Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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@tomcat. re dabs. I see what you are getting at. And it is complicated for sure! This reminder might be of interest to those who don't know what we are referring to:
"Bacanora Minerals Ltd 2014 AIM admission document."
https://www.bacanoralithium.com/pdfs/Companys-AIM-admission-document.pdf
===[
The agreement also provides the governing parameters of Mexilit, which include the
following provisions:
ā¢ Mexilit is to initially have three directors, all of whom shall be nominees of the
Company. On completion of the REM Agreement 1 Stage 3 Option, REM Mexico will
be entitled to nominate an additional director to the board of Mexilit;
ā¢ the board of Mexilit is responsible for the day to day management of Mexilit and the
REM JV1 Concessions including management of the exploration and development of
the REM JV1 Concessions;
ā¢ shareholder approval (from the holders of 2/3 of the issued shares) is required in certain
circumstances including on the issue or grant of rights in shares, borrowing, granting
security, sale or disposal of any of the REM JV1 Concessions;
ā¢ if Mexilit issues a cash call notice to its shareholders, each shareholder shall be obliged
to contribute its proportionate amount, failing which its interest may be diluted;
ā¢ shares cannot be transferred or charged except with the approval of the board;
ā¢ each party has a right of first refusal in respect of the othersā Mexilit shares; and
ā¢ drag-along and tag-along rights apply between the parties in respect of any proposed
sale of interests to a third party.
REM Agreement 1 is governed by the laws of the Province of Alberta.
]===
Presumably the agreement is still valid? Perhaps the two thirds voting clause might explain why we had to sell down our BCN shares to enable Ganfeng on board without the risk of us frustrating progress? I suspect technically the same BCN controlled company holds their 70% so first refusals and drag-along and tag-along rights didn't apply. But perhaps they did apply and we decided not to have the relative portion of our 30% dragged along for the peanuts that were on the table?
Anybodies guess really.
In term of my previous calculation - I take your point about the prices, but I'll stick to using the reserves in the updated version below:
We know they got 29.99% of BCN for Ā£14,400,091 and 22.5% of SLL for Ā£7,563,649.
22.5% of 3,676kt = 827.1kt
Therefore the valuation based on this is Ā£7,563,649 * (839 / 827.1) = Ā£7.7m which is now in the same ball park as your calculation. :-)
Ob.
with our mcap currently sitting at Ā£9m... iām happy to allocate a minimum Ā£7m to our market valuation for our sonora jv today... iād never sell it for that though... iām actually surprised we didnāt buy more at Ā£8.29/t lce... i thought we had 1st dabs on mexilit... or was it last dabs...
Hope you are right , G L
Hmmmm .... does it not make a difference that you're basing your calcs on what GFL have bought in for, which from BCN's perspective is a cheap entry for GFL but they bring potentially a lot to the table.... my calc was based on NPV as published currently (with the small part of JV1 in it) .....providing our Minigases don't sink us first we can just wait..... not sure about anyone else but I still think $150-200M to buy us out of the JV's completely makes sense for all concerned .....
also... i didnāt include the full Ā£21,963,740 transaction for bcn and sonora... as bcn includes zinnwald lithium too... ;)
i took the contained lithium drilled out to date from table 14.15.2 of bcnās feasibility study...
la ventana... 1,981kt lce...
el sauz... 1,090kt lce...
fleur... 1,871kt lce...
total... 4,942kt lce...
t
For the reserves calculation I found it curious that 839kt / 1,681.8kt is almost exactly half (0.4989). i.e. that 22.5% gives Ganfeng claim over nearly exactly twice as much lithium reserves as we do. For the reserves they currently have claim over 1,681.8 / 4,515 = 37%. We have claim over 839 / 4,515 = 18%. If they bought us out they would have claim over 55% of the reserves. Food for though.
