Perhaps Westoz have realised most ZEN clients are gold miners / producers. And the price of gold jumping 12% in AUD between 12 months and 6 months ago caused a big spike in ZEN EBITDA.
Then when Westoz see the most current 6 months having another 15% POG rise (ON TOP OF THE PRIOR 12%)... they consider the current environment for Zenith Clients and BOO opportunities very good. Just a thought.
And wondering if we can quantify just the gold opportunity for EXISTING clients: 450 MW x 24% = 108 MW That, to me, would be the BOTTOM near / mid term signings. Current 232 + 108 = 340 MW near / mid term. Where is that on the Grant Thornton 'paid for 'let us get to $1' analysis'
Maybe Nova or Barrow is in that 108MW opportunity (not gold). But note those two have JUST BEEN UPGRADED. So I think I am correct that 108 MW is on the table - close to signing, assuming POG remains strong.
So a great investment plan would be invest in Zenith to broadly ride the POG, then hedge elsewhere in case POG falls a lot. And even if POG falls, say 10% - 15% Zenith is very moated and shielded with current contracts and historical runs on the board - re how much EBITDA they earn with POG even 15% below where it is today.
Maybe Westoz is thinking like me. They are happy to buy at 99 cents - which is 25% to 30% under fair value (according to Westoz research). Remember Mrs Hoff thinks $1.01 is 20% under fair value (and I have not even shown her gold prices in the last few months). And remember Grant Thornton have the value way over $1.01 - if they chose mid term MW over 300 and use a more reasonable cost of debt at current interest rates.
I wonder who has been privy to the 450 MW at bid / negotiation info. Would that be BUYER PEP? Would that be BUYER APEX? Would that be 100% roll to scrip management/directors. Would that info have been hidden from Grant Thornton? Would that info be hidden from Westoz?
Hmmmmm, makes you wonder, doesnt it?
ZEN Price at posting:
99.0¢ Sentiment: Hold Disclosure: Held
