The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
My own opinion (FWIW) is that we're unlikely to see any cash changing hands in the immediate future for our shares.
I think it's more likely someone , be it one of the big iron ore miners or a Middle East investor, will agree to fund the stage 1 (12mtpa) development in exchange for a percentage of Zioc. Perhaps as much as 50%. This would of course dilute us considerably but would result in us being shareholders in one of the biggest fully funded iron ore mines in the world.
In terms of valuation, assuming the investor put in $3 billion for their shares that would give us a company valuation of around $6 billion, or an individual share value of around $5.
AIMO
Yes, definitely reassuring to see the reduction from Astaris.
For a hedge fund to be increasing their short always gives me a slight concern that they have some inside info we're all missing out on.
On this occasion I have no idea why Astaris were increasing recently but at least they're now doing what I would expect.
All being well this contract is just the first of many to come. We could hopefully get out the other side of the SFO debacle a stronger and better company. If we continue our diversification into renewables we could end up bigger in the long run than we ever were.
Yes it really is about time to see some big news. Iron ore mines are back in favour, it must be our turn soon.......
Exact losses of the shorters are somewhat irrelevant to us anyway. We don't need to care.
We're all long on this share and today has been an awesome day for any holders of this share but in particular anyone who's been holding long term like myself
No problem Johnny. Not having a pop at you, just the figures on that website are nonsense.
In simplified terms Astaris borrowed 1.4% of Petrofac shares (roughly 7 million shares) and sold them for 49 pence each. If they had to buy the 7million back today it would cost them about £2.5million more than they received when they sold the shares at 49pence.
These are very rough figures but should give an idea of the losses they suffered
As far as I can make out Astaris are not a big hedge fund. I expect even a £2.5milion loss would be enough to significantly hurt them
Great and very welcome news today. I'm still a long way off breaking even but reassured about the company's future after today.
Not sure where these nonsense figures are coming from though regarding shorters being down £800million.
Absolute rubbish.
The mcap of the whole company even after today is only about £435million.
Taking Astaris as an example. Assuming their whole position was taken out at 49pence (which it wasn't) they would still only be down about £2.5 million today. Not an insignificant amount but certainly not in the hundreds of million.
It's hard to understand the collosal amounts of money being put into Simandou when for a fraction of that money Zanaga could be developed and producing. Pound for pound it's difficult to see how we aren't the better investment.
"PRO_TRADER" is either a troll or someone with the deluded belief that his comments on here will make a difference to the price he can buy in at.
If we were all chartists we wouldn't be invested here.
Yes you can call this a speculative investment but most of the people here have been invested for many years and are fully aware of the risks and potential rewards with this share.
"The Belinga iron ore deposit is located 500km east of Gabon's coastal capital of Libreville, and is expected to produce some 30 million tons of iron ore annually. The project is the country's largest investment and one of the largest in the region. It will include building the Belinga iron ore facility, a deep-water port in Santa Clara and 560km of railroad track from Belinga to Santa Clara in order to export the iron ore. It also includes two hydroelectric dams to provide power to the Belinga facility.
Originally project costs were expected to be USD3.5billion; however, at the time the mineral rights agreement was reached in July 2008, it was reported to be around USD790 million."
The above copied and pasted from a website called Banktrack.
Reading all that it seems odd that anyone would pursue the development of Belinga as a preference over Zanaga. I suppose the fact that FMG don't have to pay for the mine (ie Gabon government will give it to them for nothing as long as they develop it) whereas if they want Zanaga then there will be a financial cost to purchase the mine before you even start developing it.
Drago, nothing wring with a 6p average. My average is more like 10p. I would have bought more at 2p/3p but my money has been tied up elsewhere for the last couple of years now so I will be just retaining my core holding.
I can see both points of view regarding ultimate share price here. Shrewd you are probably right the share price isn't going to be suspended for an immediate sale at £2 or £3. However with the size of our mine and quality of the ore there's nothing to say that the mine won't eventually be worth in the £billions. It is just a long way from there at the moment.
Have you seen the MCap for Sigma Lithium in Brazil. I appreciate that Lithium is the flavour of the month and the mine is in Brazil but looking at the scale and life of the mine it doesn't even seem to come close to Zanaga in terms of potential long term income. In fact I don't know of any undeveloped mine other than Simandou that can be compared to Zanaga in terms of resource.
Not sure that's quite right ATG.
At IPO price of 156 pence, ZIOC owned half the mine and had roughly 280 million shares.
ZIOC now owns 100% of the mine and has 593 million shares. So dilution currently stands at around 6%. Not too bad after all these years.
I trust that no one is Lion.
You're probably right ext. Just wishful thinking on my part.
I take some comfort from the fact that Glencore had to agree not to sell their shares (without directors consent) for the first 6 months after them being issued.
I optimistically think that might indicate the ZIOC directors are of the opinion that something will be happening within 6 months that will negate anything Glencore can do after that time. Of course this could just be wishful thinking.
It takes very little to move this share price either way.
As such I think it would be virtually impossible for anyone to build up a notifiable stake in the company without a major change to the share price.
I got fed up with the uncertainty here so contacted Glencore. It appears you are correct Mitch. The "sale" of the Zanaga mine by Glencore actually refers to the exchange of there 50%+1 share in the Zanaga mine for a 48% stake in ZIOC (the owner of the Zanaga mine).
I have voiced my irritation with Glencore regarding the wording in their investor presentation, pointing out that the definition of a sale is "the exchange of a commodity for money" however it doesn't change the fact that the imminent sale I was looking forward to is probably not so imminent.
Agreed nibj. I sincerely hope there will be some more progress in 2023. Of the 3 business' Glencore listed as "Sale Pending", Zanaga is the only one of the 3 without negotiations being underway (as far as we know).
Now Glencore have decided to act I don't think they will hang about. I'm optimistic there will be news incoming sooner rather than later.
Glen's lack of action over the years has been incredibly frustrating but at this stage of the game I'm very happy to have them on board and hopefully taking charge of negotiations.
There's no doubt everyone will take ZIOC a lot more seriously with Glencore onboard than they would without.
Exactly. If those 2 directors can't arrange a sale then no one can.