togo deal - background.

Guys, after reading the last few posts and seeing how many rumours are circulating, I thought that I would look into some background on the Togo deal.

Firstly, let me stress, that this is not insider info but a result of a thorough research. This is just my interpretation of events so please DYOR before you make any investment decisions.

On the 30th January 2009, Sultan announced that they are about to acquire large phosphate deposit in Mali, Western Africa.
An initial exploration target in-situ tonnage of 25Mt to 30Mt was identified by independent consultants.

On the 30th March 2009, Sultan advised the shareholders that the agreement to acquire the phosphate project located in Mali has been terminated.

The Co has not given any explanation why the agreement was cancelled BUT on the 1st April 2009 (a day after the termination), Sultan has signed a contract with Arganout to set up a JV company called Phosphate Togo SA (PTSA).

PTSA was set up to jointly develop phosphate resources in Togo.
Arganout, for a fee, was supposed to obtain for PTSA, licenses and concessions within a period of 4 months.

Arganout failed to deliver on their contract so the contract ended.

It appears to me that from then on, Sultan started lobbying the govt on its own and developed its own relationships.

In mid November 2009, in a report to the government, consultants (engaged by the Togo?s govt) estimated that investment of US$180M was needed to breathe new life into Togo?s phosphate sector.
The Govt has accepted the conclusions of the report and started preparing an address to the World Bank.
The basis of the plan was a production level of 6Mt of phosphate and 4Mt of phosphoric acid per annum.

There were two events that happened in Feb 2011 so I can not ascertain which one occurred first:

In February 2011, at the behest of Togo president Faure Gnassinbbe, finance minister A.O. Ayassor re-activated a national committee to oversee privatization of state-owned enterprises. It was to mull the restructuring and then a stage-by-stage privatization of the Togo phosphate industry.

Also in Feb 2011, Togo?s Mines & Energy Minister Dammipi Noupokau and the MD for Mines and Geology Banimbo Gbengbartane travelled to Australia to negotiate the phosphate mine project in Togo directly with Sultan.

In its announcement dated 9th June 2011 the Co confirmed the visit and stated:

?the visit was to assess Sultan?s managerial, technical and financial ability to implement its plan.
The visit achieved all of its stated objectives.
The visitors met with WA ministers responsible for Finance, Mining, Energy and the Environment.
Meetings were also held with Australian mining industry leaders and Sultan?s FINACIAL BACKERS.?


Based on the above info, I can see why the Togolese Govt has opted for the Tender process instead off just giving it to one party.

It?s also the cleanest and most transparent way for Sultan to obtain the project based on the merits of Sultan?s submission, which would also show that the ministers of the current Govt were impartial in their decision and acted with their country?s interest at heart.

This would also be of big benefit if at some stage in the future the Opposition or a future Govt were to scrutinize the deal.

This might not be of huge importance right now but it could be of extreme importance in the future and I wouldn?t be surprised if Sultan itself requested for the tender process just to protect our interests in the future.

Let?s not forget that although Togo is an African country it?s ruled by a democratically elected president and we all know that governments come and go (hopefully the Gillard govt gets the boot sooner then later).

As for Rio or any other major party that might have been invited by the Togolese Govt to tender, I can not find anything to confirm it.

I think that if someone of the size of Rio were involved I would have found something about them. Until I do so, I will be treating Rio?s involvement as just an unsubstantiated rumour.
At the same time, I?m sure there will be more parties that will be submitting their tenders but I can not find anything at all on who they might be.

We all know that the submission date is the 30th June so let?s just sit back and relax and most importantly stop the speculation.
Like someone said in an earlier post, the HC rumour mill could be partly responsible for where the SP is right now.

Just remember that the BOT or whoever is trying to manipulate this stock preys on the weak and inexperienced hands that get easily swayed by the posts on HC.

As for the time it may take the Togolese Govt to decide which tender to choose?
I doubt if anyone actually knows.
It is entirely in the Togolese govt hands.

Based on my research and Wazbee's chat with the Co, we have an excellent chance of getting this deal over the line but we must remember that it's NOT a done deal until it get's confirmed by the Co.

Hope this helps.