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@Maddog - :') (wish I can use emojis to express myself). It was purely coincidental, the use of the word.
cause17/ good answer l note you used the word Observers "lol G/l
@Maddog- I did start reading on KDNC around 4 weeks ago. Like I said the first week or two, I was more of an observer. I have been reading as much as I can (bit too much time on hand due to personal circumstances and I am trying to distract myself from those circumstances to the best of my abilities)
Please rest assured that I am genuinely asking these questions (and they are of my own that come up whenever I read articles here or the results of my web searches) inorder to better understand what I have in my hands.
I do read other LSE boards but I just found people on here deal with more discussions and don't seem to shoot people down for asking question - I see in some boards there is a lot of arguments rather than discussions(twitter that I have come across seems to distort/hype the information).
One of the reasons why I want and wanted to know your reasoning is so that I can evaluate that for myself.
One of the reasons why my questions seems to reflect many of the ones that were already on the bb could be because I am new and I am asking the questions that had already been asked (I didn't read the prior history on this board)
cause 17/ for a pi that new knout about kdnc two weeks ago you seem to have gathered info much quicker than pi s that have been invested here for years " l wonder how and with such speed ? is it that you are one of two " your stance seem to good to be true plus your question & answers are familiar to other associated with this b/b?
@Dallas's translation has this wrong: "(b) the other fifty percent (505) of the capital remaining will be paid through a payment in the tenth of this year." should read "(b) the other fifty percent (50%) of the capital remaining will be paid through a payment in the sixteenth year." which slightly confused me, but I think my understanding still rides, as the R$185 gradually goes to zero, whereas the R$818m gradually reduces by something like (very roughly) ~R$25m for several years then has a final bound from something like R$184.5m to zero, presumably corresponding to this final 50%?
It would really help if you could see the tables. Because of: "4.5.1. (a) fifty percent (508) of the remaining capital will be paid in eight (8) annual installments from eighth year; and (b) the other fifty percent (505) of the capital remaining will be paid through a payment in the tenth of this year." I can see that the R$818m likely conforms to this, and is therefore this unsecured credit mentioned. Whereas the R$185m doesn't conform to this.
i’m taking that r$185m to be the already unsecured creditors... 4.4 and 4.5 in the jrp... who have a pre-prescribed discount and payment schedule as stated...
One thing just crossed my mind. Perhaps the debt in the JRP is mostly denominated in USD, which means on the day of the announcement when expressed in terms of BRL it will be larger than that contained in the JRP, by 4.14/3.6. i.e. My R$1.35B from @22:42 would become closer to R$1.5B (R$1.55B). You have arrived at your destination. LoL.
If you like @tomcat. Perhaps I'm taking too colloquially. I pity anyone trying to follow this! LoL. The point is, there appears to be R$1.17B of debt which if the JRP goes ahead in its current form will reduce to around R$818m and be paid out under a predefined schedule - the JRP refers to this as unsecured credit (Unfortunately I use debt/credit interchangeably as I switch my perspective). There is other debt what looks like R$185m which we don't know whether it has had a hair cut, and this is paid out under what looks like a more favourable repayment schedule: sooner, but longer.
Perhaps I'll pay the £2k for the report? LoL.
"Amapa iron ore mine" (17 June 2020)
https://www.woodmac.com/reports/metals-amapa-iron-ore-mine-17230546
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$2,250
Tables and charts
This report includes 12 images and tables including:
Detailed map
Participation
Marketable reserves (at 01/01/2020)
View all tables and charts in this report
Production
Production
Operations
Infrastructure
Cash costs
Cash costs
Capital costs
Product quality
Economic assumptions
What's included
This report contains:
Amapa iron ore mine PDF 833.17 KB
Amapa iron ore mine ZIP 856.83 KB
Amapa.xls XLS 183.00 KB
]===
intesa r$559m + indo r$207 + banco r$207m... r$974m... cut to r$818m... they become unsecured... once a settlement is reached...
I agree with this though! And a good observation :-) "what is good news to know though... is that it looks like the project is going forward with the same level of debt it had previously... not compounding new debt onto existing..."
No, the R$818m is the unsecured debt.
except the secured debt is r$818m... what is good news to know though... is that it looks like the project is going forward with the same level of debt it had previously... not compounding new debt onto existing...
If the unsecured debt is R$818m and this took a 30% haircut it would have originally been R$1.17B and if the R$185m is the secured debt which hasn't had a hair cut, it would mean the total was $1.35B. Are we there yet? LoL.
putting those two articles together then... the existing creditors look to have had to take a haircut... to cover the cost of the new creditors... but if you’re reading the schedule right... it’s not r$900m but around r$1,003m for a 30% cut...
