Member Info for EV_Bull

@mrc time to dust off your calculator because it makes sense economically for them to do it if they don't get beyond 75% of BCN. Ganfeng would then own more of the profit and BCN less, they could also avoid the royalty areas and save even more... think about it.

e.g......
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So buy out the KDNC 30% stake, Ganfeng already own the other 35% and then BCN only have 35% interest of which Ganfeng own 57% of already so they would have then an 85% interest in the concession instead of 78.5% as it stands currently.

Assuming the price paid to Cadence was below the 6.5% of NPV it would be worth it to them to do it this way. i.e below $81m at $1.2bn, although NPV is much higher at this point especially with expansion so could be double this number.

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These were all granted in 2010 so perhaps are the four
La Ventana 875 ha 22-Jan-10
El Sauz 1,025 ha 22-Jan-10
Buenavista 649 ha 22-May-10
San Gabriel 1,500 ha 12-Mar-10
(4049 total)
The one other was still being staked so possibly
La Ventana_1 945 ha 10-Jul-14

So potentially Fleur and Fleur_1 and El Sauz 1 & 2 do not have claims on them.
https://www.bacanoralithium.com/pdfs/Bacanora-FS-Technical-Report-25-01-2018.pdf
Page 36 (22)

Thanks, I've seen the case, it seems to cover some of the JV concessions but not all as it mentions in the case "approximately 4,550 hectares" across 5 claims so not all claims have a royalty, but it's not exactly clear to me. It could be beneficial to them to mine in a different location (in the JV area) to avoid the royalty, given it's a 250yr resource.

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[22] “Assets” is a defined term in the LOI and includes, pursuant to Schedule “A” of that agreement, four existing “lithium claim titles” in Sonora, Mexico in relation to four specified parcels of land, and one “pending lithium claim title” on lands still to be staked in Sonora. The total area of land covered by the lithium claims measures approximately 4,550 hectares.
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https://www.bacanoralithium.com/pdfs/Bacanora-FS-Technical-Report-25-01-2018.pdf
Page 34 (20)

The licence holding by the Company forms a continuous coverage over the Project area of 8,154 ha. This is illustrated in Figure 4.3.3 and Figure 4.3.4. La Ventana and La Ventana 1, covering approximately 1,820 ha. The five concessions El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 cover approximately 6,334 ha in total.

With sizes and date granted listed on page 36 (22)

If anyone knows for sure it would be useful.

Execution of Extrajudicial Title
"make conclusions for extinction, as per r. decision of fl. 244."

With the £20m figure which is a low ball estimate I am trying to highlight how undervalued this is, hence the opportunity.
If you think it's worth multiples of £20m then even better for us and you should be getting yourself in.
It is simply a finger in the air number that highlights even if we got as little as £20m then KDNC is still extremely cheap at our current market cap.

Look at the market cap here Dee - £32m

We have circa £15m in Equities (mostly EMH) + £20m (or more) for Sonora

We're already above our market cap before you consider you then get the Amapa Mine for free! (with 27% having potential to be worth £132m)

No, simply the maths stack up for GFL to do what I proposed, if they don't get above the 75%.

I also found the legal case in Canada which details the royalty situation, so the royalty does appear to cover the main claims (approximately 4,550 hectares).
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[21] While earlier, undated, versions of the Letter Agreement between Mr. Torres and Bacanora (being the parties to the LOI) referenced slightly different versions of the overriding royalty, its final version was included in the July 21, 2010 LOI. Pursuant to paragraph 5 of the LOI:

Each of the Vendor [Torres] and Bacanora acknowledge [sic] agree that a 3% royalty is payable to Colin Orr-Ewing on all production of lithium from the Assets and that they will serve him with not less than sixty (60) days notice if they intend to relinquish ownership of any of the Assets.

[22] “Assets” is a defined term in the LOI and includes, pursuant to Schedule “A” of that agreement, four existing “lithium claim titles” in Sonora, Mexico in relation to four specified parcels of land, and one “pending lithium claim title” on lands still to be staked in Sonora. The total area of land covered by the lithium claims measures approximately 4,550 hectares.

Thanks @Dallasdaz

Is it also correct that the COE royalty doesn’t apply to the JV concessions? making it even more appealing for Ganfeng.

Is it also correct that the COE royalty doesn’t apply to the JV concessions? making it even more appealing for Ganfeng.

Not so much a favour, just what is economically best for Ganfeng.
They seem to have purchased land further south recently 9000 hectares as it's flatter land for building the plant on as access is from the south you'd think the southern tenements would be of interest. Just putting it out there that's all.

I posted this on BCN but thought it would be of interest here.....

Have any of you thought about a scenario where now Ganfeng have control (~57%) they could buy the JV areas from KDNC and change the mine plan to be in the El Sauz - Fleur region which BCN would own less of?

This could make the KDNC JV more valuable to Ganfeng if they don't get to 100% of BCN.

