Member Info for EV_Bull

The question is answered here:
https://youtu.be/KMXHY5nn-sU?t=282
He doesn't want to hold the sword of Damocles over it.

The Court has been on shorter hours "the special end-of-year recess shift" (12/18/21 to 6/1/22) so back to full speed since Friday.
https://www.tjsp.jus.br/Noticias/Noticia?codigoNoticia=79220

I expect things to start moving in earnest in the next week or so.
This should easily be 40p+ in short order, perhaps once the courts have made it all official but I wouldn't be surprised to see it nudging up before then.

What’s your point, add in that they already owned a third of BCN and then double it because they already owned 50% of the project? The effective value of The sonora project is much higher than your numbers. $700m or so plus the KDNC bit.

The reality is Ganfeng has a Market Cap of $28.041B they recently raised $630m and have a 3 year contract with Tesla
They are paying $391m for Bacanora. Finding $50m won't be a problem to own the entire thing.

https://www.reuters.com/article/ganfeng-lithium-placement-idINL2N2NS3BJ
https://www.mining.com/bacanora-lithium-accepts-ganfengs-391-million-takeover-offer/

I'd suggest you submit that one to Kiran @dallas but that seems a bit pessimistic to jump to worst case scenarios.

I'm sure because the concessions are owned by Mexilit and we own 30% of that.
Description:
Mexilit S.A. de C.V. is a subsidiary of Bacanora (70% interest) and Cadence (30%). The company is the owner of El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 mineral concessions, located in Sonora state. The properties are part of Sonora Lithium Project, a group of ten concessions covering 97,389ha located at northeast of Hermosillo. Mexilit was established in 2013 and its headquarters are based in Hermosillo.

Mexilit holds the mining license, neither side can mine it without an agreement so it works both ways. There is no 70/30 land split it's all within Mexilit.

No, the video predates the BCN offer.

https://youtu.be/mGhDQjFgP7k?t=969
"WHI Place unrisked values on KDNC's shares of JVs - Sonora £21.5m and Yangibana £12m. What rights does KDNC have that will enable it to achieve these values? I find it difficult to believe that KDNC would have entered into JVs without some way of realising value?

Sorry Dallas that is simply not how it works, there is no such thing a "their 70%" it is one and the same, they can't mine it without a mining JV agreement.

I think you may be misunderstanding how JVs work Dallas, we own 30% of anything that comes out of that entire area.

Sonora Project Update

Lithium process plant engineering, from the Ganfeng team in Xinyu, is aiming for long lead items to be ordered for delivery to Sonora in late 2022 and early 2023. In addition, Ganfeng is reviewing a lithium plant production rate above the previously planned 17,500 tonnes per year.

Earthworks surveys and geotechnical testwork are ongoing within the plant site area where surface vegetation and topsoil were rescued and removed. In addition, the Company has acquired an additional 500 hectares of land at the eastern end of the plant site location to allow for future plant expansions.
https://polaris.brighterir.com/public/bacanora_lithium/news/rns/story/xz95dlr

Ganfeng Interim Report 2021

“The Company will further accelerate the construction of the Mexico Sonora lithium clay project, endeavouring to make it a leading project in the field of extraction of lithium from clay across the globe.”

https://www1.hkexnews.hk/listedco/listconews/sehk/2021/0924/2021092400651.pdf

In any case, here is your chance to ask the question
https://twitter.com/cadenceminerals/status/1478629252031557636?s=21

It works both ways Dallas, they have bought 500 hectares in our JV area for "future expansion" if they want to make it 80ktpa for example they will want our areas sooner making them more valuable, no point accepting a silly offer, may as well wait in that scenario to call their bluff.

