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On other forums, they are discussing why the market is keeping their stock in a narrow range. This seems to be a pattern these days? Well, one commented that the buying is not sufficient.
Secondly, the 10% customary short stock also is a factor.
So, perhaps to truly re-rate, one day we may see an RNS that the market may not expect given Greenland is in the news and in particular GGG & Kvanejfeld in almost every reporting in the US & globally.
Or there is a deal. However, it was interesting that from Adams Intel, the nearby can send their ore to Kvanejfeld to process. How that works out remains to be seen. Suffice to say, the US Secretary of State [Carla] has visited Kvanejfeld AND TANBREEZ [privately owned] in Greenland whilst the USGS is doing field work at Kvanejfeld. GGG has RNS*ed this although the Tanbreez bit came from another article from recall.
So GGG is Australian listed, Tanbreez is owned by an Australian geo [Greg] and REM plc*s Greenland licence that abuts Kvanejfeld also had its Australian Chairman, DL.
Someone on the main board said that if the takeover of BCN by REM plc had taken place, then by now we would be PRODUCING. I do not think the money men would have allowed REM to make any higher offer than the £1 valuation. What happened - no one knows.
On the main KDNC board, many face ...so in keeping up with how to win friends and influence people [book], it would be better to leave discussion to topics that are popular at the time. Serious valuation or industry news is of little interest etc.
With thanks.
Tues, 20 Aug 2019
A few thoughts:
1)The Hannan note on Cadence talked of "catalysts" re: Bacanora which essentially is re: funding for the mine build. So, the market is also aware of this "mkt rule" and a/c has marked up KDNC shares in light of that "principle/rule" by which the investment community play by.
The play book is also about "valuation". I am cognisant that having calculated by simple maths, how much is the JV worth on the open market [Gangfeng part M & A] which came to £10m, it did not meet with favour, to put it mildly.
However, in the Hannan [licenced to do valuations by the FSA etc], they came up with US$11 million in mid-2018. The exchange rate is currently £1=US1.2 instead of the higher rate. Since one year has passed since the Hannan note, Gangfeng did NOT produce valuation out of the air as they all have INVESTMENT BANKS to do their valuations. Therefore, the figure has gone to US$12m [+10%] since mid-2018 = £10m [Diff between US$11m in 2018 & £10m in 2019].
When DLenigas offered £1 to BCN to take it over some time ago, it could not have come from anywhere other than an investment bank*s valuation to cover themselves. Today, VSA Capital has put a target price of £1.14 on BCN from recall. So, again, upped by 10%. I note on that forum it was said that VSA was a commissioned note. Nevertheless, ALL firms are calculating basic Business Finance metrics and usually every investment house*s cals only show a small variance.
Hannan figure of 0.87p and WH Ireland*s at 0.9p for KDNC at their respective times show the normal variance.
These figures are no longer live because the KDNC investments have changed. However, it was of interest as to the values of the JV.
I have gone to a London-listed co forum that is in Greenland. Rod who used to be the head in GGG was on SKY NEWS talking about Greenland.
Due to all the hooooo haaa, perhaps, KDNC is no longer able to give interviews of the like?
On the main KDNC board, I note many newcomers and no one is talking about roompers? Why? So, it looks as if it is selective towards ALL the old-timers who are naturally interested in valuation from Hannan/WH Ireland and from what the FSA recognises as authorised & licensed to do cals.
Suffice to say, the more accurate a holder can understand the "valuation" models, the easier one can ascertain value, not at the back of the envelope eg Gilby with a t/p of £4+. Many do not see the FULL broker note. Since the Hannan note is on open file, one can then adjust [NOT do new cals] for mark-to-mark live prices of KDNC*s investments. In the US, NO one does their back of envelope cals as the whole mkt plays by the playbook.
Tues, 20 Aug 2019
KDNC is up on the 2RNS re: Hastings rare earths & Bacanora [KDNC JV*s] as they move closer to "catalysts" as Hannan terms it but not quite there yet?
@news the broker note you refer to made the rather unfortunate mistake of thinking we owned 30% of all of the areas to be mined when in fact we only own 30% of some of them:
"First Ore Reserves Declared on Rare Earth Joint Venture Ground, Yangibana, Australia" (30 January 2019)
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/KDNC/13951069.html
and those JV's come later in the mining plan. So perhaps a more reasonable measure of value to KDNC based on Yangibana's market cap might be to discount it to somewhere in the region of 5% IMHO.
Hannan: www.cadenceminerals.com
Sonora Lithium 30% Joint Venture: Bacanora & KDNC: Value US$11 million
[I used Ganfeng*s buy in of BCN & via simple maths got £10m for 30% KDNC*s JV to just counter check. So figs are quite close]
Yangibana Rare Earth 30% JV: Hastings HAS:ASX: Value: US$34.3 million
£1=US$1.2 {£28.58 m}. I checked how much is 30% of HAS*s mkt cap=30x A$131.3m=£23.17m} just to see if % is used like WH Ireland. =======
US$45.4 million/£37.8million
Not in the Hannan note:
Auroch [nickel] on ASX: AOU: KDNC owns 6.7% £262,000
Clancy Exporation, now Sagon Resource [ASX:SG1]: KDNC owns 3.9% -
Macarthur Minerals: Iron ore [Canadian listed MMS] : KDNC owns 10% £1.3m
[SP C0.7, Mkt Cap: C$21.383m & £1=C$1.62
In the Hannan note:
European Metals : KDNC owns 19.2%
[Mon, 19 Aug 2019, SP of EMH is 18p = £27m mkt cap, so 19.2%= £5.184m
In the WH Ireland note per Observer842
per 19.8.19 post at 8:09: "Valuation"
"In 1 of WH Irelands coverage reports a few yrs ago, they estimated
our Greenland could be worth 20% of Greenland Min & Energy [ASX:GGG]
who own the world class Kvanejfeld rare earth project, Greenland.
