Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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35.47 paid
Initially I was slightly concerned with the mention of a 'further Board meeting' in this RNS given that in the June HK Exchange filing the equity investment had been delegated by the Board to Ganfeng management to close. However, on reflection, and given the further clear statement of intent by Ganfeng in this RNS I am inclined to suspect that it may be to decide on/approve the increased investment option in Sonora and/or sign of the terms of the project funding. Pure speculation on my part though.
Good post SJB and as good a view as any. Whatever the final detail turns out to be it demonstrates that even if the gaps are fully or partly equity funded the scale of dilution is containable and there remains plenty of potential increase in value for existing shareholders. The current share price is bonkers - but good for those accumulating - and today's RNS provides further reassurance.
Agreed, we could easily be testing 40p again before close tomorrow.
Yep doesn't sound far off. Pretty sure Cadence haven't got any ammo left so hoping for a decent relief rally.
Great News ... the 3rd approval from SAFE should be a mere formality ...
mr wang xiaoshen... the deputy chairman of ganfeng lithium commented... we are continuing to progress the approval process in china in order to complete our initial investment in bacanora lithium and its sonora project... we are looking forward to working with bacanora to develop this world-class project... our significant investment demonstrates our belief in the viability of the sonora project and its ability to become a world class operation and support ganfeng's strategy of growing to a 100,000tpa lithium producer... our technical team is commencing its review to identify areas where ganfeng can add value to the project delivery... ganfeng is committed to supporting bacanora in its financing and commencing development of the sonora project in the coming months... it is proposed that mr wang will join the board of bacanora as a director upon the completion of the ganfeng investment...
This will deffo be fast tracked now.
Thank you very good news. Addict happy now ????
Newboy58, never a problem !
this shows that there´s a lot of project funding activity going on behind the curtain ... BCN will have to wait for all final approvals from China before they can publish their finance package which IMO is already decided ...
Putting it this way does make BCN look an impressive investment so why doesnt the market wake up to this ?
My theory is the the waters are a little muddy still from the will we or wont we have oversupply of Lithium with all of the conflicting blurb doing the rounds on the internet from various analysts AKA guessers !
I am wondering if they don´t try to get a new agreement with State General Reserve Fund of Oman ("SGRF") - this 65M us$ would be very helpful to fill the gap ... and with new cornerstone investor Ganfeng it would be a containable risk for them ...
Finance position. Sonara using tier one providers from Europe and America is $420m.
The company have secured the following:-
1. RK mining $150m but have drawn in July 18 $25m.
2. Hanwa $25m
3. Ganfeng 22.25% is $94.5m
4. Ganfeng share 29.99% and sonara 22.25 % purchase is approx $20.
5. Assuming still can get SGRF investment $65m.
So have 125-94.5-25-20-65=$329.5m.
Hence shortfall of approx $90m.
In terms of reducing this would suggest the following:-
1. Suppliers from China rather than Europe and America will in my opinion yield a 10-20% saving. Hence reduce shortfall by between 42-9.4= $32.6 and $65.2
2. Float Germany lithium mine
3. Ganfeng take up 50% of mine and then no shortfall.
4. A rights issue when the price is more favourable.
But consider one alone and shortfall between $57.4 and $24.8.
A fair amount of assumptions in the above so feel free to critic
Securities pledge from Sonora Lithium to RK. Registered with Companies House.
https://beta.companieshouse.gov.uk/company/11349694/filing-history/MzI0MTg5MjMwMGFkaXF6a2N4/document?format=pdf&download=0
"If everything goes according to schedule, we'll have our financing plan sorted out by the second quarter of 2020," Müller said.
"After that we'll need another 18-20 months to prepare the mine and processing factories. In other words, I hope mining can kick off in the first or second quarter of 2022."
Zinnwald is often forgot about but it shouldn't be. Can only hope route to finance is a bit smoother than Sonora.
worth reading ....
https://www.dw.com/en/germany-hopes-to-mine-lithium-the-white-gold-of-e-mobility/a-50073822
Interesting Tomcat, well found. Also of the opinion it is only some red tape holding things up. Their government departments are probably quite busy just now given the political situation.
My only thoughts are this was trading well into the 50's after announcement of deal. Now in the low/mid 30's, on deal conclusion surely we will see a 75-100% type rise. An almost fully funded lithium mine with a partner like Ganfeng can not be trading below £100m. It has to be more like £200m, rising through construction.
at the 35th meeting of the fourth session of the board of directors held on 28 june 2019... the company considered and approved the transaction with 10 votes for... 0 against and 0 abstention... and authorised the management of the company to deal with related matters of the transaction at its sole discretion...
according to the requirements under the guidelines on standard operations of companies listed on the small and medium enterprise board of the shenzhen stock exchange... and the articles of association, the transaction does not constitute a related-party transaction... nor a material asset reorganization as stipulated in the administrative measures for the material asset reorganizations of listed companies... and therefore... it is not subject to consideration at the general meeting of the company...
that answer is also on a postcard below zarro... you can see how ganfeng m&a tends to work in the way they have funded olaroz... nothing cast in stone... but i’m expecting it to follow a similar route here...
the only reason i see ganfeng allowing dilution of their 29.99% bcn holdings is to allow another partner in at plc level... could be that they were the blocker...
Zarro, I'm really not sure you, or anyone else, is in a position to say it's a red herring. The fact is, we don't know and therefore a statement to shareholders would be very helpful.
As far as your other comment is concerned, I agree entirely. And this is exactly what's holding the share price back.
Ha!
But do you not agree, Tom, that the company really should inform shareholders of the current status? I know communication, is not one of his strengths, but an update wouldn't do any harm, would it?
Groan - I agree Tomcat. The rights issue outcome is a red herring in terms of the BCN / Sonora equity investment transaction as announced, even if they went on the press the button for 50% at project level. Its peanuts for Ganfeng. The bit that is not clear is the terms for the broader funding gap - who / how / how much etc. and to what extent that is part of the cornerstone agreement. That is what will dictate the share value potential for existing investors - but even then that outcome is only the question between £1 or £1.50 or £2 or £2.50 and so on.
In terms of the remaining sign offs, lets also not forget the vested attraction of the mine infrastructure supply to Chinese manufacturers. The approvals will come. The investment will be made. Quite how the project is funded remains the mystery for me.