Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
There will be dilution if Newmont take more ownership. I’ve found a post from the summer by Professor1, which I thought was useful:
This is the way I see ( for my own planning) the implied values BASED SOLELY on the expenditure by Newmont. Obviously I would want the market values to be significantly higher than implied values below once the drill results are built in:
Currently, the total shares in issue are as follows:
Total 150m shares
Newmont 29.8 m shares (19.9%)
Others 120.2m shares (80.1%)
NM will initially pay us $2m plus spend $10m for additional 31% increase in their stake.
So $12m represents 31% additional stake in Omi.
This gives implied gross 100% value to be approx $40m.
The revised shareholdings will be:
Total 254m shares
NM 134m shares (51%)
Others 120m shares (49%)
The implied gross value of $40m ÷ 254m shares will give us an implied value of around 16 cents or 13p.
Now take take the next level of expenditure. NM will pay us a further $2m plus spend $20m in return for increasing their stake from 51% to 65%.
i.e. they are giving away $22m for an additional 14% increase in their shareholding. Therefore the gross 100 % value becomes $157m.
The revised shareholdings will be:
Total 343m shares
NM 223m shares (65%)
Other 120m shares (35%)
The revised implied gross value of $157m ÷ 343m shares would give us an implied value of 46 cents or 39p.
Now, these are just implied values based on what NM are going to spend and obviously does not take into account any drill results.
Please do your own research and do not take the above as advice of any nature.
Hi ezlee87. I think Newmont would have looked at the potential with the restriction removed and taken a view that it can be removed. However, whilst they are contractually obliged to make a minimum investment in Year 1, until they know where the restrictions remain, it’s difficult for them to make a meaningful investment.
My view is the forest protection restriction is the reason why Newmont can’t move forward. Until the restriction is overcome, not sure there is a viable project and explains why they have only committed limited funds to date.
Agree Rocklawn. Also, I can’t help but feel positive about the ‘Private Placement’; my understanding is it’s to a specific investor(s), therefore investment in ZEN and unlocking further potential. My view anyway. Onwards and upwards.
Appiamma. I think the last two weeks have been positive and I’m genuinely excited by the future here. I won’t let an RNS on a Friday about a placing in Norway change my mind. The sentiment on here about AC and his presentation on Wednesday has been positive, yet we get the negativity on this RNS. Have a good weekend all.
From what I see, ZEN are ramping up production and drilling and need more funding as they see big potential. Yes debt is the preferred route but maybe this placing is necessary. AC has a lot at stake personally and IMO will be acting in the best interests of ZEN. This constant criticism of him as if he’s deliberately messing things up is exhausting to read.