Member Info for news

Mkt has now closed at 4:30pm, Thur 2019 [GGP RNS Havieron update by Newcrest]

So, one can now post closing price from HL [no longer live but historical] - to sell 2.0265p and to buy at 2.05p. Share price closed up 15.17%.

Advertised price 2p to sell and 2.06p to buy at HL.

"Newcrest tops expectations."- The Australian, Thur 25 July 2019. The Australian is the top national Australian newspaper per DL. The Australian is via a paywall.

Primorus Investments has tweeted the above and one can read the full article without a paywall.

Link: https://twitter.com/priminvestments/status/1154260155091038208

Quote:

"Newcrest farming into Havieron held by Greatland Gold, agreeing to spend $US65 million on exploration to recapture 70% of tenements it once owned outright."

"The co said it added a 3rd drilling rig at the project as it tries to firm up an economic discovery that could breathe new life into its ageing Telfer operations.2

"The drill results from the Greatland Gold JV look interesting with h i g h g r a d e s and material t h i c k n e s s suggesting better- than-anomalous levels of mineralisation [albeit at depth] near the Telfer operation."

There*s an earlier para about the results as well.

Link: https://twitter.com/proactive_UK/status/1154334741090439168

Quote:
"Conclusion: Initial drilling results from Newcrest Mining as part of the earn-in agreement with Greatland Gold have extended the d e p t h of known mineralisation at Havieron and encouraged Newcrest to d o u b l e the number of rigs operating on the property to f o u r. We look forward to future results."

Note: SP Angel also quoted the same data as Gervaise Heddle in his interview with Proactive Investors UK today, Thur 25 July 2019 eg 700m etc.

Sorry - Link: https://twitter.com/NewcrestMining/status/1154240672670474245

Primorus Investments tweet:
-------------------------------------
"Wow! First news from new Newcrest drilling at Havieron... this system is huge.

Newcrest have ordered a Third rig to site...draw your own conclusion!"

5 hrs ago, Thur 25 July 2019
https://twitter.com/priminvestments/status/1154251522844307456

Note: Primorus later corrected the above to 4th rig.

Newcrest tweeted relating to Havieron, Paterson, Western Australia, 6 hrs ago, Thur 25 July 2019 with picture entitled Havieron:

"Our Farm-In-Agreement with @Greatland Gold has confirmed the presence of a higher- grade copper-gold mineralisation from our first drills with the Havieron project." Embedded is the Newcrest Qtr results from last night mentioning Havieron.

I was just going to say, ask tom-14.

Well, Bannor, there*s your answer from tom-14*s link at 19:22. As soon as the news came out on Twitter, I had already seen it.

So, there*s your own figures, Gangfeng [early stage and Gangfeng did say that if they choose to buy a further stake, they will have to pay market value [para phrase] at the time. I also will have to relate what many expressed about this deal. BCN had been looking for funders for some time. So, whoever introduced the JV partner, one is not sure if it was the investment bankers etc. So, let*s say that if the JV partner had not stepped in, there would have been more delays and the rest of it. So, this situation was such that the JV partner was needed ? Therefore....

I have learnt something from this weekend of conversation and discussion. In terms of crowd theory, I am now cognisant that what the reports say is accurate ie what people are looking for in stocks?

I decided to look as I was aware that it is good to see another view.

Thank you all.

Sun 21 July 2019

I was aware of the aspect of the size.

However, in terms of size, it would depend on the production quota. One cannot use up all the resource at one go.

I am also aware of the timing aspect, hence I qualifed the M & A was, as at 28 Jun 2019 [as at: accounting term]

In terms of standard M & A, I did say it is a rough idea. This again is not my methodology but one that is used to gain some idea only.

I give the example of ARS*s 1 project in Indo wherein the analyst pointed out the potential sale price of another similar project in Indo ie Indo M & A. No two projects are exactly the same.

