The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
No large sells on the table, just small sells likely from small punters with stop losses. MM's could actually have dropped it specifically to fill that order.
Somone bought 250k shares worth �162.5k at 65p so clearly think this is going north.
Not sure it will alter the deal to be honest. Rhum produces 5% of UK gas needs so plenty of revenue coming into government coffers. R3 to expand on this significantly, so very much in our and UK interests to proceed with developing this field. Similar to last time, they wont let US sanctions impact UK assets and revenues, so will likely set up an escrow account to hold IOC's share of the gas sales. Part of the deal included BP obtaining a waiver from US treasury - which may be possible, but even without we can continue to operate under the support of the UK government, just without using US contractors. Also Trump's intention is to get Iran back at the negotiating table to improve the terms that he feels are deficient in the current agreement. So once this happens, sanctions could be lifted fairly swiftly. But we'll need to see what the flag burners do first.
If they cant access the funds from production, how can they access funds from a sale? If we can take the full ownerhsip that would be great, but then surely part of the reason BP offloading this was due to possible sanctions. If IOC sellout wouldnt BP be better holding it themselves?
All other countries to continue with the deal. No US invovlement in current production with cash flows from Rhum held in escrow. UK government wont allow this to impact our own energy secruity. SQZ to continue to profit. Not sure if IOC would want to sell their 50% share...
�2 would value us a pittiful �566 million for a 50% share of a potential $500 billion asset
Another element to add into this is that the current stage 1 and 2 production is based on the 770MT proven resource. C. 50% of the asset hasnt been drilled enough to prove up the remainder, so we could actually be looking at a mine with potential 90 year life, or significantly higher output than the 30mtpa planned now. Could easy go to 45mtpa or more. Once that is factored in, even the 10% value proposed would significantly exceed the �3-�4 proposed. As others I'd be made up with that as a buy-out if it was accepted, but personally think there is much more room for a higher target of �7-�9. Ultimately will come down to who is interested and how busy the auction room is on the day!
Latest profitability based on IODEX closing price yesterday. Remember that iron ore was over $75/ton a few months ago and is rising again. $22.65 premium for 3% higher grade = $7.55 per % 66.6% FE = 4.6% above 62% benchmark = $34.73 + $67.44 = $102.17/ton Stage 1 Opex costs reduced to $24/ton (top end estimate) = $78.17/ton profit potential 12Mtpa = $938,040,000 9 years = $8,442,360,000 Stage 2 Opex costs reduced to $22/ton (my estimate) = $80.17/ton profit potential 30Mtpa = $2,405,100,000 21 years = $50,507,100,000 Total profit over 30 year life = $58,949,460,000 ($59 billion) Less $4.4billion capex = $54,549,460,000 ZIOC share = $27,274,730,000 (�20.5 billion) 283,201,033 shares = �72.23 per share And remember this is only the 770 MT proven so far, we have further 2.1 BT probable and 6.9 BT resource.
IPO 2010 at �1.56 per share with MarketCap �437 million Original Mineral Resource of 3.34 BT (Billion Tonnes) 25km of 47km strike length tested >178,000m of drilling complete Magnetic Survey showing key areas of resource further North & South 50/50 Joint Venture with Glencore $350 million spent to date on project. Glencore spent $106 million on PFS (Pre Feasibility Study) Glencore spent $150 million on FS (Feasibility Study) Proven Iron Ore Reserve of 770 MT (Million Tonnes) Probable Iron Ore Reserves of 2.1 BT (Billion Tonnes) Total Mineral Resource of 6.9 BT (Billion Tonnes) 5th Largest Ore Reserves Globally Benchmark Iron Ore Product 62% iron, 2% alumina and 4.5% silica, among other gangue elements. 6 month average spot price of $70/ton Zioc offering 67% iron, 0.8% aluminia and 3% silica � higher grade, fewer impurities $22/ton premium for 65% iron, approx. $35/ton premium for 67% iron. Indicative selling price of $102/ton Average LOM (Life Of Mine) Operating Costs of $30/ton Profit potential of $72/ton Proven 770 MT x $72/ton = $55.4 Billion Probable 2.1 BT x $72/ton = $151.2 Billion Resource 6.9 BT x $72/ton = $496.8 Billion Stage 1 Capex $2.2 Billion Stage 2 Capex $2.5 Billion ZIOC 50% share = $27.7b ($97 per share), $75.6b ($267 per share), $248.4b ($877 per share)
It's up massively from the lows of yesterday and still very much lower than its previous highs before the port was confirmed. Remeber people will be jumping on board from seeing the extra 10% made this morning. Very little float so some games will be played to try and get some shares. ZIOC will not be developing this mine, so we dont need to worry about a 4 year build. it's very much an asset that will be sold well before then for multiple pounds per share.
