Stefan Bernstein explains how the EU/Greenland critical raw materials partnership benefits GreenRoc. Watch the full video here.
Oofy: again, just quick replies:
1. "Vast’s cash requirement for debt service and repayment can’t be met without the diamonds."
Due to the commercial progress made at BPPM, where concentrate volumes are moving modestly into operating cash surplus as of Q4, Vast now has an ongoing payment plan with Mercuria. The other creditor, Alpha, does not yet have an ongoing payment plan arrangement but, IMO, will be accommodated on that basis in the near future if diamonds are further delayed. It's my view that, over 2023, the creditors have ceased to be an existential threat.
2. "... though, in spite of your reasoning, I can’t think of a reason why the RBZ or the Zimbabwe government, since you clearly think they’re involved, wouldn’t want them off theirs hands, particularly since there’s an order of court that they be handed over".
Governments are not in the habit of being intimidated by courts. Again, I cite you the Romanian parallel: a court judgment was accepted by the government in principle, which then took around 5 years to implement it. Again, I think you're under-appreciate the potential for complexity here. It's not about ZimGov wanting the diamonds off their hands. It's about this happening in a way that complies with Kimberley and other requirements. Might I suggest that more research might be needed on your part?
3. "it’s at the mercy of its lenders if it hasn’t got enough money soon".
Again, a payment plan is in place with Mercuria. As for Alpha, we've discussed the limitations of their position before. You were erroneously under the impression that they can seize BPPM without any court involvement - and you oddly tried to give home repossession by a bank as an analogy. As I pointed out then, court involvement is essential in both cases. And as I pointed out from my observation of things as a resident in Bucharest, once you're into the Romanian court system - which is slow and highly permissive of appeals - you can kiss goodbye to two years very easily. Alpha will be waiting a long time to enforce and you can bet they know it.
4. "It’s been a horrible investment for Capstone."
Capstone has a pot that is measured by the billion. The money they put into Vast was a drop in an ocean.
5. "I’ve seen a number of posters pointing to their presence as a reason for confidence in Vast. Now I’m seeing a number of people saying this is good news, as a potential large seller is now out!"
One area of agreement. I never set much store at all by Capstone buying in and, for what it's worth, they're only out on their Barclays nominee holding, while retaining a similar-sized direct holding. Hardly anyone here seems to have noticed. Capstone are highly successful volatility traders, with more than one angle here.
Gizabigrise is absolutely right here that the TR-1 (text as well as boxes) are absolutely clear. Capstone properly reported the drop in their nominee holding via Barclays below the minimum reporting threshold of 5%, and that is reflected in the boxes. The covering text provides useful supplementary information to say that they have additionally reduced this holding to nil.
Be aware, though, that Capstone also directly hold 260,467,120 shares in their own name, separately from their nominee holding via Barclays. This was updated months ago on the Vast website. So we have to hope that Capstone are simply de-risking by dumping their secondary market play shares while planning to keep their other shares, which they got via the swap deal early this year. Otherwise, if they want to dump the whole lot, there's further to go.
Nevergonnaretire: I think the number is too low. I believe he was referring to Q4, based on the 598 DMT stockpile at end September (+ probably improved production). Q3 itself was very surely back to loss-making due to accident and strike. Otherwise I'm very sure the Q3 Report would have trumpeted a breakeven quarter. It very noticeably didn't.
As regards Oofy's reply to me on 10 Nov. (22:33), I don't particularly want to perpetuate a dead-end discussion but I will comment briefly.
Oofy wrote - and my answers would be - as follows:
1. "SandyShore: yes, but it doesn’t take months to sort all this out."
Yes, this type of stuff can take months to sort out when you're dealing with a fairly inept government that's anyway changed in an election, and the topic is somewhat sensitive.
2. "If the RBZ doesn’t know the procedures involved, who does? Who is responsible for them?"
Very obviously, the government. The election can only have mattered because at least some aspects of the procedures and processes were thought by RBZ to need ZimGov sign-off.
3. "I’m amazed you can’t see this."