The way I see it based on @tomcat's measure of value:
"Completion of Strategic Investment by Ganfeng" (14 October 2019)
https://www.lse.co.uk/rns/BCN/completion-of-strategic-investment-by-ganfeng-beh16g5s9j9y3fv.html
===[
Completion of the last of the relevant approvals has now been obtained and Bacanora has now received the Ā£21,963,740 of funds from Ganfeng in exchange for a 29.99% equity interest in Bacanora Lithium PLC and a 22.5% JV investment directly in the Sonora Lithium Project ('Sonora')
]===
"SONORA LITHIUM"
https://www.bacanoralithium.com/projects/sonora-lithium/
===[
Sonora Lithium ltd (āSLLā) is the operational holding company for the Sonora Lithium Project and owns 100% of the La Ventana concession. The La Ventana concession accounts for 88% of the mined ore feed in the Sonora Feasibility Study which covers the initial 19 years of the project mine life. SLL is owned 77.5% by Bacanora and 22.5% by Ganfeng Lithium Ltd. SLL also owns 70% of the El Sauz and Fleur concessions, which are held by Mexilit S.A. de C.V. ('Mexilitā).
...
Table 4: Mineral Reserves: (Cut-off grade of 1,500 ppm Li)
Total LCE 4,515
Total LCE attributable to Bacanora 3,676
[Total LCE attributable to KDNC 4,515 - 3,676 = 839]
]===
How much Lithium reserves did the Ā£21,963,740 buy?
It bought 22.5% of 3,676kt = 827.1kt
leaving 3,676 - 827.1 = 2,848.9kt
and it bought 30% of 2,848.9kt = 854.7kt
Adding the two together: 827.1kt + 854.7kt = 1,681.8kt
Therefore by this measure our 839kt of reserves are worth:
Ā£21,963,740 * (839kt / 1,681.8kt) = Ā£10.96m
Same calculation based on measured and indicated resources:
===[
Table 2: Measured and Indicated Mineral Resources
Total LCE 5,038
Total LCE attributable to Bacanora 4,119
[Total LCE attributable to KDNC 5,038 - 4,119 = 919]
]===
How much Lithium measured and indicated resources did the Ā£21,963,740 buy?
It bought 22.5% of 4,119kt = 926.8kt
leaving 4,119 - 926.8 = 3,192.2kt
and it bought 30% of 3,192.2kt = 957.7kt
Adding the two together: 926.8kt + 957.7kt = 1,884.5kt
Therefore by this measure our 919kt is worth:
Ā£21,963,740 * (919kt / 1,884.5kt) = Ā£10.71m
Corrections appreciated!
So @Tomcat.. are you saying our share COULD be 7,366.000.000 / 105.000.000 ??
Tomcat. You are right ; I was being optimistic thinking KDNC might have a nuisance value but that is probably unlikely.
based on the price bcn have just sold 22.5% of their drilled out lithium in la ventana : el sauz : fleur... 912kt lce for Ā£7,563m is Ā£8.29/t lce...
kdnc own 888kt lce of the drilled out lithium in those concessions... so at that rate itās worth Ā£7,366m...
Bannor. I agree with your valuation of $45m for KDNC's share of JV but according to Annual Report " Under our estimation, The FS mine plan currently has some 12% of the plant feed being mined from the 30% joint venture areas owned by Mexalit." It says currently, nothing about in years to come. I'd like to agree that $150m to $200m for our JV is fair and reasonable but that does seem overly optimistic; I think $15m to $20m more realistic. Still more than market cap of KDNC.
...... so by my calls based on an NPV of $1.25B ..... IF (& it isn't we all know) the feedstock was being taken equally from all of the concessions included in the current mine plan from day one 30% of the 12% from Sauz El Fleur as a value of the NPV would be $45M (30% of the 12%).
Now we know feed from the JV area is not planned for years so nothing for KDNC for years yet either .... but throw Ganfeng in the pot, their Lithium plans the fact that our 30% of the 12% represents a fraction of the JV drilled out resource I don't know about anyone else but I reckon $150M to $200M for our JV's is fair & reasonable with the bonus of getting rid of me :-))
From 2018 Annual report of KDNC
Under our estimation, The FS mine plan currently has some 12% of the plant feed being mined
from the 30% joint venture areas owned by Mexalit,
I
cheers jimb... that clarifies the contradiction in the last bcn rns...
sonora lithium ltd (sll)... is the operational holding company for the sonora lithium project and owns 100% of the la ventana concession... the la ventana concession accounts for 88% of the mined ore feed in the sonora feasibility study which covers the initial 19 years of the project mine life... Ā sll is owned 77.5% by bacanora and 22.5% by ganfeng lithium ltd... sll also owns 70% of the el sauz and fleur concessions... which are held by mexilit s.a. de c.v. (mexilit)...