REM plc owned 100% of the licence that abuts Kvanejfeld. =£16.62m
GGG sp is A 12,5c, Mkt Cap A$148.8m, £1=A$1.79 x 20%
Illustration only & Hypothesis.
https://lse.co.uk/profiles/observer842/
Listed Investments:
MMS+AOU+SG1+EMH = £6.746 MILLION {not included small % of BCN]
MINUS £3.5m in loan notes = £3.264 million in credit or in the BLACK, 19.8.19
--------------vs KDNC mkt cap of £10m at 0.10p.
NOTE:
As to when Sonora JV can be sold will depend on when someone takes out BCN.
Same with Yangibana. However, both have a valuation by Hannan of £37.8m.
Stage 1 of BCN will be for 18 yrs and Yangibana 11 yrs.
GREENLAND
The Forbes article posted on this forum today, Mon 19.8.19 is of
interest if 20% in theory could be worth £16.2m.
MARKET
So, the market is currently giving KDNC a PREMIUM over its listed investments of £6.36m [£10m mkt cap minus credit of £3.264m]. The market is giving £6.36m for everything else.
So, thanks to Observer842 for the info. Now, I know how long to wait for the lithium JV*s. So, Amapa meanwhile is of interest as it could provide the cash-flow side if the project goes through. Then the Picasso + 2 other Australian licences could be for the future. Greenland will be the WILDCARD now with the Forbes article about GGG/Kvanejfeld.
Thanks. I am happy with my own perception which did NOT change any of Hannan*s note. However, open to re-calculations as there can be errors.
KDNC : Debt vs listed investments
From the Hannan note, it shows that KDNC owns 20.4% in EMH from recall. It is now about 19%+. Today, EMH share price is 18p with a mkt cap of £27m.
So, KDNC 19%+ comes to £5.4m if 20% or a bit less as not sure what the up-to-the-last-minute figures are.
This does not include Auroch [ASX with some 6%+] & Clancy [ASX with som3 .9%], Mcarthur at 10% [Canadian listed].
The notes are £3.5m or a bit less from recall. I have not kept up but the main forum knows the latest figure.
So, £5.4m without Auroch, Clancy & Mcarthur added in yet MINUS £3.5m say= £1.9m AT LEAST IN THE BLACK ie +.
For that reason, the Hannan note on the JV*s is of interest which is posted below.
That does not include the Australian 3 lithium assets with 100% interest in the licences nor Greenland which is now in focus.
Mon 19 Aug 2019
Please note that the Hannan note has now to be noted that KDNC no longer owns 7% of BCN and so the value changes since this is an investee co as opposed to the Sonora BCN JV.
On the Cadence Minerals website, they have a Hannan & Partners Broker Note. Hannan needs no introduction as one of the top investment banks in London. Mr Hannan was the former Global Chairman of Equity Markets, JP Morgan. Hannan specialises in resource stock.
"Hannan had a target price of 0.87p" dated 4.5.18"
Quote:
"We arrrive at a sum-of-parts valuation for Cadence assets of US$169.1 million. Applying our NPV multiples to the co*s operations, we generate a VALUATION of 0.87p/sh."
"Next Steps - CATALYSTS. In our view, news of such financing is likely to act as a catalyst for share price RE-RATING of Cadence Minerals , as well as the project operators Bacanora Minerals and Hastings Technology Metals."
Hannan gives a breakdown of how they arrived at the US$169.1 million figure:
"Sonora Mexlit JV 30% owned- $11 million."
"Yangibana Rare Earth 30% owned - $34.3 million"
"Greenland 100% - $0"
Comment:
Whilst the KDNC direct ownership of shares in Bacanora has changed, nevertheless, the two JV valuations are interesting and insightful
In fact, the Sonora JV US$11 million value was close to the £10m which I got by simple maths of what Gangfeng paid for the direct ownership of the Sonora project.
As far as Yangibana [Hastings] is concerned, it is a rare earth project in Australia and appears to be more highly valued by Hannan than the Sonora lithium JV.
So, Greenland has not been valued.
The Hannan note whilst last year, shows that the discussion of "VALUATION" on the main KDNC forum is a valid one amongst holders. Also, as I said, there are catalysts that drive the share price forward or backwards and as such there is re-rating or de-rating as may be the case. These are general principles by which ALL brokers and investment bankers + the City value co*s.
I was trying to look for the WH Ireland note that Observer842 mentioned on the main KDNC forum today relating to the Greenland licence. I am interested in this as the latest news from Forbes is interesting re: Kvanejfeld rare earth.
Link: Hannan broker note on KDNC www.cadenceminerals.com
Please note their disclaimers.
KDNC at 0.10p mark has a mkt cap of £10m.
It is not difficult to see that rare earths appears to be of value? Hannan is FSA authorised & licenced to produce notes and valuations
Mon, 19 Aug 2019