Member Info for EV_Bull

In case anyone missed it:
https://audioboom.com/posts/8004935-kiran-morzaria-of-cadence-minerals-discusses-a-big-milestone-achievement-at-the-amapa-iron-ore-pr

Cheers, this deal has required a lot of patience but it's certainly going to have been worth it when you look at what we will own 27% of it's quite incredible.. lots to look forward to for us KDNC shareholders.

And of course the $2.5m is already in escrow ready.

Pretty much Daecon.

3) is $2.5m, the $3.5m is for the additional 7%.

KM outlined exactly this here:
https://youtu.be/wGS8xIZCqhM

miningreview.com/top-stories/glencore-in-line-for-anglo-s-amapa-iron-ore-mine/

London, England — 06 November 2012 – Leading global trader Glencore International is speculated to be one of four bidders for Anglo American’s Amapa iron ore mine, which has been judged a non-core asset by the UK-listed mining giant.
Miningmx reports that Glencore is joined by Russian steel producer Severstal, a privately-owned mining group Zamin and Australia’s Centaurus in bidding for the mine that Anglo first bought in 2008 as part of its US$5.5 billion Minas Rio acquisition.

Glencore, Severstal and Zamin declined to comment, according to Reuters. The mine is situated in northern Brazil.

Anglo, which owns 70% of Amapa, wants to focus on Minas Rio, an acquisition that has drawn the criticism from Anglo’s shareholders following cost overruns and regulatory-linked delays in commissioning.

An internal valuation put Amapa’s value at US$1.5 billion, although the price of iron ore has fallen significantly since the valuation was done, therefore the stake in Amapa would be worth less than US$1.5 billion, Reuters estimated.

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Unbelievable really

Yeah incredible really, I don't expect it to stay this cheap for long. Clearly the sellers don't know the value of what they own so best to take advantage while you can.

These are numbers I use that I consider the minimum value which I use when conducting valuation of the company, not the maximum. If they are worth so much more then it will eventually be realised and reflected in the market cap. We just need to wait and see but at 25p with the deal done this is a screaming buy more than it ever has been so I'm more optimistic than ever for the future of the company and our holdings. KM has proven he can get the job done and a huge discount on the debt which is great 45 cents on the dollar.
Either way you stack it we should be 60p-100p per share before too long.

News:
https://www.asktraders.com/analysis/cadence-minerals-kdnc-shares-soared-41-3-after-taking-control-of-the-amapa-project/

@Bannor, because I like to use conservative estimates, feel free to share your own valuation please.

I personally put Sonora at the higher end of my market cap approximation and HAS at the lower end so £20m and £5m.

If you look at an NPV8 with the net profit figure of $218.89m at todays ore prices from year 3 - 19 then the Amapa mine comes out at $1.5bn valuation.
Cadence 27% being $415m (£308m) today and £388m in 3 years time.

The £351m valuation figure I mention below based on P/E would be the potential valuation at start of production so in 2-3 years time.

I think these are good ballpark numbers as to what the project could be worth to Cadence at a relatively low Iron Ore price.

If you assign a 50% risk to those it's probably about right for where we are now.
My estimation is that the market is today valuing our share of Amapa at only 5% of it's potential value (or 95% risked as another way of putting it). As the project de-risks I expect the valuation to increase in proportion to it. Of course we have the option of realising the value in other ways if it isn't reflected by the market (e.g sale of stake, cornerstone investor etc).

No doubt the big boys will be taking a look at what we have now the deal is done.

@Degsie worth noting the market caps of HAS and BCN to help value the JVs they are £500m combined, I use a percentage of their market cap as a low (2%) / mid (5%) / high (8%) estimate of the JV value but in any case it gives a rough idea / ballpark.
BCN: £257m
HAS: £243m

Just wanted to put the share price in perspective compared to production plans as it's only a fraction of what is possible going forward.

The current mine plan would mean that the Amapá Project would produce at steady state production an estimated 4.4 Mt of 65% Fe and 0.9 Mt of 62% Fe per annum.

My rough estimates at current ore prices (not official numbers, don't take this as gospel):
$138.2/t x 4.4m = $608m $117.3x0.9 = $105m so total revenue at full production $713m (£529m) per annum. (Avg $134.5/t)
Life of mine OPEX – US$ 21 / tonne - as per June presentation
SG&A 2$/t - as per June presentation
Shipping to China $38/t (my estimate)
Capex & Loan repayments $10/t (my estimate)
Cost basis (break even): $71/t

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Profit before tax $63.5/t x 5.3m = $336.5m
Tax $22.2/t (35% tax - rough ballpark estimate)
Net Profit $41.3/t x 5.3m = $218.89m (£162.6m) x 27% = $59m to Cadence per year (£43.9m)

£43.9m with a P/E 8 = £351m valuation = £2/share (Just for Amapa)

I believe we could also achieve a premium to these prices because of the beneficiation process or for example if we switched to 67% that would be a bigger premium and less material to move.

We also have the option for 49% ownership which would almost double this number and the mine is also capable of 11mt/yr.

The BRL/USD has gone in our favour and connecting to the grid for hydro power will also save on operating costs.

I expect shipping costs to normalise at a lower rate and the "New Panamax" 100kt ships could be much cheaper than my estimates.

Ore Prices: http://www.custeel.com/en/csi.jsp
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Reasons to be cheerful indeed.

Production cuts to reduce pollution in the area Mike
https://www.miningweekly.com/article/vale-expects-iron-ore-prices-to-rise-after-winter-olympics-2021-11-30

Same, Iron Ore is on the rise too and expected to rise further after the Winter Olympics.

https://www.marketwatch.com/story/cadence-minerals-shares-soar-after-deal-for-jv-to-take-full-ownership-of-brazil-iron-ore-project-271640766405

https://ukinvestormagazine.co.uk/cadence-minerals-a-small-company-making-a-big-difference-in-amapa-brazil/

The 20% deal is signed with the banks but needs to be registered with the courts etc for the ownership to legally transfer. This part is a formality. This was detailed on Kiran’s Alan Green interview from the port.

Congratulations all, this is just the beginning, lots more good news to come.
We did say it was imminent lol.

https://polaris.brighterir.com/public/bacanora_lithium/news/rns/story/x2koj6x

https://polaris.brighterir.com/public/bacanora_lithium/news/rns/story/x2koj6x

https://www.businesswire.com/news/home/20211221005452/en/Rio-Tinto-to-acquire-Rincon-Mining-lithium-project

Rio Tinto has entered into a binding agreement to acquire the Rincon lithium project in Argentina from Rincon Mining, a company owned by funds managed by the private equity group Sentient Equity Partners, for $825 million.

Our Sonora stake ought to be worth a few quid!

The Dam was inspected on 7th Dec 2021
It has also been set to "There are open pending issues" = False (was previously True)
Another stepping stone paving the way for 27%.