Sonora update.
https://www.bacanoralithium.com/projects/sonora-lithium/
Oh dear...I'll stick to digging out and providing the links and TC/Ob/Ban/Degs can then assess and explain to us in future:)
frankie... bcn havenāt paid anything to rk for this transaction... the filing confirms the number of shares that bcn have sold to ganfeng... for 22.5% of sonora lithium ltd... the holding company of bacanora chemco s.a. de c.v... as part of their project level investment in the sonora lithium project... none of the rnsās have ever stated the number of shares in sll that gfl would be getting... so if you did work it out previously... you can now check your math... ;)
these shares now belong to gfl... so rk no longer have any legal rights to them... should bcn default on their loan agreement... which is the purpose of the charge currently filed against bcnās various assets and subsidiaries... as collateral on the rk $150m loan...
This is the charge
https://beta.companieshouse.gov.uk/company/11189628/filing-history/MzIwOTAzMTgxN2FkaXF6a2N4/document?format=pdf&download=0
Under Bacanora Lithium limited is registered today the same and this
https://beta.companieshouse.gov.uk/company/11189628/filing-history/MzI0NzE0MjAxNmFkaXF6a2N4/document?format=pdf&download=0
Under Sonora Lithium Limited in Companies House is Registered to 18th Oct
https://beta.companieshouse.gov.uk/company/11349694/filing-history/MzI0NzExNzcxNGFkaXF6a2N4/document?format=pdf&download=0
I would like to know value of JV to KDNC. Any ideas??
https://www.bacanoralithium.com/pdfs/Bacanora-FS-Technical-Report-25-01-2018.pdf
Report is 261 pages long and I cannot pretend to have read it all. Page 221 did grab my attention . The NPV8 is the gross value of $3.425B discounted at 8% for 12 years to give the figure of $1.253B . I am not sure I understand it fully but it does seem have enormous potential. A better investment than Uber??
i was thinking more along the lines of the latest mre... % of drilled out reserves/resource...
Extract from Annualk Report Page 5
The Sonora Lithium Project consists of ten contiguous concessions covering 97,389 hectares. Two of the concessions
(La Ventana, La Ventana 1) are owned 100% by Bacanora through its wholly-owned subsidiary Minera Sonora Borax
S.A de C.V. (āMSBā). El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions are owned by, Mexilit S.A. de
C.V. (āMexilitā) (which is owned 70% by Bacanora and 30% by Cadence). These concessions are located
approximately 190 kilometres northeast of the city of Hermosillo, in Sonora State, Mexico. They are roughly 170
kilometres south of the border with Arizona, USA. The San Gabriel and Buenavista concessions are owned by Minera
Megalit S.A. de C.V. (āMegalitā) (which is owned 70% by Bacanora and 30% by Cadence). The asset has Measured
plus Indicated Mineral Resource estimate of over 5 million tonnes (āMtā) (comprising 1.9 Mt of Measured Resources
and 3.1Mt of Indicated Resources) of lithium carbonate equivalent (āLCEā) and an additional Inferred Mineral
Resource of 3.7 Mt of LCE, Sonora is regarded as one of the worldās larger known clay lithium deposits.
Key Operational Highlights on the Sonora Project are as follows:
? Published its Feasibility Study (āFSā) on the project. The FS targeted a two-stage open-pit operation,
reaching 35,000 tonnes (t) of lithium carbonate (Li2CO3) per annum (ātpaā) in year four.
o The FS has a pre-tax NPV of US$1.25 billion and an IRR of 26%. The capital and working capital
costs of the first stage of production (17,500 t of Li2CO3 per annum) is estimated to be US$460
million.
o Under our estimation, The FS mine plan currently has some 12% of the plant feed being mined
from the 30% joint venture areas owned by Mexalit.