This is my take. (Those who were present, please feel free to fill in the gaps where you think I might have misinterpreted.)
2 Bids for EPC (p&r) – “both bids below SDL’s 2011 numbers”. Both China company and Euro comp have experience in Africa. GJ went on to say : “ .. the one from China is building in Africa as we speak” (thus, with little research we might be able to identify the Chinese bidder) GJ: - “No later than end of June” it will be decided “who won the bid”, and “at what price”. Then financing arrangements to be put in place- there will be conditions precedent to be met to finalize financing. This to take “the rest of the year” and “construction to start early next year”. EPC (mine level): “Close tomorrow”. 11mil tones/pa from Cameroon and 24mil tones/pa from Congo.
Except for one poster who mentioned the aspect about Congo permit, I can add (and this was striking because –AND YES MATT I DO PAY PARTICULAR ATTENTION TO WORDS BEING SPOKEN – remember when I mentioned that GC spoke about a single off-take agreement at previous presentation and not agreements – it then turned out that there was only one off-take agreement namely Noble) that GJ on 2 occasions during the pressi stressed the fact that “the Congo convention is expected to complete shortly, VERY SHORTLY.” A bit later GJ repeated the same words – the Congo convention to be completed VERY SHORTLY. I expect this to be the next announcement by SDL in the next couple of days or weeks. GJ then followed up that finance package can then be finished off. GJ also mentioned that it will cost $45 p/t to land IO in China. I took that to be the total cost for mine, rail and ship.
GJ concluded, mentioning his prior experience in banking sector and then stated that “ the real challenge is – How much will SDL be able to keep?”
During lunch, a small group gathered in discussion with GC. A statement was made that GJ, on an earlier question what he (GJ) think can be reasonably be expected to be retained by SDL after all negotiations concluded for funding and asset sale, GJ advised between 60% and 70 % . When this was put to GC, he merely advised that under the off-take they could claw back 50% but did not get into a detailed response to that specific comment.
GC also mention, on a question whether he can state if all contracts will be “signed, sealed, and delivered before end of year” GC said NO, he expect to see finalization by mid next year.
The prospect of X2 coming into play was raised but from GC response, it seemed quite clear that X2 is no way in the picture.
The EPC and BOOT option was raised but I could not make a clear inference whether their minds were set on any specific approach. GC mentioned that the bids are competing and only once all the cards are on table and negotiated to a level where both parties “are ready to sign the contracts”, only at that stage will the current competitive bidding be brought to a halt and the final winner be chosen.
Both GJ (in pressi)and later GC (during lunch)mentioned the aspect that the Gabon government, for the first time included in their options to rail IO to port, the prospect that IO from Gabon might be railed along the SDL rail line. GC particularly seemed quite excited about the fact that Gabon raised this prospect for a first time.
That’s about as much as I can gather for now.
Cheers
SDL Price at posting:
9.0¢ Sentiment: Hold Disclosure: Held