So buy out the KDNC 30% stake, Ganfeng already own the other 35% and then BCN only have 35% interest of which Ganfeng own 57% of already so they would have then an 85% interest in the concession instead of 78.5% as it stands currently.

Assuming the price paid to Cadence was below the 6.5% of NPV it would be worth it to them to do it this way. i.e below $81m at $1.2bn, although NPV is much higher at this point especially with expansion so could be double this number.

See previous scoping study:
"US$2 Billion NPV Valuation of El Sauz and Fleur Lithium Project, Mexico." (22 December 2014)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=1367479

"The NPV is achieved with a constrained optimised pit shell of an average of 69,800 tonnes of lithium carbonate per annum over an initial 20-year mine life, with an average of 75,600 tonnes of lithium carbonate per annum between years 2-19."

Have any of you thought about a scenario where now Ganfeng have control (~57%) they could buy the JV areas from KDNC and change the mine plan to be in the El Sauz - Fleur region which BCN would own less of?

So buy out the KDNC 30% stake, Ganfeng already own the other 35% and then BCN only have 35% interest of which Ganfeng own 57% of already so they would have then an 85% interest in the concession instead of 78.5% as it stands currently.

Assuming the price paid to Cadence was below the 6.5% of NPV it would be worth it to them to do it this way. i.e below $81m at $1.2bn, although NPV is much higher at this point especially with expansion so could be double this number.

See previous scoping study:
"US$2 Billion NPV Valuation of El Sauz and Fleur Lithium Project, Mexico." (22 December 2014)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=1367479

"The NPV is achieved with a constrained optimised pit shell of an average of 69,800 tonnes of lithium carbonate per annum over an initial 20-year mine life, with an average of 75,600 tonnes of lithium carbonate per annum between years 2-19."

https://qz.com/2087345/chinas-lithium-mining-battery-firms-are-in-an-investment-frenzy/

Buyouts are always at a premium to the current price, that is how it works and regardless a low offer would not be accepted, BCN was different because Ganfeng already owned 30% and only needed M&G and directors to accept, I very much doubt our directors would recommend a low ball offer, nonetheless the interest would wake up the market.

I think TJ_MAC is mostly correct and we will re-rate once the 20% is signed for. Hopefully any day now.

Not often we agree MrC..... but we certainly do on BorderBob since he appeared when the takeover first struck.
He certainly stands to gain from the deal going through.

Perhaps you are right, is the conclusion therefore that Ganfeng will want to attempt to buy out KDNC instead of just buying the JV off us? Especially if the JV is worth more to them than our entire market cap currently (after accounting for EMH).
We know the Chinese like Brazilian Iron Ore too.

@iamrich maybe this:
https://www.cityam.com/breaking-london-stock-exchange-experiencing-technical-issues-market-data-not-available/

Also of interest:
https://www.cityam.com/exclusive-lses-aim-sub-market-sees-its-biggest-growth-in-15-years/

Kiran was also looking at options for producing 67% high grade ore, this is likely to be in much higher demand and attracts a good premium.

High-grade iron ore supply to struggle to meet demand as China decarbonizes
https://www.spglobal.com/platts/en/market-insights/latest-news/metals/060821-high-grade-iron-ore-supply-to-struggle-to-meet-demand-as-china-decarbonizes-mi

Champion Iron are doing something similar - worth a watch
https://www.reddit.com/r/CadenceMinerals/comments/qsm2mq/amapa_project_following_a_similar_path_to/

Champion Iron has a market cap £1.2bn producing 8mt high grade expanding to 15mt.
Amapa is capable of up to 11mt/yr according to the local press and Anglo produced 6mt from it. There is huge potential there.

Anglo-Australian mining giants BHP Group and Rio Tinto cut iron ore production in the third quarter, hit by a worker shortage
https://www.smh.com.au/business/companies/rio-tinto-cuts-iron-ore-shipments-target-amid-worker-shortage-20211015-p5908f.html
https://asia.nikkei.com/Business/Markets/Commodities/Australia-iron-ore-output-dips-as-COVID-restrictions-crimp-labor

Yes it's very important @jimb2 it takes years to qualify materials for use in batteries.

I would say they at least have room to double or treble their current plans and they certainly have room for that.
Oh and they also have purchased 9,000 Hectares of land at "Las Perdices"..... this looks to also be in our Fleur JV concession area and is certainly nearer the JV areas than La Ventana.
https://mapcarta.com/20288016

https://polaris.brighterir.com/public/bacanora_lithium/news/rns/story/xq70y7w
"In addition, the Company has purchased the Las Perdices land package, located directly south of the existing areas previously purchased in 2019. These additional 9,000 hectares will provide the Company with greater access to flatter land, ensuring reduced earthwork costs alongside vital emergency access. The borefield test wells have also been finalised, and the extraction well design is underway. Work will commence in Q3 2021 on the borefield to initially support the Project construction stages and subsequently, the lithium processing operations. "