Member Info for shauny86

Sounds like some people got some decent news..

This is an interesting quote:

"Many of the entities we have engaged with have been very clear that they would only invest at the asset level, and as part of a consortium..." - and .."then complete their processes and come on board in stages, as they have outlined to us...".

This makes a lot of sense. Shared risk, and reduced risk, for all.

Is it just by chance that RAM's initial buy-in takes them to 20% of Jumelles at the project level? Matches up with the 20% GIS offtake agreement. I don't think RAM want anything beyond that.

Maybe we'll see the project level look something like this (can't be sure these would be the entities but just as an example):

RAM 20% (including 20% offtake)

Baowu 33.75%

RIO 33.75%

ZIOC 12.5%

or

RAM 20% (including 20% offtake)

Baowu 40%

RIO 40%

Our portion is bought out..

If that was the deal on the table from February, I don't think there would have been the same reaction. So long as we stay out of Tranche 2, anything is still possible.

I don’t think 3 months is enough time for majors to make a move.. if they haven’t made a move in the last 12/18/24 months. And if it’s not about time then it’s about infrastructure and project de-risking. Our only hope is we never get to Tranche 2. This gives 12-18 months for further de-risking and country infrastructure to come into place, and equally the necessary time for a major..

With this deal RAM are in the same predicament as they’ll still need to find finance for the project.. so much so they need AT to support in that process. In which case why can’t he continue to find finance for ZIOC. RAM keep 20% of Jumelles and they pay $200m to fund their 20% of equity, we then continue to find $800m equity to pay our portion of the project (80%).. the market knows this is a sh**e deal

The market is also weighing up different outcomes.. on the low end we 'could' receive:

11p dividend - $125m received for tranche 2 (plus then we sell our 12.5% stake in a construction ready project)

4.5p divided - $50m received for 0.5% royalty

35p - roughly over LOM (30 years of 0.5% royalty)

So short-term there is a 15.5p upside here, which is what the newbies are banging on about. Now when the share price still sits at 6pm.. that tells me the market doesn't expect the above to happen, let alone the best case scenario over 30 years of £7+ per share..

The deal isn't complicated at all.. fairly straight forward.. the market reaction is due to not much of the deal actually being an obligation..

3 sub-tranches - obligated to take at $15m cost to RAM

2 final sub-tranches - no obligation (do we need that $10m or not)

tranche 2 - no obligation (RAM receive Zanaga shares at 15p in lieu of Jumelles ownership - back to square 1 it seems at that point in regards to finance/deal)

potentially $125m from tranche 2 - we could or could not use that for Stage 1 (what happens to our 12.5% if we don't use it.. do we sell it..)

1% royalty - we could end up with 0.5% or 1% depending on RAM buying out $50m for 0.5%

The market isn't confused about the deal, it's concerned about only $15m of the deal being an obligation.. the rest is maybes and what ifs..

The major shareholders only own 42.51%.. of that 5.77% is under Gupta (been selling down - could show he's not a fan of the deal). That leaves just over 36% of the vote for major shareholders. They will need a whole bunch of regular shareholders to vote 'yes' for the deal to go through. But, if the deal doesn't go through, what is plan b?..

Jv123, AT did mention the complexity of the deal as a reason why we languish at 6p, but it's relatively simple and is a pathway to current shareholders realising very significant gains over the LOM. IF we take part in Stage 1 and Stage 2, you're talking £7+ over 30 years of dividends and royalties. And did anyone catch AT's mention of 'this could be a 100 year mine' in the SA presentation. You're talking generational wealth being created for you children's children and so on.

However, do we really believe we can be a part of Stage 1 and Stage 2? I highly doubt we will be. If that was the plan then we wouldn't need the royalty safety net. 1% royalty = 1p/1.5p in Stage 1, and 3p in Stage 2. Fairly pointless when you consider Stage 1 is worth 10p per share per year, and Stage 2 is worth 26p per share per year.

If we proceed with the RAM deal our best case scenario for us would be:

We receive $125m = dividend of 11p is paid out

Potentially receive $50m for 0.5% royalty = 3p dividend paid out

We then sell our part of the 12.5% project for x amount = x dividend paid out

What we sell that 12.5% for is anyone's guess.. maybe $50m.. maybe $1b.. who knows. But that to me, seems like the most likely outcome here, unless a major comes in and takes the lot in the next 3 months..

But, only the first 3 are an obligation, the other 2 are at their discretion.. so do we need $15m or $25m for FEED.. if they only take the first 3 and then don’t take tranche 2, where does that leave us.. $10m short for FEED and no onward plan for finance.. maybe why we’re at 6p..

The 0.5% royalty can be bought back for $50m. This values the 100% of the royalty at $10b. In which case why are we allowing 99% of the royalty to walk out the door for $125m..

Back on, had to make a slightly new username. Previous account deleted. Had to take some time to absorb it all.

My take on the deal is it’s the only one on the table for now. It’s also an open invitation to any majors who wanted in. Make a move now or potentially lose the opportunity.

In regards to the sp where it is and the company saying it may be due to the complexity of the deal. Well, maybe that’s the problem.. why is the deal so complex it needs ‘explaining’. Maybe that’s the problem.

Tranche 1 is 5 sub-tranches, but they only have to take the first 3.. so do we need $15m or $25m to get through FEED? Tranche 2 is optional. 0.5% of the royalty ‘could’ be bought back. There are still so many what ifs and maybes with this deal and that’s why we languish here.