taking a good look

Hi Folks

I got into this because I see opportunity from adversity.
I also saw my ex colleagues at macquarie were into it for a not so modest 8%.

i will just give my quick view and will follow up after i give this a thorough look over during the weekend.

1. The rumour that a broker said this is going into administration has got their hand on it. No chance.

2. Listening to the exec chairman, I came to the conclusion the ZYL team is a tight knit one and quite professional indeed. I mean the south african team all got up at 2 am in the morning to do a teleconference interview. Its the little things that often tell you about the caliber of people you have.

3. The delays have caused in part by the Mbila conversion of resource to reserve classification to justify the project fundamentals, and the conditions of the contract which seems to hinge on proving up a certain mine life.
From what i can work out listening to him, they smelled a rat, chased it down like rats, called in other expert rats, then called in some more, before they determined, based on the orebody being defined in the contract didnt stack up.

4. legally this looks solid. What management has done which is critical in giving the vendor NO room to riggle, is kept the vendor in formed every step of the way, making sure the vendors people were involved in the due diligence. then when the workshop was called, made sure the vendor was present with the external experts.

5. The vendor has openly acknowledged there is a problem with the deal for the reasons outlined here.

Do I think this is going to court? No
Do I think they will acquire the project? yes
Do I think the vendor will take a serious haircut on the agreed price yes and the chairman has hinted the other side know its inevitable.

The game man ship going on here is I believe is ZYL management are saying the deals off give us the cash back. Im still yet to pick over the terms of the contract so i do not know how strong that position is. The reality is they really want the critical mass the project offers, but want a serious clip in price paid. They will get that and i dont think the vendor is even trying to suggest they shouldnt.

Now I do not give a rats arse about the past people, I will judge this as i see it now. If you took a hiding grow up and either move on, or research it and decide whether you should take a loss or buy more. But taking your incessant management bashing whinging to someone who cares. Because I do not want to be mistaken for that person.

There is work to be done here.

Will be in touch

Flux