They are basically starting the process to expropriate the land and have the relevant authorities in place to ensure this is done fairly and true owners are adequately compensated. Doesnt seem to be an issue for the Chinese tho as they've already cleared part of the land for their allocated area for their new MPC potash processing facility.
Dont forget that the Chinese company Evergreen (who own the MPC potash mine) have already started contruction of their allocated space at the new port. There are pictures of this actually happening and you can clearly see the development on google maps. Pointe-Noire is their main city apart from Brazzaville, so was under no doubt this would be the priority. Sounds more like they need to "officially" release the land whcih hasnt quite yet happened but to all extents and purposes it has already been unofficially allocated.
The area in question is north-west of the oil refinery which is easy to spot and is located on the coast amoungst an area of trees and vegetation. There are a number of tracks (vertical and horizontal) on the adjacent plot which was cleared for various suveys.
They could do, but it wouldnt absorb the volumes of ore we are looking to produce. Remember China needs this themselves back in China to feed their own mills for their own steel supply so they will happily take the bulk. It would however reduce some risk as gives direct source to market in RoC
�2 is ridiculously undervalued, yes its a good return from where we are today, but not when you consider the HUNDREDS of BILLIONS in profits over the life of this mine. �2 would value ZIOCS half at �558million which is absolutely nothing.
Anyone care to look at some aerial photos of this location within the RoC? It's the location of the new Pointe Noire Port Google maps show a particular area of "activity" which is for the potash project (owned by the Chinese) Bing maps shows no such activity. The question is, how recent did this "activity" commence and what does this signal?
I am of the understanding that there are some major material developments currently ongoing in the RoC. Lets wait and see what ZIOC have to say ;)
$22.65 premium for 3% higher grade = $7.55 per % 66.6% FE = 4.6% above 62% benchmark = $34.73 + $75.95 = $110.68/ton Stage 1 Opex costs reduced to $24/ton (top end estimate) = $86.68/ton profit potential 12Mtpa = $1,040,160,000 9 years = $9,361,440,000 Stage 2 Opex costs reduced to $22/ton (my estimate) = $88.68/ton profit potential 30Mtpa = $2,660,400,000 21 years = $55,868,400,000 Total profit over 30 year life = $65,229,840,000 ($65.3 billion) Less $4.4billion capex = $60,829,840,000 ZIOC share = $30,414,920,000 (�22.8 billion) 278,780,000 shares = �81.82 per share And remember this is only the 770 MT proven so far, we have further 2.1 BT probable and 6.9 BT resource. How much will a buyer be willing to pay to secure such vast future profits?
Indeed, the talk of the $2bn owened to Glen and Trafigura is trivial compared to what they owe China. China is moving to secure future profits from the RoC natural resources and will use this as leverage to get the best deal and advance the projects as quickly as possible.
Exactly, buy and hold. There will be very little warning of a takeover which is when the mega returns will be made. Of course news will leak on advancements of key catalysts leading to any takeover (port/SEZ, debt etc), unless as part of RoC debt restructuring they sell part of their 10% stake for a set amount. This will then lock in a clear market value of our asset so may re-rate in the blink of an eye. There is a very real risk of being out and watching on the sidelines.