Member Info for BorderBob

I was trying to sort out the Sonora connection for Cadence, so I went to their website and found this:
"Participation and Unanimous Shareholders Agreement(the “First USA”)dated 22 May 2013 between Bacanora Canada, MSB, Mexilit, Cadence and REM Mexico as amended by an addendum dated 24 June 2010"
https://www.cadenceminerals.com/projects/sonora-lithium-project/
I was born at night, but not last night. I know you can't amend a 2013 agreement with an addendum in 2010. KDNC comes across like rank amateurs, but so do many lithium-mine investors.

That article about VW's German factory may be a good reason to ditch BCN and keep ZNWD. But then there's the Australian company just starting to explore known lithium deposits in Ukraine. Meanwhile, elsewhere the Guardian reminds us daily that more than half the electricity being produced for those EV lithium batteries comes from fossil fuels.

VW sells nearly four times as many cars in Germany as it does in Mexico. Still, there's a market for EV's in Latin America, and the Chinese will probably lead the way. They might even find some of the battery materials in the local market, by 2026.

The fault, dear mrcautious, is not in Secker,
But in ourselves, that we are underlings.

With all the recently-discovered lithium resources in the world, you expect the one with the best performance to be rump BCN after Ganfeng owns most of it? Keeping in mind that the pound has dropped nearly 2% contra USD, since the August 25 “sweetened” offer?

My concern is that the shortage of lithium now will turn into a surplus by 2025, when production hits the market from a couple dozen sites on six continents. The grid can’t support the overly-optimistic projected demand for EV’s at that point. On the other hand, higher prices may hasten seawater conversion, and alternative battery technology (like sodium) for non-EV use.

I plan to be out of lithium stocks by 2024. They may not lose value after that, but the rapid increases will be memories. And if you think anything will be coming out of Mexico’s high desert before 2025 – you probably also think a pound will still be worth more than a euro by then.

The ZNWD dividend is contingent on Ganfeng having 50%+ of shares, but what is the record date? I remember something about October 30. This doesn't make much sense unless SocGen gets to keep the ZNWD shares. And then the only buyer paying a 0.25p premium would be Ganfeng itself. Unless, of course, there is a white knight lurking in the wings. Maybe we'll see another RNS later today. I think there's something in Mexican law that prevents Ganfeng from acquiring more than 35% without antitrust approval, but they're not near that yet.

Lithium companies wanting to outbid Ganfeng in Argentina: Two.
Lithium companies wanting to outbid Ganfeng in Mexico: None.
Draw your own conclusions. Mine is that no one wants to buy into a partnership with Ganfeng. BCN's fate was sealed when it got into bed with the Chinese juggernaut.

How business is done in Mexico ....

From an article appearing in Tribuna, a Mexican online publication. Summary: A BCN board member has an interesting connection to a couple of political operatives involved in Sonora mining deals and now part of a criminal investigations.

On November 13, 2012, Andrés Constantin Antonius González*** received a transfer for $39,000 from an account in the name of Tochos Holding in the UBS bank of Switzerland for “real estate consultancy”. Nothing strange for a negotiator like Constantin***, except that the money and the paying company belonged to Emilio Lozoya Austin, at that time one of the main collaborators of president-elect Enrique Peña Nieto (who would take office two weeks later) and who today serves as a witness before the federal Attorney General and is prohibited by a security bracelet from leaving Mexico City.

( ***Constantin Antonius is a key member of the Board of Directors of Bacanora Lithium; in fact, in 2012 -- when the $ 39,000 was triangulated for Lozoya -- Constantin, like Lozoya, belonged to Peña Nieto's transition team.)

Tochos Holding, according to investigations by the Financial Intelligence Unit and the Attorney General's Office, was created in 2008 by Lozoya to hide bribes and “loans” from such firms as Altos Hornos de México (owned by Alfonso Ancira, arrested in 2019 and charged with corruption, money laundering and fraud).

The money, as soon as it was deposited, was spent to pay for part of a luxurious property that Lozoya acquired in the Lomas de Bezares subdivision in the country's capital, also according to investigations by the Prosecutor's Office and national media reports.

Needless to say, shortly after entering the presidency, Peña Nieto finalized the transfer of rights to more Sonora land with lithium.

https://www.tribuna.com.mx/sonora/2021/10/31/politica-dinero-radicalismo-enredan-la-explotacion-del-litio-en-mexico-el-caso-de-sonora-273570.html

“Delusions of grandeur” is probably the best way to describe those who imagine US diplomats would care how Mexico deals with a mining project that is already half-owned by the Chinese and has committed to sending all of its product to China. Not to mention, the Mexicans are sensitive about interference with internal affairs, and would not just ignore such efforts, but purposefully veer in the opposite direction.

What is disturbing is that Mexico has only 60 days to reject a deal; otherwise it is considered approved. But the clock doesn’t start running until all of their questions have been asked and answered. Bacanora and Ganfeng should be disclosing the dates of those dialogues, if not their contents.

Meanwhile, more than half of the energy used by lithium-enabled British EV’s comes from fossil fuels. The publicity stunt in Glasgow will ignore that inconvenient truth.

Ford has already announced plans to spend $7 billion in Tennessee and Kentucky to manufacture EV batteries with partner SK Innovation of Korea. Those “mega-sites” are much closer to lithium sources in Arkansas and North Carolina, which are farther along in development. They are about the same distance (2,000 miles) as Hermosillo from the Nevada and Arizona lithium sites. Ford may very well build EV’s in Mexico, but with batteries made in America.