Can't see what? What I can see is Oofy's worldview in which dealing with government and a central bank is just a matter of saying "Thanks, that's ours, we'll collect". ZimGov has international regulatory obligations and historic reputational issues in the diamond sector, and the parcel is historic. Unlike Oofy, I would expect it to be an uphill process and I said so back when the news first broke.
I gave then the parallel that, in Romania, and also with a court judgment in its favour, it still took Vast about 5 years to get a mining licence for BPPM out of RomGov because there was a bunch of niggly issues and the government kept changing.
3. "And that you can’t spot deliberately obstructive bureaucratic gobbledegook when you see it. And that you can’t look behind it to find a reason why this is all Vast are getting from the RBZ."
Based on what I've already said, and based on the very slightest knowledge of processes around diamonds (including valuation, royalty, export licensing, Kimberley Process certification), I think it's absurd to refer to the issues as "deliberately obstructive bureaucratic goobledegook".
Again, that view is based on a blissfully naive presumption that there is nothing for Vast to do except say, "The diamonds are ours, hand them over" and ZimGov + RBZ will cheerfully say "Sure, fine. Never mind our royalty, export licensing or Kimberley certification, you just take them for free in a suitcase on a charter flight without any international regulatory compliance." It's absurd.
4. "No one from Vast has seen the diamonds."
I have no idea whether that's true or not, and I'm sure Oofy doesn't know either. Oofy has repeatedly touted the view that the diamonds were stolen years ago. Perhaps yes. Perhaps no. Were that to be the case, however, then the *even more* sensitive issue would be which alternative 129,400 carats the RBZ will somehow be enabled to hand over in lieu or what other RBZ / ZimGov insurance settlement will instead be reached. That process would probably take even longer - but even that would also find its way, one day, to a conclusion.
IMO.
Yes, this issue was discussed to death some time back. Capstone are/were holding in two portions: one is/was their directly held portion in their own name. The other is/was the portion held for them by Barclays.
The likeliest sell-off is indeed Capstone's holding via Barclays as nominee - though there are one or two less likely alternatives.
ASI: I very much doubt that Oofy has any interest in a real discussion. He's become increasingly transparent in insisting on either of two.options: (1) diamonds vanished long ago; or (2) bribery is needed to retrieve them.
I'm sure we've all got his point by now.
Unfortunately, he repeatedly slides past the fairly precise list of issues in the 4 July RNS.
Oofy: your increasingly relentless and tiresome selectivity with RNS text does you no credit.
The material issues are specifically itemized in the phrasing you ignore:
"the Deputy Sheriff agreed that the RBZ would confirm, in writing, the process that would define the procedure for the orderly and secure hand over the parcel to the Company, which includes the procedure for valuation for royalty purposes, export permits and Kimberly Process Certification.
"Thereafter, the Company and RBZ will put in place logistics for the removal of the parcel attached by the Deputy Sheriff under the writ of execution."
So assuming you are a great deal less literate than Wodehouse, that would be:
1. "the procedure for valuation for royalty purposes"
2. "export permits"
3. "Kimberly Process Certification"
4. "logistics for the removal of the parcel attached by the Deputy Sheriff under the writ of execution".
Okay? Got it now?
Oofy: "If the election was really a reason for the delay, then politicians are clearly involved = bribes."
I think that's a reductive view. Based on the set of criteria that the Deputy Sheriff agreed need to be resolved in writing, I can see material issues that are politically sensitive without resorting, as you do, to the assumption that it's all about bribery.
You've been going on here about "bribes" for some while, I think. I'm sure we all get it. Zim is a dodgy place and ZimGov are dodgy folk etc.
I'm not naive about the risks and I think there will come a point in Q1 (if not sooner progressed) where scepticism might be justified; but so far, I am comfortable with the narrative.
More fundamentally, however, as anyone who follows my posts knows, I basically don't give a floss about 'historic parcel' spikes to trade. I'm much more interested in the sustainable evolution of the business. So I'm vastly (oops) more interested in the emergence of operating surplus at BPPM than in the 'historic parcel'.
ASI: oops. I was just debating an interesting issue in a spirit of goodwill. I'll keep in mind not to do it so much in future with you. Good luck with your investment and busyness.
ASI: *2024.