@Twohits I personally would be ecstatic with £50m to fund 49% of Amapa, £20m is what I think about it.

https://www.reddit.com/r/CadenceMinerals/comments/rugni1/due_diligence_lsekdnc_cadence_minerals/

Sonora Lithium Project JV (Ganfeng a multi-billion lithium major buying Bacanora Lithium for £285m)
Cadence Minerals has 30% ownership of a large part of the Sonora Lithium project in Mexico. A huge Lithium deposit that once had interest from none other than Tesla, Ganfeng (a supplier of Tesla) are currently undertaking a buyout of Bacanora Lithium (LSE:BCN) which held 50% of the initial tenements to be mined (Named La Ventana 1 and 2). Cadence owns 30% of the "El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions" which are due to be mined from year 9 of the 19 year plan with a total of 12% of the mining from this area. Given the lithium price boom it is likely that Ganfeng will want to accelerate the project and increase the production rates shortening this timeline. In my view it is highly likely that once the Bacanora Lithium deal closes Ganfeng will want to buy the 30% Cadence owns soon after to take 100% of the project. This likelihood has been further enhanced by the recent news that Mexico will no longer allow private companies to be granted lithium mining leases this is not expected to affect the Sonora project giving it an almost monopoly status among private lithium projects there and increasing its value. It is unclear exactly how much Ganfeng would be willing to pay for this asset but my personal bare minimum conservative estimate is at least £20m and could be significantly more and it probably is worth a lot more (maybe even more the entire market cap of Cadence) this makes a buyout offer from Ganfeng possible in my opinion. Ganfeng have recently bought up additional land and also commented in their annual report about accelerating development of the mine

That's the point, the 200 year LOM includes the KDNC areas La Ventana is not 200 years and it's only a tiny fraction of the resource, hence why after year 9 they NEED to mine the KDNC JV areas and hence the potential value to KDNC.
Hence if Ganfeng go above 35ktpa or accelerate production then it will be NEEDED much sooner.
I expect Ganfeng will buy it from us way before they need to because when they do, it will be much more valuable and cost them a lot more (especially if they were planning 80ktpa for example.

I would just add that Bradda Lithium is valued at £28m and they don’t have a mine being built or a multi billion partner etc if that gives some idea of what the market could be missing.
KM hasn’t helped investors put a value on it because it depends on a lot of factors. Would be interested to know what the analysts e.g WHI think post Ganfeng buyout at current prices.

I’ll stick with my crude numbers for now as I don’t have time to work it out properly this weekend but I expect it may surprise the market when a deal is done as it doesn’t appear to be valuing this properly.
Hopefully the value will be realised soon as O say, we know Ganfeng have deep pockets.

12% of the Mine Plan is attributable to the JV area and to be mined from year 9 I believe and we own 30% so equates to 4% of the 19 year mine life.
Detailed in the technical reports:
https://bacanoralithium.com/investors/documents/technical_reports
https://www.cadenceminerals.com/wp-content/uploads/2020/06/Bacanora-FS-Technical-Report-25-01-2018.pdf
and here:
https://www.cadenceminerals.com/projects/sonora-lithium-project/
"The Mineral Reserves contained within Cadence’s joint venture with Bacanora is scheduled to mined (under the feasibility published in 2018) in years 9 to 19. Further details of the planned mining schedule can be found on pages 137-139 of the Feasibility Study"
We know Ganfeng are accelerating plans and planning for expansion of the conversion plant already.

Thanks @Observer, have you tried any NPV8 calculations based on the current mine plan (or any alternative scenario) I would imagine it's over $200m at the current lithium price with no expansion? (crude guess)
With expansion and JV needed sooner then I'm guessing over $1b.

Just to say £20m is a very crude / cursory number I generated by taking 8% of BCN market cap which owns 50% of the LV of therefore roughly equating to 4% of the project which would be our share of the current mine plan. I know it is likely worth more as I have said below.

I agree Bannor in the current market with lithium off the charts and hitting new highs every day it is worth a lot more than £20m but that certainly isn't factored in to do our share price. The other thing to factor in I suppose is would an offtaker like Hanwa be interested, KM has said the way to unlock value will be via Ganfeng though and I expect a deal to be done there in the coming months. It does tie in nicely with our other assets getting closer to production.

My numbers are conservative and designed to illustrate even if we achieved low ball values akin to a fire sale then we are still worth multiples of the current share price.