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This should help us.
Europe's largest lithium project could be up and running mid-2022 -EMH
22ND JULY 2019
BY: REUTERS
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LONDON – European Metals Holdings could begin operations at its Cinovec lithium project in the Czech Republic by mid-2022, and is holding preliminary discussions with potential customers, it said on Monday.
Czech utility CEZ, in which the state holds a 70% share, last week said it had conditionally agreed to provide two-million euros ($2.2-million) through a convertible loan to EMH which paves the way for it to become one of EMH's largest shareholders.
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European Metals, listed in London and Australia, controls the exploration licences to the Cinovec lithium/tin project in the Czech Republic, which it describes as Europe's largest lithium deposit.
It could help CEZ shift to renewable energy and supply Europe's electric car industry.
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"It's very big, it's low-cost, it's surrounded by carmakers and battery makers and it's in the EU, where there is a very strong political push to develop the battery industry," Keith Coughlan, MD at European Metals, said in an interview.
The company's shares have risen nearly 50% this year.
Coughlan said the site also offers tin but at current tin prices, it's not economic, just a useful byproduct.
The CEZ loan is only a small part of the total capital expenditure of $480-million, but Coughlan said it was a commitment that inspired confidence while CEZ carries out due diligence on the project.
CEZ can convert the principal to shares at any point before the loan's expiry at the end of the year. Czech Prime Minister Andrej Babis has supported the deal if analysis shows mining the project would be promising.
European Metals is working on a definitive feasibility study and says it could begin project construction, which is expected to take two years, in mid-2020.
The CEZ loan would make it easier to talk to other financiers, Coughlan said, adding he had held preliminary discussions with buyers, including carmakers and battery producers. All are European, although some are units of companies with headquarters beyond Europe, he said.
The European Union, keen to shorten its supply chains, is focusing on strategic minerals and developing supplies for its electric vehicle industry.
Ivybush...
There will always be those that have no hesitation in being abusive behind the anonymity and safety of a keyboard.
No matter ... that's life...:-)
My post re-reading it unfortunately isn't quite was I was trying to convey and I certainly after all these years of investing know the relationship of a MC to the number of shares in issue.!!..:-).
What I was attempting to convey was my frustration at how this company seems to be having the life squeezed out of it share price wise almost as if someone above is saying '' how low can we make this go''.
Well I'm very pleased to hear like me you've been adding at these levels and if the accumulation that was going on last week continues surely we will be seeing an upswing sp wise here very soon.
For me EMH is the jewel in the Cadence crown and I wish we owned even more % wise.
Looking forward to the trading week ahead.
GLA..!!.
I was just going to say, ask tom-14.
Well, Bannor, there*s your answer from tom-14*s link at 19:22. As soon as the news came out on Twitter, I had already seen it.
So, there*s your own figures, Gangfeng [early stage and Gangfeng did say that if they choose to buy a further stake, they will have to pay market value [para phrase] at the time. I also will have to relate what many expressed about this deal. BCN had been looking for funders for some time. So, whoever introduced the JV partner, one is not sure if it was the investment bankers etc. So, let*s say that if the JV partner had not stepped in, there would have been more delays and the rest of it. So, this situation was such that the JV partner was needed ? Therefore....
I have learnt something from this weekend of conversation and discussion. In terms of crowd theory, I am now cognisant that what the reports say is accurate ie what people are looking for in stocks?
I decided to look as I was aware that it is good to see another view.
Thank you all.
Sun 21 July 2019
https://www.asx.com.au/asxpdf/20190502/pdf/444s310gl2djfd.pdf ... this m&a may have more relevance to us... it being a lithium spodumene project in aus... at pfs stage...
I was aware of the aspect of the size.
However, in terms of size, it would depend on the production quota. One cannot use up all the resource at one go.
I am also aware of the timing aspect, hence I qualifed the M & A was, as at 28 Jun 2019 [as at: accounting term]
In terms of standard M & A, I did say it is a rough idea. This again is not my methodology but one that is used to gain some idea only.
