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I think it's a combination of waiting for the final plans & costings to be confirmed , the amount of funding required and the overall cost of that funding. Until then the price remains anchored to the Ganfeng and M&G price of 25p p/s plus the 11p p/s attributable to the new Zinnwald deal.
"1. So BCN no own 50% of Zinwald come what may. No longer can it be bought out for $1." -- My point exactly 50% ownership secured without taking financial precedence away from Sonora project -- Good News IMO.
But why are we still getting this itsy bitsy wierd trading pattern ??
Bacanora had an option to acquire the outstanding 50% that it does not own, whilst Solarworld had the right, but not obligation, to buy back Bacanora's shareholding for €1 (together the "Call Options"). The Company and Solarworld have agreed to cancel the Call Options. As a result Bacanora will now own 50% of DL, and Solarworld, which is currently in administration, will hold the other 50%.
1. So BCN no own 50% of Zinwald come what may. No longer can it be bought out for $1.
Bacanora has committed to provide a minimum of €1.35 million in funding to DL over the next two years to progress the development of Zinnwald.
2. BCN now puts in €1.35 million over next two years. Two Years of delay for Zinwald. Hopefully now BCN fully concentrate on Sonora and come back to Zinwald once Sonora is up and running. Maybe when it is it will have assets upon which to obtain financing for Zinwald.
Sounds like a win result to me. Retain asset. Little cost in the meantime.
Its possible Zinwald NPV will be realised in BCN price once Sonora construction starts and sentiment turns more positive.
Like no one was pricing in FSD, Battery Storage, Solarworld etc for Tesla. No it looks like they are.
I think more likely BCN need a partner... I think today's RNS was just the prelude
Maybe they can get the other 50% cheaper
Just a thought
I think it is good news too having to put a lot of cash in to Zin at this time would be disruptive to current activities and its good that the option is sort of differed now..
Failed to do so or the market failed to be there?
Larger producers are scaling back production right now due to pricing pressures.
Lithium prices at this point in time, are not supportive of widespread investment in new mines. Sorona is well advanced, well financed and is well inside the 1st quartile on the cost curve. That's attractive and will pay well when demand picks up but investment lags.
The Deutsche Lithium project looks like a solid future project but in this pricing environment, it is simply not worthy of pouring substantial time and resource into, be it from BCN or those 3rd party investors, who may or may not exist right now.
The points about distraction and amounts to be tied up are fair enough but the Company have had ages to get a good deal done with a third party investor / IPO....and to my mind failed to do so.
Being simple, (on the basis of VSA's numbers) if 50% of Zinwald is worth £100m (£50m at 0.5x risk factor) is it not worth £20m of our money to buy the other 50% and flip it to the alleged investor? That upside alone equates to our current market cap. Clearly there is something we do not know.....
Journey surely starting now and towards the end of March, for the re-rate to 50p and beyond?
My simple view on this development and the plan as a whole, is that right now the German Lithium project is a distraction and a further $30m investment would be far too dilutive, for what would be gained.
The key to success here, front end, is Sonora and all resources and capital should be focused on getting its finance over the line and production started.
Once that has been achieved, then the German project can be revisited with funding that is far less punitive. There is plenty of money to be made here from simply driving Sorona through its 2 stages of development.
So I am delighted to see this investment parked, for now.
Suppose the first step for the administrators in getting a partner on board, would be to tidy up the arrangement with BCN re Zinn. Watching now over the coming weeks for who the partner may be and how this will positively drive the sp.
Also in the camp this is great news. The market is attributing no value to Zin (it can scarcely put value on Sonora), and if anything, the prospect of more funding requirements would weight further on the share price.
Noteworthy that Ganfeng has done 300% in terms of share price since just Sept 19. The sector is hot as the newsflow regarding transition to EV, lithium demands etc are relentless. Feel that BCN could be the recipient of an influx of buying and surge in its share price, to come into line with the rest of the sector, at any time.
VSA issues note on today's news.
"Our current valuation of Zinnwald attributable to BCN is £49m using a risk factor of 0.5x. This implies 11p/sh. and clearly little is being reflected in the current share price, however, today’s announcement which simplifies the agreement and confirms funding to advance the project indicates that it should be more fairly reflected in BCN’s market valuation. "
IMO this is very good news !!
-> save cash !!!!
-> keep their 50% !!! you should keep in mind that solarworld is under administrattion so they will try to find another potential investor ... which opens the door for Ganfeng investment !!
-> focus on their "main" project SONORA !!
Though the end of March was likely the update on Gangfeng proposals, it would be good to get early news on the way forward including cost-savings
And mine
Glad they aren’t forking out 30m at this stage
Focus on the main prize at this stage
IMHO
So we have enough on our plates with Sonora, but happy to jv with a European leader...…..they need a non-Chinese controlled source of Li
bcn is gambling with the hope, german government will jump in, as the local car industry is in deep problems
Si90, my thoughts also. ATB
Somebody else wants the other 50%, who we are happy to work with?
And strange that the administrators, who I imagine are charged with realising any assets for the benefit of creditors, sit and wait for a further prolonged period?
WTF? Why on earth have they given up the option to buy the other 50%?