Member Info for EV_Bull

I don't think the thread title is too far off from being possible if we got to 49%.
Broadly £2+ is realistic within 2-3 years £5 is the top end if all things go to plan within 5 years. (Hastings, Sonora, EMH and Amapa in full production)

I don't see this dragging on indefinitely now, the banks know the game is up as the courts will just continue shipments regardless. The wording around the latest judgement (and Kiran's 90%) suggests to me that we'll have the 20% done by the end of the month.

Amapa 49% - Yes I personally see this as a strong possibility because Indo won't want to put a penny in to the project IMO so will sell their share down to raise capital to effectively give them a free carry.

Sonora - Our JV had an NPV of $30m based on 8% of mine plan - Ganfeng plan to increase production so this could be worth multiple of that $30m in time.

Macarthur - don't think this will be hugely significant for us at 1% maybe £2m-£5m in best case

EMH currently £15m but can easily double or more from where it is as they plan to double production (might be bought out by an Auto OEM like VW)

Hastings Technology Metals - Unknown but my guess is perhaps in the £5m-£15m range.

Lithium Technologies & Lithium Supplies again perhaps £2m-£5m could be a lot more in a future best case scenario

I think the overall point to make is that at 29p, assuming deal completion there is at least a 3x and possibly a 10x potential upside from here. If you put a 90% chance of deal completion and 90p valuation and say SP without Amapa would be 10p then the expected value of the shares today is in then 80p x 90% + 10p is then 82p.
Even at 60p then 50p x 90% + 10p = 55p.
If 10p is the minimum and 18p of the SP is amapa and 60p is the "market value" then the market is pricing in only a 30% probability of the deal being done. Therefore If you think that the chance of the deal being done is above 30% then you should be buying in spades as the expected value is therefore on your side.

@justfencing Anglo had it valued on their books at $1.2bn/£860m unimpaired (£232m @ 27%) which is around £1.50 per share.
At 49% it's £421.4m (£2.75 a share).

The $80/t net profit figures assume a very strong iron ore price throughout, halving those values may be a better indication long term but in reality nobody knows the future ore price so it's just a guess in any case.

Inverting your question, can you state why it's not possible (assuming the 27% is accomplished)?

I cannot stress enough that I choose to make very conservative assumptions. Each to their own as far as making your own assumptions.
It was a complete ballpark but thinking back it would be assuming £22m raised in equity to put towards Amapa reconstruction and any other investments required. At 60p would get you to 200m shares (25% dilution). Only half this amount or less should be required - look at the project equity portion on the spreadsheet- of course EMH could be sold off instead and that may be preferable and there may be no dilutions at all other than the options outstanding. But my opinion is it’s better to be surprised on the upside than the down side.
Part of the money we raise to fund our part of the equity needed. But yes we could potentially get the 49% which puts us in another league (double my numbers roughly).
Does anyone care too much if we make 8x from here or 9x in my guesses so no need to wince? The point was to provide a baseline to show the potential of the opportunity and provide a rough range of potential future values. Happy to see anyone else’s figures not suggesting mine are perfect but a good starting point.

The courts have just got round to publishing the prior decisions so nothing new there I could see.

WP Brave is the next ship to look out for. They will be coming thick and fast though on Pier 2.

So what might a possible $80/t net profit look like in terms of earnings per share Forward P/E and possible dividends at 27%.
£82.33m/yr factoring in possible dilution to say 200m shares.
Based on the first full year of production @ 5.3mt:
EPS is 41p per share
Forward P/E 0.7
Dividend circa 15p/ share (£30m distribution)
Retained earnings for other investments (Cash) £52.33m (26p per share)
Possible market cap £550m-£800m (P/E 7-10)
Share price £2.75-£4
All of the above just for Amapa alone. You can simply half these to get a $40/t estimate and the figures are still compelling.

So an extra three years adds 10% to the NPV8 figure, I am more than happy to be very wrong on the low side underestimating this, I will be more than happy if the low end estimates are achieved, the upside best case scenario is something dreams are made of, easily a 10 bagger in terms of upside but I think there might be a buyout or takeover before that point.

I mean both Unamgen and Dev (Incl Geralds) are shipping to China so that must be the best option.
Being that the stockpiles are already at the port and shipping rates maybe avg $15,000/day saving 10 days of shipping is $150,000 on $7,200,000 worth of ore @ 160/t it isn't as significant as you might think (2%) an extra 20 days being 4% of total cost at 160/t.
At $20,000/day x 20 days you're still only at 5% of total revenue. Not nothing but not as big a deal as you might estimate.
The higher the price of ore the less this factors in.

Strange question with an easy answer Brazil is a net exporter of ore because it has a surplus to what it needs/demands, same as Australia, there aren't enough smelters and steel mills to take it all and there is more demand in other contries so it makes sense to export it, same for soy, wood etc, this is just a global supply demand equation. China has an insatiable demand for Ore to churn out the finished products the world requires.

It's quite simple maths if we hit the 5.3MT/Yr expectation.
5.3mt x estimated net profit per ton after costs x 27% (or 49%) = $$$/£££
At 27% every additional $10/t net profit is $14.31m/yr to Cadence - at 49% this would be $25.97m/yr
$30/t profit = $42m /yr profit to Cadence
$50/t profit = $71.5m / yr profit to Cadence
$80/t profit = $114.48m /yr profit to Cadence

If we could get $50/t net profit avg over the 14 years at 27% and assuming 14 year mine life at an 8% discount with full production in year 4 the NPV 8 to Cadence is $485m so this is then worth £348.8m (over £2 a share) in todays money.

At $30/t profit over the life of the mine this 27% of NPV8 is worth $285.38m today = £205.24m (>£1.35/share)
, given we trade at < 30p AND have other assest that could bring value. this is an incredible risk\reward.
I like the odds, I like the profit, hence the big investment here.
Good luck all. Look forward to the big day.

Yep, mr.lithium is going to need another wheelbarrow!

"the Amapa opportunity looks better than ever" - Andrew Suckling, Non-Executive Chairman, 29 June 2021

It's clear to me the 20% is a done deal (fait accompli), only a matter of time, more than happy to wait.

@ziquarat you have my sympathy, as does anyone who understands the value but has to sell for other reasons.

A golden opportunity to average down then.

@Mike, there has been no update to “15 days” extrajudicial title case yet although we can be certain 15 days has now passed so expecting that one may be updated tonight. Would love it to say done deal, but suspect it may give another 15 day extension. Will be keeping an eye on it.

If the courts expect it to conclude otherwise they wouldn’t have granted the extra $10m.
We have agreed to the banks terms so I see no reason they won’t sign, hence the huge opportunity here.

Exactly, it could easily be heading up towards 35-40p even before the deal lands. 100% gain is the bare minimum I expect, nothing to say it won't be 200%.

Exactly, why would you risk trading for a 5-10% gain when you could miss out on a 100% gain.

I'm not saying you are lying mr c (& others), just whinging like babies.
We all know the 20% stake hasn't occured yet, we all know it's has taken longer than initially expected, legal processes take time, this is therefore a huge opportunity to take advantage of people's impatience.
Buy, hold, wait, profit simple as that.

@tomcat - no doubt about that part, the courts told us:
"He also informs that the PRJ clause dealing with the delivery of iron ore belonging to Geralds Metals must be observed, under penalty of non-compliance with the PRJ"

It seemed very much like the banks were willing to agree Obs check the "generic decision" 15/07/2021
"with which the Union immediately agrees"