IMHO, the issues mentioned here, even though article is 2017, highlight just why PIOP is so valuable to BBIG !
The PIOP resource is not just dirt in the ground.
PIOP represents very,very significant value to BBIG, because of the value-add provided to PIOP by BBIG.
The article and Jon Young confirms that above.
All these approvals, agreements, MOUs, Govt approvals etc - they all relate to PIOP - NOT any other mine or ore resource in the Pilbara.
If BBIG do not secure the ore supply from PIOP, they cannot simply move the agreements and approvals to another mine.
They have to start the process all over again.
So another 4-5 yrs wasted - and hundreds millions dollars wasted.
The article above says "critics" said BBIG had no finance, low ore price, and no offtakes.
Well we know that BBIG has the equity funding, the debt funding, the Offtakes, the State Rail agreement, approvals for the port, it has the Indigenous agreements, the environmental approvals, it has the construction agreements for port, rail and mine.
It has a BBIG BFS for Port and Rail.
(Presumably the BBIG BFS must incorporate provision for a supply BFS? How could they get to a port/rail BFS without a source of supply)
BBIG does not yet have a source of supply agreed to by FMS.
BBIG does not yet own the tenements.
So when minority shareholders consider any deal put to shareholders, we need to keep in mind these comments from CEO of Todd Corp (when ore prices were even lower than today):
Any deal proposed to minority shareholders MUST ascribe a meaningful value to the strategic value of PIOP to the BBIG project.
It is this value that minority shareholders and FMS is transferring to BBIG.
It is that value that BBIG is gaining from the deal.
That is the FINANCIAL BENEFIT which Todd and BBIG are receiving in any deal proposal.
That value is NOT being provided to minority shareholders.
The issues for FMS and minorities, is that any benefit or value attributed to minorities must include:
- Certainty of value ----- ie predetermined amount of return
- Certainty of timing ---- ie predetermined timing of return
- Recognised and established value of "strategic value" PIOP provides to BBIG
- Recognition of the "speed to construction/development" that PIOP provides to BBIG. PIOP is turn-key.
- Recognition of Financial Benefit flowing to Todd/BBIG, and compensatory value ascribed to minorities.
- Ability of FMS and minorities to participate in future earnings of BBIG
- Recognition that FMS is giving-up its 100% control of valuable PIOP, for a minority holding in PIOP Mineco.
- Recognition that any proposal must include provisions/terms which allow for fact that minority shareholders have lost all trust and confidence in the previous board and mgt. That's why any proposals must have certainty of outcome and benefits.
