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Ann: Nyanzaga Project Update - Completion of Earn-in Phase, page-22

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Davisite

18,999 Posts.

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21/07/18

09:18

Post #: 34491285
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Originally posted by eshmun ↑

Correction to my previous post.

I said

“The original agreement had ORR moving to a 25% interest on completion of the DFS and 51% dependant on whether the NPV of the DFS was above or below US$200 million. The previous option allowed ORR to move to 51% based on a sub-$US 200 million NPV for the project and staged payments totalling US$15 million which included a NSR capped at US$10 million.

I can’t see how they can say that ORR have satisfied the terms of the previous agrement to move to 51% when the DFS has not been completed (I don’t recall seeing the DFS?). In any regard they can get to a 100% cheaper by this agreement than the old agreement (ie they’ve shaved $US5 million off the upfront price but added $US5 million on top of the capped royalty).”

The previous deal would have cost US$15 million to get to 51%. So this announcement seems to imply they have shave $US12 million off this part of the agreement.

The US$7 million for the remaining 49% is new and seems to value the whole project at only ~US$29 million with the NSR.

Acacia have really rushed out the door. Very interesting to see where this goes from here. Esh

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Yes Acacia has seen the writing on the wall and is leaving Tanzania. I don't think you can read into the price Acacia is accepting what the value of the project is - they are a distressed seller dumping and running. The value of the project will be what ORR can get a new partner approved of by the Tanzanian government to pay or what they can sell the entire project.

The really interesting question is how far along the negotiations with the government and/or a new partner are. Things might be about to move quickly. The one thing we can be sure of us retailers will be the last to know - the tree shake 10 days ago was not a co-incidence.

ORR Price at posting: 26.5¢ Sentiment: Buy Disclosure: Held
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