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The 😈 in me would suspect our sp is purposely suppressed following the pfs publication… preventing us from progressing further and doing our own dfs to realise the 3x premium on the sale price that would come with it…
$237m to $675m…
And because they will be providing the fixed price epc contract… along with the necessary guarantees, project finance insurance and debt financing… who’s to say they haven’t already embarked on a dfs level study on behalf of their prospective financiers…
It's of no consequence anyway....just my curiosity...WAI done the PFS and the optimisation is at PFS level... in December KM stated they would probably contract someone fairly soon...who was it lol?
https://youtu.be/CjScNlQ51kA?t=410
Probably not obliged nor at liberty to… although I could argue that they have told us already that they will progress the development of the Amapá Project jointly in the 30oct rns…
Maybe.....but then why not name TCIDR instead of "An independent Chinese consulting engineering company".
Why not… they’d be the first that I would ask… considering they’re going to submit a fixed price Engineering Procurement and Construction ("EPC") contract for the Amapá Project...
The optimisation study I was referring to.
@Dallasdaz,
I believe the two tonnes of ore are going to a Chinese company to analyse PSCI - I'm not sure who they are, if that's correct.
https://youtu.be/gEswmiGsVUA?si=YXWW8tYh5fTOgQ5a&t=221
Don't think they carried out the optimisation studies.
We should own 35% amapa by the end of 2024/beginning 2025… start of construction…
On a 67%fe pfs with an anticipated npv $1.5bn…
pfs $1.5bn* - 84.2% discount = $237m…
dfs $1.5bn* - 55% discount = $675m…
we are fully committed to this and will only revert to plan b if it proves impossible to do a 67%fe product…
What if it ends up worth 1.25 billion!
Divi up our share + all other assets (sell lock stock and barrel
£1.50/share? Give or take a penny or two
Engaged late last year…
https://www.lse.co.uk/rns/KDNC/strategic-development-and-financing-b3emdmzwcgoalyu.html …
The MOU is the result of our ongoing discussions between the parties to progress the development of the Amapá Project jointly…
Well @ EV ...the other thing ZIOC don't have is our BoD 😂
Do we know the engineering firm we engaged who delivered the optimisation studies?
What I would say is KDNC is far too cheap, looking around on AIM ZIOC market cap is £45.79m and they are in the Republic of Congo with (2014) $2.2bn capital expenditure to get 12mt of 66% product. They don't have a port, they don't have a railway, they don't have an existing mine, risky jurisdiction, much higher construction risk etc, yes it's a big resource and they [currently] have 100% of but it may never get to production and holders will be continually diluted, I'd take my chances here vs there any day. Our mine life can be expanded with the neighbouring deposits also.
I'm intrigued how the DFS can run with implementation and the Chinese charity has done flowsheet optimisation work as well as providing the means for cost savings of $60m + through procurement.
Well, looking back at 30th October:
Development Programme
Under the MOU, TCIDR will provide a final proposal to complete the Definitive Feasibility Study ("DFS"), and on completion of a successful DFS, will submit a fixed price Engineering Procurement and Construction ("EPC") contract for the Amapá Project. The DFS, EPC contact and any other services provided by TCIDR are subject to both the services being provided on a competitive basis and to PBA's and DEV's commercial evaluation and approval. TCIDR will be appointed the General EPC contractor for the Amapá Project once these approvals have been granted and the provision of TCIDR-facilitated project financing is secured. This will require the execution of legally binding documents.
I think at the point TCIDR is appointed we will have been bought out, just my expectation - the data room has been running for over a year.
That's my expectation, looking at KM's demeanour in the last interview also gives me reason to feel confident there's things on the table.
It would also make sense for Chinese to have Iron ore supply at hand in Brazil at 69%.
Saving any company tens of millions doesn't happen without a fee or vested interest - juts a thought - Chinese takeaway!
....I'm wondering whether the plan is to be divested of everything else as much as possible so a sale of Amapa is a possible sign off for Cadence as well.
... Purely a musing based on what I might be thinking at this juncture & no grounds to consider or assume this might be the actual plan other than KM might be getting tired of taking flack for being on the BoD of 3 effectively poorly performing AIM co's 🤔
Https://www.edisongroup.com/research/real-progress-real-value/32853/
Yes, personally I don’t think a typical PFS discount is fair because this is a proven operation so lower risk than a typical PFS.
It’s been suggested (by professionals) that the value of amapa based on the current pfs published is:
$978m - 84.2% discount = $154.52m…
the $110m is our dipb investment valuation from the jrp to further progress the project to dfs and realise the uplift associated with that:
$978m* - 55.0% discount = $440.10m…
Cheers!!
:-)
If you mean our stake in the Amapa project via Dev Mineracao then the cash would go to Cadence and the share price would increase to reflect that cash balance (probably not fully), the policy of Cadence is to re-invest but it should depend on how the share price is, if there is a discount to NAV then buying back shares or distributing some or all of the cash to shareholders as a dividend should be a consideration.
Clearly management see the mine as worth far more than the $110m book value and I expect it to be worth more once licensing and 67% test work is proven as the NPV will be well over $1bn at that point.
My research suggested around 20-25% of NPV is a fair value for PFS stage however this being a proven refurb then 30% may be a fairer assumption, $949 x 30% is $285m, I expect 67% would move the NPV up above $1.5bn and 30% of NPV to $450m, KDNC stake being worth $150m. Perhaps the current environment means we take $100m, which gets you to about 44p per share.
If I were a shrewd PE investor wanting ownership of the project I'd be making an offer to buy out KDNC for less than 44p to get the Dev (and EMH and EG1 and Sonora) holding at a substantial discount to book (& fair) value. They could then fund it up to the 49% via Cadence at a cheaper rate given the lack of strategic shareholders to block it. I'm surprised it hasn't happened yet.
Question,, if hypothetically we got bought out for say 50m dollars, how directly would that benefit existing shareholders?
Would the share price automatically increase reflecting the buyout, or would KDNC get the cash and have to potentially distribute a portion to shareholders, assuming they would also take some of the 50m to 'reinvest' in other potentially viable junior mining projects?
Any comments appreciated,
Thanks
:-)
Agreed...but you can see why he said we won't be going to 49%... At roughly 1M per % that's another 15M to invest which we ain't got. 7M for a DFS... you can see why we've pushed it down the road.
..... well if we're going to be bought out (& I hope we are & soon, remembering the originally quoted timeframe for Amapa) I trust it'll be for good value maybe 'potentially' $200m for us sounds good providing it doesn't turn into the potential $200m for Sonora or potential $200m for YANGI eh 🤣 .... fingers very very crossed for the buyout option 👍🏼😄