I give the example of ARS*s 1 project in Indo wherein the analyst pointed out the potential sale price of another similar project in Indo ie Indo M & A. No two projects are exactly the same.
In the case of say, Solgold, the investment house/s use the recent take-out price in the copper industry. Again, it cannot be exactly similar in terms of location and discount etc. However, they boil it down to X price per ounce. Again, M & A standard methology. Otherwise, there is no benchmarking examples?
I am aware that your figures as I have read your post on it.
However, one has to be aware that figures need to have methodology that has a market valuation. When REM offered £1 for BCN, it was not plucked out of the air. One is cognisant that the Founder consulted and may have undertaken a formal or informal valuation report to be carried out.
Again, for the party target, it also resembles with a margin of variance to a project that is undergoing development. Again, it may have a informal valuation or one that is market led.
The lithmus test is: if one is a holder of size, one can commission a specialist short report on the Sonora project Stage 2. I know that on Twitter, some of these 5-7% holders do consult with either geologists or whatever specialisms are needed.
On one gold exploration co, one blogger said that proper people had done the sums. We didnt know who but it turned out to be a Sprotts Report. They are licenced I believe in Canada.
I did not bring up this aspect in my original post but Degsie did say the JV has value surely [para phrase].
This is an open discussion. So, it is open to all views.
However, many may now be cognisant that the Gilby Report on another forum way so way out that no analyst or investment house would have approved of.
That is where we need to be a bit more careful. So, the conservative is on the safe side. When the project is up and running and if, into profit, that is a different matter.
In the case of SXX, analyst have pre-production and post production target figures including revenue/profit valuations.
I trust this explains matters.
I am not going to be around as this topic has run its course. The future or near future will be dependent on the KDNC RNS.
With thanks.
Sun, 21 July 2019
I am usually on Twitter.
Not sure that you can accurately (or anywhere near close) calculate the value of our 30% holdings of Megalit & Mexalit... based on Ganfengs buying 22.5% of the SLPP which currently comprises entirely LV for the first 7/8 years & then mainly LV & a small portion of our 30% of JV1 thereafter.... Megalit & Mexalit have only partially been tested & are a little different in size.... My own thoughts as to the eventual value (if/when sold) for KDNC are very vey different... take your pick though if £10M works for you that's fine... Doesn't work for me though at all....
observer842
From what I understand, this lithium pricing is the aspect that banks did not like in the main.
I have not looked at this aspect because the 1st stage mine will last for 18 years from recall unless they decide to up the production tonnage etc.
If they do up production and it takes in KDNC*s JV, in part or in whole say, then, does it also not mean that BCN will ask KDNC for a proportion[30% JV] of the additional capex needed?
Do they [KDNC] intend to SELL the 30% JV and is there a market for it sometime in the future when the mine is up and running as a hypothesis?
This is the same for Yangibana, the other JV with Hastings Metals Tech.
If they want to sell at a suitable time when the mine is half way or nearing a new decision to up production or new production [after the Stage 1 is nearing the peak?], will they embark from investment co to a potential production co? If so, say, then KDNC will no longer be valued on a mark-to-market basis anymore but more for the potential revenue [or not] and profit in whatever project that will be?
BACANORA
----------------
On 28 June 2019, the BCN RNS ["Investment & Off-take] stated that Ganfeng will buy 22.5% at project level in the Sonora holding co for £7, 563,649 [£7.563 million].
This is the M & A news. So, if, say we apply this [hypothesis] to the 30% JV, then simple maths will say 22.5%=£7.563m, then how much will 30% JV be? Answer: £10.08 million as at 28 June 2019. Gives us some idea of what the open market is doing? Caveat: Not to be taken for consideration as value attributable to KDNC at this current time or thereafter as this is not in the bag. Also, to consider is production at Stage 2 etc.
What the Founder said recently has got me rather intrigued but I did not want to ask him. So, any thoughts on that? I am not going to repeat it.
