Member Info for Zarro

Assuming this putative offer at whatever price materialises is anyone else concerned about how it would be structured? A purchase of a(n unlisted) subsidiary may have very different economics/tax consequences to a bid for our listed company.......

Thx SF69 - I didn't see that. Personally that feels a bit optimistic but, in any event, would put my base number nearer say £2.50.

I am sharing my back of a fag packet doodling simply to invite corrections / constructive observations:

- Project post tax NPV8 = US$2bn. EMH share US$1bn (£725m)
- Capex Costs = US$650m. EMH share US$325m (£240m)
- Capital raise assumption - 50/50 debt / equity. Equity raise US$160m (£120m)
- Equity Raise assumption at 65p (i.e. 20% discount today) = 185m new shares.
- Existing shares in Issue 185m. Resultant total shares 370m.
- Project value to EMH £725m divided by total shares 370m = £2.
- Until all the other pieces fall in to place one would apply a risk factor to that - say 30-50%.
- Theoretical share price in the near term = 100p - 140p (I appreciate there is much upside to the calc e.g. in assumptions i have employed and current commodity prices and that an eventual producing / operating valuation would be entirely different).

This may help some on here:

HL and II have credited ZNWD shares to my accounts on wednesday 22nd BUT AJBell have not yet done so. I was told this was because there is a reconciliation difference between the number of ZNWD shares AJBell received for their clients and the number they think they should have received. This is being worked on with BCN's brokers at the moment. It might be the same issue with some of the other brokers mentioned in this thread. It will get sorted in due course but it is irritating if you were looking to sell your ZNWD (albeit price rose a bit between wednesday and friday last week!)

Re BCN shares - If you have not accepted the offer then as far as I am aware you can either (a) accept the 67.5p offer via your broker [Corporate Actions?] or (b) sell them on the open market as normal [presently at c67p] or (c) do nothing and hold out as a minority shareholder in what will by February become an unlisted / untraded share with little or no liquidity and hope Ganfeng eventually make you a tasty offer to get rid of you. Not many private Investors would find (c) appealing

For those that accepted by the original deadline - proceeds expected by 31 December.

No doubt someone will correct me if/where I am wrong. Happy new year all.

Hmmmm - 2 x £1m trades... 4 seconds apart ....at the Tuesday lows of 126.42.....

Normal daily volume yesterday but again the vast bulk of it in late-reported larger trades after a stream of tiny A trades......

I need/want to average down a bit further - but whilst I am reasonably confident that there is value here on 'known knowns' the share price action is making me nervous about 'known unknowns'.

Thanks to everyone for their helpful postings this week.

Not sure on the shorting - or at least none above 0.5% being reported. BUT, to my mind, someone either (a) has a strong view that this is a busted flush (i.e. they do not believe the bulk of the adjustments to the reported results are real - notwithstanding the company's clear presentations on them and the analysts recommendations) or (b) they have a very clever programmed Algo (lots of small A trades all day followed by a chunk of larger late reported manual trades, or (c) they are barking.

Doesn't feel like (c).

Cheapsharesboy - I appreciate/welcome your views - and anyone else's constructive input (especially anyone with insight around trading pattern and share price action (which I do not have).

...on no volume and no news. Perhaps MM's trying to stimulate some sellers (for Rozzi to buy up). Any views on likelihood of corporate activity to take out the small public float?

Agree. Very disappointing and seemingly downbeat update. Worse still, totally unconvincing about their prospects. But the share price hammering does now seem to leave the company on a relatively undemanding PE of about 13 with manageable leverage and decent liquidity. If it can return to any sort of growth that would support a re-rating.....admittedly a big 'IF' from here and even then likely to take some time.

Beats me. Volumes are steady with no news. I am no expert but it appears to me that someone is just very successfully and quietly running an algorithm-based programmed trade. Perhaps someone with more knowledge/insight of these things can shed light.

Indeed - if this was something our Board was hanging its hat on in terms of considering whether to formally back the bid at this price, then I agree with you that it probably makes a bid more likely of being recommended at 67.5p - and for everyone's sanity it would be great if it was this week, whatever transpires thereafter.........but i fear not (yet at least)

Jpwh - I am not sure on the legal construct of the 'pre-existing' royalty contract - but you are right - that is the worst case potential position that I was hinting at.
That said, whilst I am increasingly confident that our Board would have ****ed this whole thing up, I am equally confident (hopeful?) that our legal and financial advisors would have had this taken care of in the JV negotiations with Ganfeng. I am also very confident that Ganfeng have invested so far, and plan to acquire BCN, on the basis that the royalty is due. So I think this is a bit of a non issue really. Its just that we can forget any upside from having the royalty set aside.

Jpwh - my understanding is that it is not appropriate the characterise the Orr-Ewing relatives in this way. Arguably it is the other way round. Bacanora granted the royalty arrangement to Colin Orr-Ewing. The issue is that we subsequently (i.e. now ....but it appears woefully late!!!!!) claim this was due to a mis-representation by C O-E in the first place. Page 94 of the annual accounts sets out the position.

My understanding is that it was our 'offence' action that has been found time barred by the court. The status quo (which has been fully disclosed all along to everyone) is that a royalty is contractually due to the estate. The action was one initiated by us to have that arrangement invalidated but the court has found that we do not even have a right to have the arguments heard because we are beyond the time limits.

So it is potential upside from the stats quo that has been parked. We have not lost anything. What I do not know is which company in the BCN group is contractually liable for the royalty. Is it BCN Plc or one of the subsidiaries / Sonora JV.

Thanks M and TD - very helpful. For what it is worth I tend to sit in the Berenberg camp. Regulators have a vital role to play (although they often do so very badly) which should assure everyone that there can be a sustainable business model. But they need to get their head out of the principled theory space and into the commercial real world if they want private sector capital to continue to fund this stuff otherwise the government (i.e. all of us) will end up with an even larger and inexorably growing operational and financial headache.

I am no expert but appears to be very high volume and lots of A Trades suggesting a big seller executing a disposal programme. Anyone have a more educated / informed view of the activity levels and fall in share price?

Appreciate the insights Appleby. Maybe it has been the former Mrs Bezos selling to give to charity. Seems to be attempting a breakout very recently.

Thx Appleby - i learn something every day. Although, being a simple soul, it does not seem right to me that someone can accumulate or divest holdings of more than 3-5% but not have to disclose it until some future date.

Perhaps someone can explain to me how this outfit acquired 17m shares on 29 June when there were only c400k shares reported as traded on that day and the share price saw no meaningful movement.

RedRoo

The Feb RNS was very clear that BCN's US$208 (50%) share was going to be met by (a) cash on hand (b) the proposed equity raise (c) the $150m RK Facility with Ganfeng responsible for the other US$208m.

In my view (c) was highly unlikely to ever be deliverable or acceptable to Ganfeng (due to the security priority and high cost of finance) - without some other compensatory adjustment which I/we do not know about (e.g. via the Offtake agreement or the economic terms of the JV).

That is why I believe the valuation maths is all distorted and whilst we think BCN is worth more than 67.5p, perhaps it is not. The question is - were we misled about this project being really fully funded and/or the terms on which that was claimed to be so. Without being able to include the RK Facility as solely part of BCN's contribution it would have needed to raise much more cash with consequent impact of dilution.