Member Info for Zarro

Thanks Tomcat - also to allay any concerns re a possible impact from the recent right issue vote the HK exchange filing by Ganfeng in relation to the BCN deal states as follows:

(II) Impact on the Company of the [BCN] Transaction
In spite of certain net outflow of cash flow of the Company, the transaction will not have any noticeable influence on the working capital of the Company and has little impact on financial conditions and operating results of the Company for the year 2019.

...spoke too soon!

I think we have got it all wrong; Conn was clearly a shrewd forward thinker who was ahead of his time.....he got the share losses in before the market downturn. Its my only share in the blue today!

No doubt knee jerk sentiment will impact the share price here in the short term BUT we need to keep a sense of perspective. This has nothing to do with this project itself and is much much broader than BCN/Sonora. This is about Ganfeng medium to long term strategy and how it arranges its capital and funding structure. It will have other multiple other options than just the Hong Kong equity market including the mainland equity market and debt for starters.

What's the fundamental difference between the alleged market manipulation over at Burford and the order blocks that we have seen here being moved down and/or withdrawn? I presume they are entirely different issues.....

I can't argue with the supportive stance of the CEO and he will have a far more informed perspective than me.........

Results looked pretty dire to me. Earnings well down; Significant cash absorption; Debt well up (and true leverage revealed with leases now on Balance sheet); Bank facility slashed (and new Bank had to be bought on board); Dividend slashed......AND YET the share price rose even further! I regret to say that I sold my modest investment (that I had acquired in the June dip) a bit sharpish and will wait and see if the current valuation can be shown to be sustainable. In my view it isn't by some way ......but what do I know. Presumably Brokers will be updating their reports soon for what they are worth.

The Market seems to want this kept at 45p for the time being. I wonder why?

Its difficult to understand the VSA valuation basis based on this excerpt provided. My best view is as follows:

Post tax NPV of Sonora $800m x 77.5% (current BCN ownership) = $620m
Post tax NPV of Zinwald $270m x 50% (current ownership) = $130m
Total post tax NPV to BCN shareholders = $750m
Risk adjusted valuation (i.e. 0.6x NPV) = $450m
Current mkt cap (0.1x NPV) =$75m

But all this would / could move (up or down) a fair bit with (a) Gangfeng option over another % of Sonora project (b) BCN option over the other 50% of Zinwald (c) terms for the remaining financing of Sonora and for Zinwald - each partially accounted for in the 0.6x valuation discount.

Whatever your view on the numbers - plenty of potential upside here.

Who knows, and I am only speculating, but it may be that T Rowe just had to shave their position to comply with investment limits (at these lower market cap levels) ....but essentially want to stay in for recovery........

No idea where this share price will end up (emphasis on 'up'). I will leave that to the traders and tech analysts to opine on.

A couple of points to be clear on (at least per my understanding / from the presentation last week):

1 - The 2nd half cash flow of $60m quoted in the RNS is 'Operating' FCF i.e. before interest payments and includes diamond debtor adjustments.
2 - The Project 2022 FCF target of $150-$200m is 'NET' FCF. i.e. after everything, including ALL interest AND - per the call last week - AFTER the re-scheduled $50m of BEE repayments and, I presume does not factor in any movements in diamond debtors.
3 - Note that BEE repayments are also real debt reduction. The BEE debt is included in covenant tests.
4 - There should be no problem refinancing remaining debt at leverage levels under say 3-3.5x EBITDA.

More likely to have a monkey or two on the shares at these give away prices. Lovely Jubbly!

Wolfi - I had read it and have done so again......and I still do not know what it really means. Trust me, I want this week's announcement to include (at least a lot more) clarity on the detail of the funding.....which would allow the fog to be blown away and be very positive for this totally undervalued share price. Cheers

without wishing to pierce the balloon here and maybe I have got this wrong ....but my understanding is that all we are expecting by around the end of this month is confirmation of clearance for the investment by the Chinese Regulatory authorities. The due diligence on cost savings etc is scheduled over the next 3 months or so, and to my mind it is this which will allow detail of the funding arrangements to be finalised. This last bit is the crucial bit for existing investors to know and which will define the value of our shares.

Or, are we expecting the financing detail as well in the next week or so?

Wouldn't want to be out of this stock on a Friday afternoon..........

ps K59 - Well done you.!!!!! My head tells me 150p for now (and then any number you would like to pick) when in production but my wife says........................or is it the other way round?

thanks K59 - I think I will reach for another glass and try and be proper brave on the next dip.....

I am sitting on 0.01% of the pre Gangfeng equity (134k for those on the chilled Sauvignon in the back garden) at an average of 27p - highest 90p. I am not particularly strapped nor have an expensive lifestyle i.e. could easily be 0.2%. Is that 'bonkers' or 'not even trying ' by the standards of PI's on this Board? Ridiculous question but any views welcome - as a sense check. Cheers.

Cut the div 60% to 5p; shoot the Connman (and rest of Board) and we can start the slow recovery to my average entry price. ETA 2025! If some Asian fund buys us in next 12 months I might only be 50% down on my entry price.

Yikes its hot. Is that good?

Do they ....."have to put out an RNS"?