Every now and then I come across a share that I was not expecting to find and that I’ve never heard anything about before, this is a classic example of one of those shares.
Yesterday Zanaga Iron Ore Company popped up on my radar due to a very strange action in the share price and some very large trades moving through a stock that typically sees very few trades per day.
This much un-loved stock may actually prove to be one of AIMs biggest movers this year!
Let’s start with the fundementals
Shares in issue: 279m
Free Float: Approx: 75m (27%)
Current MCap: £17m
52 Week High: 212p
52 Week Low: 4.6p
All-time High: 212p (No dilution since this high!)
All-time Low: 1.35p
Cash in Bank: Approx $4.5m
Zanaga Project Details
The bare fact is that the company sits with a mineral resource situated in the Republic of Congo that is one of the world’s largest with up to 6.9bn tonnes and of which 2.1bn is iron ore at a 66% fe. These figures have been produced in compliance with the key JORC code and the iron ore NPV (after financing and net of production and transportation) has been valued at anywhere up to $966m net to ZIOC based upon the current iron price of approx $55/tonne. (If the price of Iron Ore moves back closer to the $80 range then this puts the value up to $1.4bn!!)
The project is a 50/50 collaboration with Glencore ($40bn Mcap), with Glencore hold 1 share more than Zanaga to give them control of the project.
Zanaga management have been playing the long game this last two years, steadily progressing the project through, in the most important instance, the ratification of its Mining Convention and the lodging of the Environmental Permit that is now VERY OVERDUE and that will be another potential major milestone in the progress towards exploitation of this world class ore resource.
Next Catalyst
This project is waiting on the Environmental Permit to be obtained, this was expected at the end of the 2016 fiscal year which means it is now several months overdue and can land any day now!
Once the permit has been agreed this could spark a chain…
Good call.
