the proceeds of our share subscription at current low levels & with obvious dilution (unnecessary if the loan had been rolled over in its entirety), so do I but it is what the evidence of the last 2 quarters is pointing to. We had only $736k outstanding at end first quarter having repaid $700k during that quarter from share sales.

Every trade was simultaneously a buy & a sell today like every other day. For example, the two trades at 8.54 for 125k @ 7.00p was a 'sell' that filled the 'buyers' bid price & quantity, that then dropped the market bid level down to where the next set of 'buyers' were bidding for shares at 6.52p.

Every trade is of course simultaneously a buy & a sell. But which way is the price direction - the bid price level at 7.0p was taken out by two trades & the action then all took place below 7.0p including some large trades, which have some similarities to previous tranche sales. The company cannot run on air and also may need to repay the loan by end June (see previous substantial repayments), it doesnt particularly matter, because at worst the full 12m is around a 2% dilution.

Certainly some clear selling today (not matched trades), I reckon some 700k in large sales below 7p, & 125k at 7.0 first thing in the morning.

At some stage the the company may begin to issue the third tranche of shares, particularly if they need to repay the outstanding Glencore loan at the end of June. I note that a substantial % of the proceeds from the two previous tranches were used to repay a big chunk of the Glencore loan - I estimate about 56% of the proceeds from the 2 tranches went on loan repayment, the rest on corporate expenses.