The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Iron ore spot price up another 10% this morning!!
Surely someone (with money) must want to develop this mine.
I largely agree with you Sooty. I'd be surprised if there was anything significant in the next RNS. In defence of our BOD I'm not sure what more they can do other than continue mincing around doing cost saving/EPP/etc studies and trying to conserve cash.
IMO it is the Glencore BOD we should be irritated by. If they do nothing then I don't really see what our BOD can do. We don't have the money to develop the mine and unless Glen are on board we can't do that anyway. As for a sale, I can't see anyone buying our 50%-1 share without Glencore's half as well.
AIMHO
Exactly!
If Glen had invested in this 5 years ago they could have been producing and benefiting from this right now. With Iron ore at the current prices there would have been massive profit in our ore. I know hindsight is a wonderful thing but surely Glen must be thinking this has been a missed opportunity.
I am tending to agree with most of what you've said there Kongolasse and respect your decision to reduce your holding. As you've suggested I think the biggest stumbling block is the people/government running the country.
Personally I'm still fully invested and unlikely to sell any time soon. I think the resource is of such a size and value that eventually it will be developed. I just hope it's sooner rather than later.
It's unbelievable considering the current value of iron ore that no one is benefiting from the resource.
One thing I will say for you Mr Rambo. You never fail to make me laugh.
For that I am grateful.
Thanks for clearing that up Extrader. Yes I had forgotten that Glencore/Xstrata buyout option was only valid for a limited time period.
Is it the case that if Glencore buy us they have to use NPV as a valuation method whereas if we're sold to a 3rd party we can be bought for whatever Glencore and our BOD agree to sell us for?
Not particularly pleasant reading.
After reading that it does make me wonder who (other than possibly the Chinese) would ever buy a mine in this country whilst he's in charge.
Absolutely right Aberdeenman.
There was nothing to say so he's just given us an RNS as a courtesy or you could say as he is obliged to do so to let us know he is still alive BUT there is no news yet.
I don't enjoy saying it but I'm fairly confident we'll just be getting another can kicking RNS when they finally deliver it. If there was something interesting to say it would be easy. As there is no material progress they are struggling to find anything worth writing in the update.
I'd love to be proven wrong and am still heavily (for me) invested here but I really think our directors are just passengers like the rest of us. The only people who can make a difference here are Glencore.
AIMO
"3-for-1 share swap coming soon IMO. DYOR."
3 Glen. for every 1 ZIOC ???
That would be nice.
I know I shouldn't rise to the bait but Simon could you explain why Glencore having a shareprice of £1.19 has any relation to what price ZIOC could be sold for?
Glencore's current MCap is approximately £16 billion.
In relation to the dilution as has been pointed out to you previously, if ZIOC is sold for any reasonable amount of money (ie anything more than £100 million) then dilution of 10%, 20% or even 50% will still give most current shareholders a very healthy return on their investment.
I guess they have been holding it until iron ore prices and the political and financial situation in the country get to a more favorable position.
You're right, they have been missing out massively compared to the other big miners with respect to cashing in on decent iron ore prices.
Let's hope they agree with us and decide the time is now right to realise the asset in whatever way they see fit.
From my point of view I'd be most happy with an outright sale at a decent price.
The problem will be Glencore IMO. Being in a partnership with them is a double edged sword. On the positive side it gives us strength and will hopefully reduce the risk of government or others helping themselves to our share but on the negative side, if they don't want to sell there is little we can do as I don't think anyone will be keen to buy 50% -1 share.
We are frustratingly in Glencore's hands.
I would be happy with 300,000 shares. That way even after the staff share incentives I should own 0.1% of the company.
Does anyone know who Seritza is?
I understand they took on the shares from Artemis Trustees but would be interested to know who is behind the companies.
Hi extrader,
Agreed. Glencore seem to have no appetite whatsoever to develop this mine (or they are just playing their cards very close). I don't consider this to be a bad thing as it does suggest they might be open to sensible offers for the asset. It's got to be a positive to any potential buyer that they would have the option of buying the whole mine and taking control because our 50%-1 share will never be a controlling stake.
Sooty,
In my opinion a raise is a possibility but in all honesty ZIOC have not had any money (in business terms) for years so I don't really think much has changed. Even if they diluted the business by 50% (which doesn't seem likely) any sell out would still see the shares being bought for multiples of their current price.
I do consider this a high risk investment, primarily due to the location of the mine but I'm still of the belief that the company is in a better position now than it has been since I've been following it (approximately 3 years).
As I recall it Glencore said they would sell assets at the right price. I don't recall any specific mention of Zanaga.
Agreed with you DrR. I can fully understand why someone would choose not to invest in ZIOC. I do consider it to be a high risk investment as there are a lot of things that could prevent the mine being developed. However, to have been invested for 3 years and sell now doesn't make much sense to me.
In my opinion we are currently in the best position we've been in for at least the last 3 years.
But also could be being more active because there is finally something worth writing about.