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this shows that there´s a lot of project funding activity going on behind the curtain ... BCN will have to wait for all final approvals from China before they can publish their finance package which IMO is already decided ...
Putting it this way does make BCN look an impressive investment so why doesnt the market wake up to this ?
My theory is the the waters are a little muddy still from the will we or wont we have oversupply of Lithium with all of the conflicting blurb doing the rounds on the internet from various analysts AKA guessers !
I am wondering if they don´t try to get a new agreement with State General Reserve Fund of Oman ("SGRF") - this 65M us$ would be very helpful to fill the gap ... and with new cornerstone investor Ganfeng it would be a containable risk for them ...
Finance position. Sonara using tier one providers from Europe and America is $420m.
The company have secured the following:-
1. RK mining $150m but have drawn in July 18 $25m.
2. Hanwa $25m
3. Ganfeng 22.25% is $94.5m
4. Ganfeng share 29.99% and sonara 22.25 % purchase is approx $20.
5. Assuming still can get SGRF investment $65m.
So have 125-94.5-25-20-65=$329.5m.
Hence shortfall of approx $90m.
In terms of reducing this would suggest the following:-
1. Suppliers from China rather than Europe and America will in my opinion yield a 10-20% saving. Hence reduce shortfall by between 42-9.4= $32.6 and $65.2
2. Float Germany lithium mine
3. Ganfeng take up 50% of mine and then no shortfall.
4. A rights issue when the price is more favourable.
But consider one alone and shortfall between $57.4 and $24.8.
A fair amount of assumptions in the above so feel free to critic
Securities pledge from Sonora Lithium to RK. Registered with Companies House.
"If everything goes according to schedule, we'll have our financing plan sorted out by the second quarter of 2020," Müller said.
"After that we'll need another 18-20 months to prepare the mine and processing factories. In other words, I hope mining can kick off in the first or second quarter of 2022."
Zinnwald is often forgot about but it shouldn't be. Can only hope route to finance is a bit smoother than Sonora.
Interesting Tomcat, well found. Also of the opinion it is only some red tape holding things up. Their government departments are probably quite busy just now given the political situation.
My only thoughts are this was trading well into the 50's after announcement of deal. Now in the low/mid 30's, on deal conclusion surely we will see a 75-100% type rise. An almost fully funded lithium mine with a partner like Ganfeng can not be trading below £100m. It has to be more like £200m, rising through construction.
at the 35th meeting of the fourth session of the board of directors held on 28 june 2019... the company considered and approved the transaction with 10 votes for... 0 against and 0 abstention... and authorised the management of the company to deal with related matters of the transaction at its sole discretion...
according to the requirements under the guidelines on standard operations of companies listed on the small and medium enterprise board of the shenzhen stock exchange... and the articles of association, the transaction does not constitute a related-party transaction... nor a material asset reorganization as stipulated in the administrative measures for the material asset reorganizations of listed companies... and therefore... it is not subject to consideration at the general meeting of the company...
that answer is also on a postcard below zarro... you can see how ganfeng m&a tends to work in the way they have funded olaroz... nothing cast in stone... but i’m expecting it to follow a similar route here...
the only reason i see ganfeng allowing dilution of their 29.99% bcn holdings is to allow another partner in at plc level... could be that they were the blocker...
Zarro, I'm really not sure you, or anyone else, is in a position to say it's a red herring. The fact is, we don't know and therefore a statement to shareholders would be very helpful.
As far as your other comment is concerned, I agree entirely. And this is exactly what's holding the share price back.
But do you not agree, Tom, that the company really should inform shareholders of the current status? I know communication, is not one of his strengths, but an update wouldn't do any harm, would it?
Groan - I agree Tomcat. The rights issue outcome is a red herring in terms of the BCN / Sonora equity investment transaction as announced, even if they went on the press the button for 50% at project level. Its peanuts for Ganfeng. The bit that is not clear is the terms for the broader funding gap - who / how / how much etc. and to what extent that is part of the cornerstone agreement. That is what will dictate the share value potential for existing investors - but even then that outcome is only the question between £1 or £1.50 or £2 or £2.50 and so on.
In terms of the remaining sign offs, lets also not forget the vested attraction of the mine infrastructure supply to Chinese manufacturers. The approvals will come. The investment will be made. Quite how the project is funded remains the mystery for me.
answers on a postcard...
see the links posted below... worth reading the egm details and analysing the voting profiles...
the blocker seems to have been a single shareholder with a 0.45% holding of the h shares...
ganfeng’s finances look solid... for a company investing in global expansion and in fast track ramp up mode... buying up the most desirable lithium assets on the planet...
it wasn’t you was it addicknt...
There's a very interesting article on the BBC web site business section about lithium mining in Chile; specifically the operations in the Atacama desert. If I were a shareholder in Albemarle I'd be very concerned. By contrast and by implication, this is could be good news for BCN.
By the way, as far as the Ganfeng situation is concerned, I'd have thought the following three situations apply to their recent fund raising issues:
1. They already have sufficient cash and the investment in BCN will be unaffected.
2. They don't have the cash at the moment, but are happy that they will still be able to complete.
3. They don't have the cash and will need to withdraw.
Either way, it seems to me that the answer to these questions is already known and should be communicated to shareholders.
paying $160m for the remaining 12.5% option on olaroz...
pro-rata that on a simple % basis...
$352m for the remaining 27.5% option on sonora lithium ltd...
any arguments for a premium... or discount if you like mrc... based on other comparisons between the two resources...
Thanks Tomcat - also to allay any concerns re a possible impact from the recent right issue vote the HK exchange filing by Ganfeng in relation to the BCN deal states as follows:
(II) Impact on the Company of the [BCN] Transaction
In spite of certain net outflow of cash flow of the Company, the transaction will not have any noticeable influence on the working capital of the Company and has little impact on financial conditions and operating results of the Company for the year 2019.
It references subject to prc which as per last rns they have ?
Can’t imagine the other 2 being a problem
Thanks for sharing tomcat
looks like pocket money to them
details of such... for reference... https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0628/ltn201906281856.pdf ...
22.5% sonora lithium ltd and 29.99% bacanora lithium plc next on the todo list... ;)
they’ve just completed on the olaroz acquisition... now 50% ownership of the project with jv partners lac... https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0818/ltn20190818013.pdf ...
agree with that tomcat-14,
and yes, your post on the Ganfeng H shares shows it was very tight:
As not more than two-third (2/3) of the votes held by the Shareholders and proxies who attended the
EGM were cast in favour of the resolution, the resolution was not passed as a special resolution.
Not as bad as I thought, worth reading the pv magazine article again and with the voting so close it paints a very different pictue:
You could very easily believe that 65% of holders voted against whereas it now looks like those holding 65% of Ganfeng voted on the issue of H shares of those voting 65.1593% were in favour just short of the 66%+ required and in fact just 34.8407% voted against.
Of course, the outcome is still a no vote but not a 'Rebellion' by any means.
Well if this was a Brexit vote we wouldn't be in such a mess now!
me2 jimb... and we know from bcn that the offtakers are impressed by the colour of sonora lithium... quality product... meeting tomorrow’s specifications...
rock, brine or clay?
Spodumene is looking very risky, I feel better about clay and producing battery-grade at the source .