Ganfeng, meanwhile, does make batteries in China. Would they want to open a new factory in Mexico, when they are trying to keep up with demand at home? Probably not until the Mexican government allows a lot more mining than one site in Sonora.

BCN owns about 35% of ZNWD. If the takeover of BCN succeeds, the ZNWD shares will be distributed to BCN shareholders before offers to sell to GF are accepted. GF owns about 30% of BCN already, so they will own about 10% of ZNWD – significant, but not a major concern for the other 90% shareholders.

When the distribution of the remaining 25% of ZNWD shares is scatter-shot to thousands of ZNWD shareholders (who will get about 1 share of ZNWD for every 4 shares of BCN they hold before they decide whether to sell to GF), I am expecting much of them to be dumped on the market and the price to decline significantly. At that point, I’ll buy more. On the other hand, if everyone takes their BCN payoff and invests in ZNWD because they really like lithium stocks traded on AIM, the price might rise.

"Further to these instructions, the Bacanora Directors and Bacanora now understand that, in line with the nominees' current practices, such acceptances will only be submitted by the nominees to the receiving agent towards the end of the Offer Period, as part of their overall submission of acceptances received from their other beneficial shareholders. "

@Chameleon Not that it matters, but Bacanora is nowhere near the California border. The Mexican state of Sonora does not border on California. Go south from California and you arrive at the Mexican state of Baja California. Sonora borders the states of Arizona (due north of the Bacanora site) and New Mexico.
And what’s wrong with the US car industry relying on Chinese lithium? The American government is subsidizing the rare-earth mine (in California!) owned by publicly-traded MP Materials but controlled, according to recent claims by short sellers, by the Chinese government.

@KLUCK17 "With hindsight . . ."
On May 13, the ETF “Global X Lithium & Battery Tech” was trading at about US$60 per share. Today it’s above US$90 per share. It’s a basket of lithium stocks – the third largest holding, about 6%, is Ganfeng. Albemarle is first, with 14%. Tesla comes in 10th at 3%+.

Those who held BCN before May saw its value increase by 50% that month. Those who moved on but stayed with lithium, could easily have gained another 50%. But of course, some people are never satisfied.

Some sort of pump-and-dump going on here, spreading a May 2021 article that was repeated in large part (even the same illustration) last June?
https://www.lightmetalage.com/news/industry-news/applications-design/ev-range-breakthrough-with-new-aluminum-ion-battery/

Mexico, of course, has no interest in developing its own EV and energy storage industries. It is not concerned about all the production of what may be its first and only mine for several years going to China, for use in non-Mexican batteries. It is irrelevant to consider whether takeoff agreements are more important to them than takeovers. Nothing to look at here, don’t even think about putting both BCN and Ganfeng in a position where they will both choose to sell out at a below-market price to a Mexican investor.

@oggy06 "For an unproven system, quite a lot of high grade product has been produced."

Does anyone stll believe Ganfeng will use the system tried in the rented industrial space in Hermosillo, for processing small quantities of Bacanora clay/rock/whatever, using lots of electricity and water, when a process is chosen for use in the remote high desert? The mine is about as far away in hours from the Hermosillo lab, as Plymouth is from London. Those lab results can't be scaled up, and technology has advanced in the last couple years. The Chinese aren't exactly leading the way.

The president of the College of Mining Engineers, Metallurgists and Geologists of Mexico recently predicted that it will be 2025 before any lithium comes out of Sonora. By then, a dozen other major projects around the world will also be in operation, with lower infrastructure costs. Higher lithium prices will probably still prevail, and the Mexican market is twice as large as the British. But enough of the hype.

I am pleased that Dee still finds me important enough to remain a target for his Tavistock insults.

Nothing gets done in Mexico without payment of "mordida" -- bribes to local, state and national officials. It has been a fact of life since lithium was found and claims made at Sonora. It will remain the modus operandi whether BCN, or Ganfeng, or both try to operate a mine there. (This is official corruption, not the blackmail by cartels as noted elsewhere.) More than 3,000 Mexican business leaders have taken their wealth to secret offshore in recent decades. At least 80 politicians and their families appear in the Pandora Papers. That's the environment in which they (and you) chose to invest.

Ganfeng will probably decide to play the game the way it has always been played. But they need the cooperation of Chinese diplomacy, and that government lately has been inscrutable. If they walk away from the takeover now, you can be certain that they will slow down production, perhaps until after the 2024 election. They profit just as much from a lithium shortage, as they do from increased lithium production.

From the article: “In the House of Lords, Lord Lee’s question to ministers about ‘whether the takeover could restrict the UK's access to lithium supplies’ is yet to receive a response.”

The question was asked June 10 and answered June 23 by Lord Callanan:

“Mergers and takeovers are primarily commercial matters for the parties involved. The Government has powers under the Enterprise Act 2002 to intervene in transactions which raise national security concerns. The Government has recently strengthened those powers through the National Security and Investment Act 2021.

The Government is aware of this proposed transaction and is monitoring developments closely.

The Government recognises the strategic importance of securing the UK’s access to lithium supplies and is supporting the domestic extraction of critical ‘rare earth’ materials, including lithium. For example, we are part funding Cornish Lithium and Geothermal Engineering to build a zero carbon, lithium extraction pilot plant at an existing site in Cornwall through the Government’s Get Building Fund.”

Granted, Callanan is as clueless as the rest of his Conservative comrades when he calls lithium a “rare earth.” But just because you don’t like the answer, doesn’t mean you should report that it doesn’t exist.

@ mrcautious "This RNS is an utter disgrace - the BOD trying to chivvy non-accepters"
You sound like you think the RNS came from the company and not from Ganfeng