It seems to me that investors want instant gratification and are no longer willing to invest long term. It is my belief that holders who stick with this stock will be rewarded as funding and production begins with the added possibility that at current values the shares will attract a bidder. With todays drop the downside has, in my view, been illiminated and the stock is an interesting investment for the longer term. There is considerable value in the ground and getting at it will generate growing income in the medium to long term.
First i need to be clear that i don't have alot of knowledge in mining stocks but i do have around 500,000 shares in this one.
However, I have ran many businesses including my own which became a PLC and it seems to me that the real nugget in this announcement is that they believe they will get third party financing for the early extraction. This means there should not be a call for more cash from shareholders in the near term.
Is there anything else i am missing? All constructive views are most welcome.
It seems Andrew Trahar is at least giving everyone the same short answer, without any detail on the scope of the news... but this must clearly be fairly complex as it is taking quite a long time for the final text to be agreed (with much work going on in the background on funding, ports, etc. and is surely not just waiting on receipt of the delayed beneficiation trial and input on its suitability for the Chinese steel industry.
The news must surely be good after so many years of work at very high cost (£300m+ by Zanaga alone, plus Glencore's contribution/buy-in), with so much high quality ore proven in-situ with firm plans for cost-effective routes to market for 30+ years of very large scale production.
Iron ore is a key ingredient in the production of steel. We principally market iron through physical transactions. In addition, we have interests in early-stage iron projects in the Republic of Congo and Mauritania.
No mention of ZANAGA at all in the full report delivered by Glencore today, and little interest shown in iron ore. Only "For 2018, while overall supply of iron ore may increase, we could see a decrease in low grade cargoes exported to China."
I suspect Glencore may prefer to sell's its whole interest (with Zanaga's) to the Chinese... but who knows. The production plan (beneficiation, pipe, port, etc.) looks fairly solid now, despite no promise of funding by Glencore of Zanaga... both of whom will want to avoid significant debt given iron ore volatility.
The deal proposed much be close to publication... but what/when/how will be crucial to Zanaga shareholders like myself. Will ZIOC want to maintain a royalty or "free carry" position to stay in business or just crystalize the entire benefit from the project in a one-off deal?
News on Friday or Monday I feel now, post the Chinese New Year...
Glencore are expected to produce good profits and they will surely wish to fund the development of Zanaga. The big question is how they will proceed, will they buy out Zanaga and then fund development or use their substantial resources to continue with the development as originally envisaged. Either way shareholders in Zanaga are well placed to benefit from their long period of patience. I believe there are very few shares changing hands and long term holders are awaiting their reward. Roll on Wednesday.
This is essentially still the plan with recovery in the price of high quality iron ore, given that plans are now firm for port upgrades and additional electricity supplies and permits in place for mining.
Funding needs the Chinese to make commitments... hence the final independent checks on FE content post beneficiation.
Could see real progress next week... but £2 a ZIOC share is more likely than £3+. Fair value is subject to hard negotiation and faith in future iron ore demands and prices... but IPO investors (who will want a profit after all this time/effort) paid about £1.50 a share, there has been no dilution through the release of more shares, $300m + invested so far and the plan does look much more solid now, with government and Chinese backing... At £2 a share, those with > 500,000 ZIOC shares could become millionaires with an outright buy of ZIOC, but there are lots of possibilities in terms of off-take agreements, partial buy-outs, etc.
I suspect that a relatively low percentage of ZIOC shares are actually being traded as most long term holders will not want to be out with news so close... which includes myself.
Report due from Glencore on the 21st February. That will probably coincide with the companies intentions concerning Zanaga. As I see it some clear plan for the development of the site jointly owned by Zanaga and Glencore will be forthcoming and will either include taking out Zanaga, selling the site or entering into a joint venture to cash in on the substantial resources at a time when iron ore is in demand and holding a steady value. Whatever happens there seems a very real prospect that Zanagas true value will be established before the end of this month and that must surely be substantially more than the current market value. The rise in the value of iron ore over recent months must make development of this substantial resource worthy of urgent consideration.
