ZNC (ASX) Ann: Propose Issue of Options

Originally posted by La Tache: ↑

No wayJosé
DrElphant, I strongly disagree. I notice your are a RTR shareholder and thus have a conflict of interest. Frankly, what you've suggested looks to me - as a ZNC shareholder and not a Rumble shareholder - to be an opportunistic low-ball 'thought bubble' (I do agree with you about that description at least) made at a time when we all know that these JVs are about to be rerated.

Disagree with your 'rationale' - no corporate socialism thanks
If you're after genuine feedback I hope you won't mind my bluntness in places. I'm not going to debate this with you in this forum but I will say this:
As well as being opposed to what you suggest, I disagree with most of your stated rationale. I'll be interested to see if anyone puts their name (not a HC pseudonym) on anything along these lines in future. If that does ever occur I will vote - and actively lobby - against it. There are some powerful ZNC shareholders that you would have to convince. There would be a snowball's chance in hell of getting the necessary support in my assessment.
If I wanted Rumble shares for Earaheedy exposure I would buy them on market. I haven't bought one but I have bought a 7 figure holding of ZNC because I've always seen them as a better entry for Earaheedy. A compelling case would have to be made; this is nothing like it.
I'm not into corporate socialism. I'll pick my entry into Earaheedy and I won't allow dilution of its potential takeover premium without a hell of a fight.

Unbalanced assessment: Talk about 'benefit' (which is not valid anyway), while failing to talk of loss of position
Remarkably, you even said:
"The benefit to ZNC shareholders is that they would have an unencumbered direct share holding in RTR, thus there would be no confusing of all the other ventures in the ZNC share price, eg FFX is it a lithium company or is it a gold miner?"Really?

Frankly, that's a ridiculous statement - see bullets following. In summary (1) What you suggest is not a benefit anyway. (2) You fail to refer to offsetting loss of opportunity to get possible direct takeover premium (3) There's no confusion so no basis for interfering an expensive corporate transaction that would leak huge $ to advisers instead of spending money in the ground.
ZNC already has an "unencumbered direct share holding in RTR". They could add to it (or sell it down) whenever they want. They don't need to get rid of their main project to exercise that right! They can just go into the market and buy or sell RTR shares if that's what they want.
Wrong business model. Explorers default position should be to hold direct equity, with indirect holdings only as an incidental part of total consideration (e.g. Bradda Head shares), and not the way to hold your main asset! Wow..
You don't sell your main asset - an underpriced, emerging world class one - just before it gets a major rerating, which many of us expect. That would be great for RTR to just issue more paper but terrible for ZNC to lose its direct equity.
Terms would need too be very attractive to swap direct project equity for shares in RTR over which ZNC does not have management control - c.f. a JV vote. Your number was not within a bull's roar of that.
I've posted before that I expect a big minerals company will end up with this asset. e.g Post #:54385060 on ( July 2021. If ZNC traded its equity for RTR its shareholders would not get the takeover premium directly, all of which would flow to RTR which could spend the proceeds as it saw fit. ZNC shareholders who agreed to that lose the direct opportunity to sell their shares to the highest bidder (if more than one, which IMO could easily occur).
A forced switch (by a corporate transaction of the kind your are suggesting) into RTR shares is additionally unattractive as RTR already has about 300M more issued shares than ZNC. This situation would make that large number of shares on issue even higher and ZNC would have no direct control over the asset.
You say "there would be no confusing of all the other ventures in the ZNC share price". Again, really?!! The lithium and related assets are already being emerged from Zenith's current asset portfolio so if the slimmed down remnants would cause you "confusion" perhaps you're in the wrong business. Speaking of which, your ideas sounded to me a bit like they've come from an investment bank or broker etc. Gift of feedback ...

Expand

Thanks La Tache for all your time and thoughts, though you have clearly missed at least one salient point, well a few in fact. I only have one question in relation to your numerous points - why has ZNC already announced their intention to de=merge the company into its constituent parts, surely their logic supports my thoughts, if not why not and again why are other companies de-merging right across the mining sector, if not to create greater value for their shareholders (socialism I think not). You have also missed a very important fact that at some point ZNC will have to provide significant funds to maintain their share of Earaheedy. And you are right I am a happy shareholder of RTR and ZNC and soon to be a happy holder ZNC +1, ZNC+2 and ZNC+3

No.	Vol.	Price($)
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2	103620	0.029
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0.030	129053	1
0.032	30144	1
0.033	30250	1
0.034	5000	1
0.035	44117	1

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44117

(20min delay)
Last 3.0¢		Change -0.001(3.23%)		Mkt cap ! $12.35M

Open	High	Low	Value	Volume
3.1¢	3.1¢	3.0¢	$6.697K	219K

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