George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Bannor. To sum up your view of KDNC- you believe that the company is substantially undervalued and you might sell when the share price is 20p but you do think it could be higher than 20p.
Do follow this link https://www.youtube.com/watch?v=2mSj0tGegSQ and listen for about 10 minutes.
Market cap at current price £8m
Edison Research
Amapá stake worth more than Cadence
Our risk-adjusted (for its stage of development) valuation of the 5.2Mtpa Amapá iron ore project in Brazil is US$154m/£122m (Cadence share £37m, or 21p/share). This is based on an unrisked valuation US$978m (NPV, 100% basis, 10% discount rate). This project, of which Cadence own 30%, is at pre-feasibility study (PFS) stage, but importantly is potentially a brownfield refurbishment and restart rather than a greenfield iron ore mine. Our valuation is similar to the PFS NPV10 of US$932m and allows for significant capital reconstruction and refurbishment. Cadence has multiple paths to creating additional value at Amapá by continuing to build its stake (it has first right of refusal up to 49%) and continuing to de-risk towards full bankable feasibility study (BFS) status, which should be relatively straightforward
given its history as an operating mine.
W H Ireland
Valuation: A significant discount to sum of the parts
Cadence is an AIM-listed, mining-focused investment company with a portfolio of minority stakes in mining projects. The current value of its major listed equity is equivalent to 81% of its market value. These holdings include 6.5% of European Metals Holdings, 1.9% of Hastings Technology Metals and 8.7% of Evergreen Lithium. We calculate a base-case sum-of-the-parts (SOTP) valuation for Cadence’s portfolio at 32.2p/share, with a high-case valuation of 57.1p/share as Amapá is de-risked through progressing to full BFS and Sonora progresses towards production. The market appears to be placing very little value on these assets, but we see both of these catalysts emerging in time (and a JV partner in Amapá at the project level is the most likely potential catalyst in the nearer term). Risks include further project delays, political uncertainty in Mexico and broader commodity price cycle risks.
Albemarle now expects 3.3mn tonnes of lithium carbon equivalent to be needed globally by 2030, down from its previous forecast of 3.7mn tonnes.The revised figure, treble that of last year’s 1mn tonnes, still presented a challenge for the industry, executives said.
Spot lithium prices have sunk 82 per cent to about $13,500 a tonne since the start of 2023, leading much of the industry to become lossmaking, with Albemarle swinging to a net loss of $618mn in the fourth quarter of 2023 compared with a profit of $1.1bn a year earlier.
“We’ve seen prices fall to a level nobody can really explain,” said Norris. “Because of the unsustainable level of current prices, prices will go up.”
Albemarle now expects 3.3mn tonnes of lithium carbon equivalent to be needed globally by 2030, down from its previous forecast of 3.7mn tonnes.The revised figure, treble that of last year’s 1mn tonnes, still presented a challenge for the industry, executives said.
Spot lithium prices have sunk 82 per cent to about $13,500 a tonne since the start of 2023, leading much of the industry to become lossmaking, with Albemarle swinging to a net loss of $618mn in the fourth quarter of 2023 compared with a profit of $1.1bn a year earlier.
“We’ve seen prices fall to a level nobody can really explain,” said Norris. “Because of the unsustainable level of current prices, prices will go up.”
Our continued engagement with the government of Amapa is an integral part of the restart of the Amapa Iron Ore project. In late January, we held several key strategic meetings with government secretaries, Vice Governor Antonio Pinheiro Teles, Governor Clécio Luís and the Senator for Amapa Davi Samuel Alcolumbre. These strategic meetings, alongside our regular government meetings, form part of our continual social and community engagement programme.
For the residents, businesses and shareholders of Amapa, this means real, tangible benefits. Listening to and working with your government and its leaders will create opportunities for job growth, infrastructure advancements, and long-term economic stability. Restarting the Amapa Iron Mine isn't just about the industry—it's about nurturing prosperity for everyone in this vibrant community for the long term and sustainably.
Feb 16 (Reuters) - Australia's Hastings Technology Metals (HAS) said on Friday it will supply mixed rare-earths carbonate from its Yangibana project in Western Australia to Chinese producer Baotou Sky Rock for a minimum period of seven years.
Shares of the Australian rare-earths miner advanced as much as 16.1%, their biggest intraday jump since July 4, 2023.
Well worth reading info at link
https://www.pv-magazine.com/2024/01/15/new-solid-state-battery-charges-in-minutes-lasts-for-thousands-of-cycles/
Shares of Cadence Minerals appear to be bumping along the bottom of their trading range near 5p and a £10m market cap. This is despite the recent positive read across from another “big project” small cap – Horizonte (HZM) getting its Araguaia ferronickel project over the line, wrong footing the market, after an substantial autumn sell off in that stock. Shares of HZM have more than doubled on this news – squeezing shorters painfully.
Amapa Iron Ore Project
What the market may be missing is that KDNC is actually in a excellent position vis a vis its investment in the Amapa Iron Ore project. KDNC has been, under the radar, hitting its targets, delivering a robust pre-feasibility study, accelerating its operational licensing, negotiating with government bodies et al. In terms of the financial “barriers”, which is where many projects stall, Amapa seems to also well advanced in this regard with the project executing a strategic development and financing MOU late last year.
Moreover, the company has indicated that they are looking to repay historic secured creditors, who have prevented Amapa from shipping its iron ore stockpile, something which investors have thus far not factored in.
Debt Elimination
Looking back at previous announcements and some simple maths I estimate this debt was worth some $130m. If KDNC can use the stockpile as a one time settlement this would clearly be a great coup for it, and is not something factored in at a 5p share price. Ultimately the elimination of the $130m debt package would be regarded as a significant win.
In addition, there could be a brake price sentiment based on the company’s current debt facility, which even though its even though this is being paid out in cash, may be being perceived as a loan being paid by the issue of shares.
However, one would estimate KDNC may only £1.3m to clear this debt, a relatively small amount of cash for a company which has other significant assets in its other equity investments worth circa £4 to £5 millon. One would imagine if there was an announcement saying that Riverfort were out of the game, this would remove the current apparent share price cap.
$949m NPV
The market already knows that Amapa is has a NPV $949m and with assets free of encumbrances Amapa look like a tasty morsel for iron mining companies looking for expansion in Brazil. Major players are always on the look out for projects where juniors like KDNC have done all the heavy lifting to get a project production ready.
Oil and gas majors step up efforts to diversify into lithium
https://www.ft.com/content/7616a9f4-e0db-4d61-b189-9e81ddd8137b
Https://www.ft.com/stream/d23cab6f-a0b8-4136-baa3-1f843b593433
On KDNC website
Worth looking at page 4
https://www.cadenceminerals.com/wp-content/uploads/2023/11/Cadence_PPT_V.1_2023_11.pdf