Just a typo :-)
ASI:
1. Does FCA regulate what Plc foreign subsidiaries of the Plc do? That would be wildly ambitious for a body that can barely wipe it's own farce.
2. Royalty and tax. Not the same thing in any normal context. Does FCA have precedent for legal judgment that they are in this particular jurisdiction and scenario? I bloody doubt it.
3. Can AP and ZimGov work out mutually convenient terms? Well now, when it comes to commercial discussions that are "politically sensitive", I expect all kinds of things to be on the table.
Anyway, to follow on, I don't personally see a big downside to the AGM headroom request.
1. Yes, it's Vast, so yes, they'll use it. Let's get over that. IMO.
2. But the current ~£6.5m m/cap would only need to become ~£7.8m to absorb the dilutive effect while maintaining the current SP.
IMO, that's not a big hill of beans. Am I sat here thinking this company is a good buy at £6.5m but a poor buy at £7.8m?
No. I'm sat here thinking this is a cheap company under £10m and could return to the £20-30m range in 2924 quite easily, therefore I don't give much of an *rse about the AGM headroom request.
Just my take on it.
ASI: I see where you're coming from. A possible low-price equity raise to get the cash side of royalty paid.
But to be honest, I think the company would take a bridging loan for that. Or if really squandering equity raise in December for that, then presumably on the back of an SP surge.
My hunch is that he's setting up the headroom for Q1 and probably more for the "general working capital" than for diamonds.
Or at least I'd hope so.
Gizabigrise: well, there's currently (what is it?) 4.35 billion shares in issue, which is most of the existing headroom. Another 1.1 billion takes it to 5.45 billion or so.
So we're talking about around 20% dilution.
People should read the letter on the company website 🤦
They want shares to the nominal value of £1.1m. Nominal value is 0.1p so that's 1.1 billion shares. It's been up there for days.
ASI: the AGM is asking (I believe) for another 1.1 billion.
Gizabigrise, ASI: my point about the company knowing anyway goes back to my experience of meeting AP for the first time in H2 2016. I couldn't make it to the AGM in London so he kindly agreed to see me in Bucharest. He was not a Plc Board Member of the CEO yet but was running the Romanian subsidiary.
As I recall, pretty much the first thing he did was to read off my then current shareholding back to me from his computer screen, irrespective of the fact that I was holding via Interactive.
It's the same way that you can go along to a shareholder meeting even if you hold via Halifax or whatever. The company still knows who owns what voting rights.
ASI: thanks for pointing that out. I'm unclear whether that portal currently operates as a duplicate process or as a total replacement. I suspect there's currently a lot of duplication in practice anyway.
However, as regards the company's knowledge of shareholdings, irrespective of self-declarations, my point stands that the company can already see that.
MickR:
RNS 4 July:
"... the Deputy Sheriff was again instructed to uplift the parcel on 29th June 2023. Also in attendance were the Company’s lawyers.
"Upon attendance at the RBZ, and in consultation with the bank’s internal legal counsel, the Deputy Sheriff agreed that the RBZ would confirm, in writing, the process that would define the procedure for the orderly and secure hand over the parcel to the Company, which includes the procedure for valuation for royalty purposes, export permits and Kimberly Process Certification.
"Thereafter, the Company and RBZ will put in place logistics for the removal of the parcel attached by the Deputy Sheriff under the writ of execution."
***
If an RNS lands that ticks off the RBZ's written confirmation of processes - which is obviously something that needs political oversight, hence why the election delayed things - then we move from regulatory issues to logistics, or even (though less likely IMO) skip directly in the newsflow to company receipt of 'historic parcel'.
I think either step forward would be very well received by the market. In terms of what that means by way of SP rise, it depends on circumstances. Current m/cap is around £6.5m with BPPM transitioning into surplus - but also with ongoing overhead and operating costs across the Group that will require fundraising (per the company's own Final Report) because BPPM and Tajikistan cannot yet support those.
So I think an upside move of 100% on *very material* diamond progress is entirely possible; but I suspect it would be traded fast if such news comes this autumn.
Just IMO.
*its shareholders, not it's.
Autocorrect playing auto-error.