IPO in Nov'10 added 39.8m ZIOC shares priced at £1.50 to give 280.4m shares on AIM; reduced to 278.8m through share buy backs... none issued since; work to plan (delayed whilst iron ore prices were low); permits now in place; ore proven; piping to port plan in place; beneficiation work nearing completion - project could be launched mid-February...
Volatile ZIOC share price... should get back to £1.50, possibly as much as £3 within a few weeks if you believe the facts line up with the strong possibilities.
Why no interest here? Are there no other ZIOC shareholders who chat through III?
115,000 at 14.75p
115,000 at 14.70p
100,000 at 14.23p
231,053 at 15.1437p
This may set the scene for increasing demands and trading volumes for the next couple of weeks at least, pending the expected mid-February update on ZIOC plans which is likely to have more dramatic effect, especially if the "independent" beneficiation report is favourable (as expected) and financial (including off-take) terms are agreed for the overall project to proceed as permitted, and facilitated through port upgrades being funded by the Chinese.
I agree the floor could rise above 14p a share from today's trading... but it is "day traders" who are pushing the price up/down the most at present; lot's of small buys to raise the price and get interest from new buyers, then a race to sell near the top to take profit, repeated...
My ZIOC purchases started at £1.07 a share back in August 2011, then I averaged down with quite a few purchases in the 20's, 10's and finally doubled my holding with extra shares at just 1.5p when the price of iron ore was very low - giving me my current average of 5.65p a share.
Strangely, despite my hope for ZIOC's Congo' holdings to be bought out for c.£2 a share (or better), I'm reluctant to buy more ZIOC shares just in case this all goes wrong... probably because, at 15p a ZIOC share, I've already got more invested in ZIOC than any of my other share holdings.
There are going to be big changes here in the next few weeks - I just wish I knew what!!! I can only wait and remain optimistic given the facts as I know them... others with a lot more invested must have even more "butterflies" over the future.
Lets hope that the 2p rise (13.30hrs) sticks and its PI's getting in on mid Feb progress report.
Who knows by close of play it could be 1p up or 3p up as I believe we have a new floor of 14p for a few days.
Why so quiet here, when the company is so close to capitalising on its investments and extensive work over quite a few years now to prove up their high quality iron ore resources, and the means of benefication and delivery with the help of Glencore, the Chinese and the Congo government?
I still consider the share price of ZIOC could easily leap above the £1.50 IPO price, up to fair value of above £3 a share for their 50% of the resource rights... or some lower amount retaining a "free carry" share. Still at the same level of shares on the market.
ZIOC stated we will hear more by mid-February, delayed from end 2017 waiting on completion of the independent benefication report. The FE levels are world class and the resource volume is in the top 5 globally; and iron ore prices are strengthening with demand exceeding supply... the port development is ready to go with $2billion Chinese funding - this can only be for the Zanaga resources.
Africa is back at work from Monday as most of it closes down over Xmas so any news due should be coming then a perfect T20 trade I reckon this should motor well past 25p!
Chinese building the new port, hmm wonder if they will buy ZIOC stake or Glencore's???
With iron ore on the rise, surely it makes sense to take advantage of the situation and get into production as early as possible. Hoping for good news once all the research has been completed. The current movements in the share price suggest manipulation rather than any sound basis for such large girations. I prefer to sit tight in the hope that arrangements will be made to take advantage of the current strength in the value of iron ore.
With the value of iron ore rising at present now seems the right time to accelerate the development of the companies resources. We were promised a progress report before the year end and time is running out!
Yeah well I try not underestimate the ability of the herd to see rainbows in mud. It's a good place to try a trade imv but it doesn't mean it'll work. I still think it goes much lower. Obtaining the environmental licence was a great bit of news but the mania of the herd has destabilised the sp and they will have to be dealt with before progress can be made. All imv of course.
Has a chance to bounce here 10/11p but given the weakness in the face of the much ramped narrative I think 6/7p looks more likely. Down there would close the final gap, hit the 200DMA and complete a nice pattern.
So the short term trading positions being taken in the last few weeks in anticipation of a Glencore news conference decision on ZIOP, didn't work out.
Perhaps now the silly ramping over on the other bb will abate and patience will remain a strong virtue. It looks like the sp today has weathered the disappointment quite well. No real stop loss sell off to speak of.
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