As for the Sonora BFS, maybe Obs should run it through Kiran who will ask the other director who is an accountant. KDNC will have more info on lithium pricing which is usually the sticky point. That way, we may know more.
With thanks. Rec.
I think that over this weekend [mkt closed] we have covered almost everything known possibly from public info. The mark-to-market is simple maths and does n o t involve any interpretation.
I dug out my spreadsheet based on the Sonora BFS. For a @5% discount, $3,400 per tonne LCE post-tax cash flow to KDNC from our JV using "Table 16.2.2: Mine Production Schedule", I made the discounted total as: $34,999,758.27. Which is suspiciously close to $35m... Anyone fancy confirming my numbers?
Here is some CROE analysis to be taken with a healthy pinch of salt.
Conservative: 8%, $2,000: $13m
Realistic: 7%, $3,000: $22.8m
Optimistic: 6%, $4,000: $35.4m
Euphoric:: 5%, $5,000: $51.5m
I believe this is just a taster of the true value to KDNC of the Sonora Lithium Project. If (when!) the mining rate is increased beyond 35ktpa a significantly greater proportion of our JV will (surely!) be required.
One final point, I'm uncertain where my initial $3,400 came from. It appears to be the cash-flow per tonne required to assign a discounted 8% after-tax total of $802m to BCN from their LV + 70% of the JV. i.e. $3,400 is potentially the fairest toll rate KDNC could be expected to receive according to this methodology. Though when was business ever fair!? ;-)
Ob.
Yes Degsie - Obs has gone through that before.
For the avoidance of doubt:
Lastly, I would like to mention that due to the disaster at 88e [history now], one particular blogger on Twitter has had a call from the FCA? I have heard of another as well. The the case of 88e, I recall that the cost on the Slope is known to be high then at US$40. Well, this chap cited a very much lower cost etc and so forth.
One can say that this chap, not being being employed as an analyst in a big investment house may not be aware that all analysts will have on the ground info on that and they can check with the majors operating on the North Slope to check.
So, going on what KDNC has said, the Amapa iron project could bring in $25m a/c to Kiran Mozaria [CEO of KDNC] in a recent interview with Justin Waite [please check]. Mr Mozaria did not exemplify whether this is net or gross profit but I assume gross? You can ask the CEO and check again with him.
Hence, I said that this is the cash flow project per KDNC RNS. The $25m figure has not mentioned in an RNS if I recall. Anything outside an RNS or at a party cannot be said to be regulatory news just in case people are not aware.
With thanks. That*s all from me. I just wanted to clarify about the legacy of Sonora which was the subject of so much.... even on Twitter.
Its a new beginning, post Sonora now.
News . Thank you for comments. Extraxt from AR for 2018-- 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 assumed , perhaps incoreectly, that would give some value to JV and hence KDNC,
P.S.
The Founder has once mentioned about short positions. Whether that is now current, I do not know. I notice that at times of positive significant news, there appears to be no problem buying any large no of shares. I used to wonder if these are the synthetic shares of which the market is allowed to issue up to 10%? Please check with others.
I am careful when I post on this forum especially given the legacy issue of those who bought later than 0.04p in REM with a low mkt cap of £1m+ when they embarked on the Sonora lithium project [now KDNC] In order that none of us are said to be positive without numbers etc, one has to present the picture from various views. Then the readers cannot say that anyone of us did not say or spell out only what is in our knowledge or what is public information.
I posted earlier ONLY on legacy events which are historical.
That concludes the position as we all know it?
Sun 21 July 2019
Here are my thoughts on what has been posted this morning:
KDNC share price 0.10p with a market cap of £11 million, Fri 19.7.19.
Composition of Listed Investments: Per Degsie @9:15am, Sun 21 July 2019
EMH : £6.8m if 20% or [£6.46m if 19% - my understanding from this forum]
BCN : 1.7% =£1m
MMS: 10% = £1m
----------------------------
Investment in Greenland [only 1 licence now per Obs] -100%
Argentina
Australia - 3 projects
Auroch
Clancy
----------------------------------------------------------------
JV*s with Hastings Metals Tech of Australia [Rare Earths] & Bacanora [not the 1st stage and per Obs, it will be 8 years before they come to REM*s [now KDNC] JV area [Ref: Sonora] . Please check with Obs as that is his view ]. However, Phase 1 is for 18 years. The Founder said that it is structured such they can sell the stake to an outsider? However, please check again if correct re:legals.