@tomcat. I've just realised that because the $49m will be taking a 30% haircut it can't be equivalent to the R$185, and therefore the R$185 is likely to be the secured debt supplied by "the banks" - "4.5.2. Indo Sino. Once checks previous condition of the Dip Financing B, Indo Sino will waive its guarantee and the your credit will be classified as cash register, being paid under the same conditions as the other unsecured creditors."
@Cause, if you really want to start considering the debt part of the equation then you are best starting off with:
"Approval of Judicial Restructuring Plan Paves the way for the Restart of the Amapá Iron Ore Project." (30 August 2019)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=2887382
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The JRP schedule contemplates the majority of the historic liabilities will be paid from free cash flow in years 5 to year 17 of operations, which represents a discounted NPV10 debt value of approximately US$106 million.
]===
There is more debt than that, but that's the majority. Double it if you want to be ultra conservative. Then there is new debt of at least $85m that will be coming onto the books for the CapEx and other bits and bobs - some from the JV, but we benefit from that, with decent interest. :-)
That's another one of those coincidences we keep seeing @tomcat! LoL.
Thanks Obs. It is the very first time I am trying to calculate NPV. I will share my workings and results here with you tomorrow.
I used the net revenue numbers on the 2nd table in the JRP document.
The formulae was sum of (net revenue for the year/ by (1.1)^(year - 2020 +1)) - (110 million*5.4) - 1.5 billion
From reading the current conversations I can see that I need to use 900 million instead (if I should be using that number at all).
The reason for using 1.5 billion was that as Dev is absorbing the debt, I considered it in the price of buying out the mine.
But I guess using Ebita would make all this much simpler for me.
I will use Ebita in my next calculation.
Also I used the current exchange rate..
I think the exchange rate works on Cadence's favour too since $ is much stronger against the Brazilian real. I saw that both articles on the debt restructuring had a figure of 1.5 billion Brazilian real but the initial article had 360+ million dollars and the latest one (2020 June) had only 260+ million dollars.
You are confounding me @tomcat. LoL. I'm not sure how you concluded that from what I've said or you've read today. It clearly states: "the company's original debt was R$1.5 billion, but creditors reached an agreement to cut approximately 30% of that amount to R$900 million." and from the JRP: "4.5.1. Seventy percent (70%) of the credits of each creditor unsecured will be paid in full according to the following condition"
at 4.14 forex... dip a+b $30m (r$124m)... dip c $85m (r$352m)... plus the r$818m secured creditors... and r$185m unsecured creditors... you noted from 2 rows earlier... total r$1,479m... rounded to r$1,500m...
i’m reading it that the r$1,500m ($362m) in that article is the jrp total debt value agreed with all creditors... new and old... future and past... includes dipa b and c... so is the value of all of the 4 rows you noted earlier...
@Cause If it's your first time doing this I do suggest you start simple, get someone to look through what you've done - why not start by seeing if you can confirm my assertion that:
"I make it that prices of around $100/t add around $1B of pre-tax NPV10 to the project over the $61/t baseline. Incredible really. @Cause are you able to confirm yet? LoL. :-)"
That should be trivial to confirm if you have got to grips with the present value of money and other aspects of the project. If you get stuck I can talk you through it.
Good luck!
Ob.
Maybe the R$900 million, is wrong, and in fact it's more like a hair cut to circa R$1B (closer to 30% of $1.5B), which then corresponds to the figures I'm seeing in the JRP?
Thanks for the link reminder @tomcat:
"Brazilian miner agrees 1.5 billion reais restructuring with creditors" (17 September 2019)
http://www.nasser.adv.br/uploads/nasser-brazilian-miner-agrees-1-5-billion-reais-restructuring-with-creditors-ll-latin-lawyer-2.pdf
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Donelli, Abreu Sodré e Martins Advogados has helped Brazilian mining company Zamin Amapá Mineração agree a restructuring plan with creditors worth 1.5 billion reais (US$362 million).
]===
I'm reasonably certain that the $1.5B (which was rounded) has taken a hair cut to something like $900m:
"Zamin Mineração to resume mine operation in 2021" (Sep 03 2019)
http://www.valor.com.br/international/news/6418273/zamin-mineracao-resume-mine-operation-2021
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Zamin Mineração, which operates a mine in Pedra Branca do Amapari, in Amapá state, is expected to be back to business in the first half of 2021. The company, which halted iron ore production in 2014 following an accident at the Santana port terminal, had a judicial recovery plan approved in the last week of August. The creditors’ green light came after British company Cadence Minerals was presented as an investor of the project, which includes, besides the mine, a railway and the port. Cadence put up $2.5 million to pay labor debts and creditors with liabilities of up to R$150,000. Eduardo de Abreu Sodré, a partner at law firm Donelli, Abreu Sodré e Martins Advogados, which helped draft Zamin's recovery plan, explains that the company's original debt was R$1.5 billion, but creditors reached an agreement to cut approximately 30% of that amount to R$900 million.
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The $362m is simply calculated from the R$1.5B using the exchange rate around the end of August (4.14)