I understand that Kiran Mozaria has said that the market makers or market will not re-value the JV*s into the share price now as they are not listed securities as such. Please check with others on this forum or Mr Mozaria again.
My Comment:
Yes, if EMH*s mkt cap equals to say what the market is prepared to give to BCN [hypothesis], then the mkt cap goes from £34m currently to £58m [BCN*s mkt cap currently], then even at 19% = £11.02 million.
£11.02m [EMH] + £1m [BCN] + £1m [MMS]= £13.02m MINUS £3m Loan= £10.02m.
One has to also remember that when KDNC sold down the BCN stake from the 20% mark, it brought the share price of BCN downwards and ended at a low of 20p. Some may be others selling but one can large % stake selling puts pressure so it cannot be released to mkt at one go and needs fresh buying .
---------------------------------------------------------------------------------------------
Summary:
£11 million market cap vs £8.8 million [listed mark to market securities] minus £3m Loan = £5.8 million [Net value] So the market is giving AN EXTRA £5.2 million in what appears to be a PREMIUM?
IVY
I also agree with Ivy that as norm that once the share issuance has been absorbed, that would help if there is fresh buying. Larry Wildman used to tell us how much more shares still to be absorbed etc.
My conclusion:
Amapa is the more immediate cash flow generative project as KDNC has said?
The rest: Australia 3 projects[Picasso is near Baldhill so can they start a new mine which needs £ to drill + technicals like PFS? , Greenland [KDNC said they are awaiting dev at GGG] & Argentine [?]. This can be asked of the co or await the next financial report.
DYOR. I have ticked recommend for Degsie*s & Ivy*s post with thanks. If anything is incorrect, just correct.
I agree with Ivybush. I have done some sums ; The market cap is £11m. 20% of EMH has a value of £6.8m. 1.7% of BCN has a value of £1m as does 10% of MMS. In addition there are the JVs with Hastings and BCN, investments in Greenland, Argentina and Australia and stakes in Auroch &Clancy. The outstanding amount on Loan Note is $2.44 - £2m.
Summary Market cap £11m, Loan Note £3m, Listed investments £8.8m leaving £5.2m . The JVs should be worth more than that and EMH with an NPV of $1.2b- £900m- should be worth considerably more than current market cap. MMS has much potential as does Amapa. Greenland who knows??
@ZEN1 I thought that we had been cleansed of abusive posters, but by a response to your comments
unfortunately this is not so.
The current outlook for kdnc investments is imv very positive and I have also been adding here.
After the recent placing @ 0.11p some would have been held in temporary hands. It is clearly
very difficult to place that number of shares in the hands of pi's in a few days.
This will take a little while to unwind but with more days like Friday [40 million purchased] I hope
that the sp will soon respond.
Thanks for the correction Zen. Fortunately I do understand the difference between your and you're. Your fundamental understanding of the market is still worryingly poor.
I'll make the correction for you :-)).....
''Zen, you're a F*%king idiot''
Just to prove I can tell a proposition from a preposition LOL !!.
So at the current SP and this might sound simplistic and even naive but surely just from what we hold % wise in EMH Cadence is a buy.
My possibly flawed thinking is this...
With EMH at around 24p if someone wished to buy 19% of it (the current Cadence % interest) then that equates to around 4.5p and yet even with all our other assets and investments we languish at 0.11p.
If 100% of EMH is 24p and we own 19% of that a share price for us of 0.11p seems ridiculous !!...I can't fathom the logic in our current SP at all.
On that basis I've been buying more KDNC recently .... this is a long waiting game but I'm not giving up.
Good luck you LTH's.