In the case of say, Solgold, the investment house/s use the recent take-out price in the copper industry. Again, it cannot be exactly similar in terms of location and discount etc. However, they boil it down to X price per ounce. Again, M & A standard methology. Otherwise, there is no benchmarking examples?

I am aware that your figures as I have read your post on it.

However, one has to be aware that figures need to have methodology that has a market valuation. When REM offered £1 for BCN, it was not plucked out of the air. One is cognisant that the Founder consulted and may have undertaken a formal or informal valuation report to be carried out.

Again, for the party target, it also resembles with a margin of variance to a project that is undergoing development. Again, it may have a informal valuation or one that is market led.

The lithmus test is: if one is a holder of size, one can commission a specialist short report on the Sonora project Stage 2. I know that on Twitter, some of these 5-7% holders do consult with either geologists or whatever specialisms are needed.

On one gold exploration co, one blogger said that proper people had done the sums. We didnt know who but it turned out to be a Sprotts Report. They are licenced I believe in Canada.

I did not bring up this aspect in my original post but Degsie did say the JV has value surely [para phrase].

This is an open discussion. So, it is open to all views.

However, many may now be cognisant that the Gilby Report on another forum way so way out that no analyst or investment house would have approved of.

That is where we need to be a bit more careful. So, the conservative is on the safe side. When the project is up and running and if, into profit, that is a different matter.

In the case of SXX, analyst have pre-production and post production target figures including revenue/profit valuations.

I trust this explains matters.

I am not going to be around as this topic has run its course. The future or near future will be dependent on the KDNC RNS.

With thanks.

Sun, 21 July 2019
I am usually on Twitter.

observer842
From what I understand, this lithium pricing is the aspect that banks did not like in the main.

I have not looked at this aspect because the 1st stage mine will last for 18 years from recall unless they decide to up the production tonnage etc.

If they do up production and it takes in KDNC*s JV, in part or in whole say, then, does it also not mean that BCN will ask KDNC for a proportion[30% JV] of the additional capex needed?

Do they [KDNC] intend to SELL the 30% JV and is there a market for it sometime in the future when the mine is up and running as a hypothesis?

This is the same for Yangibana, the other JV with Hastings Metals Tech.

If they want to sell at a suitable time when the mine is half way or nearing a new decision to up production or new production [after the Stage 1 is nearing the peak?], will they embark from investment co to a potential production co? If so, say, then KDNC will no longer be valued on a mark-to-market basis anymore but more for the potential revenue [or not] and profit in whatever project that will be?

BACANORA
----------------
On 28 June 2019, the BCN RNS ["Investment & Off-take] stated that Ganfeng will buy 22.5% at project level in the Sonora holding co for £7, 563,649 [£7.563 million].

This is the M & A news. So, if, say we apply this [hypothesis] to the 30% JV, then simple maths will say 22.5%=£7.563m, then how much will 30% JV be? Answer: £10.08 million as at 28 June 2019. Gives us some idea of what the open market is doing? Caveat: Not to be taken for consideration as value attributable to KDNC at this current time or thereafter as this is not in the bag. Also, to consider is production at Stage 2 etc.

What the Founder said recently has got me rather intrigued but I did not want to ask him. So, any thoughts on that? I am not going to repeat it.

As for the Sonora BFS, maybe Obs should run it through Kiran who will ask the other director who is an accountant. KDNC will have more info on lithium pricing which is usually the sticky point. That way, we may know more.

With thanks. Rec.

I think that over this weekend [mkt closed] we have covered almost everything known possibly from public info. The mark-to-market is simple maths and does n o t involve any interpretation.

Yes Degsie - Obs has gone through that before.

For the avoidance of doubt:
Lastly, I would like to mention that due to the disaster at 88e [history now], one particular blogger on Twitter has had a call from the FCA? I have heard of another as well. The the case of 88e, I recall that the cost on the Slope is known to be high then at US$40. Well, this chap cited a very much lower cost etc and so forth.

One can say that this chap, not being being employed as an analyst in a big investment house may not be aware that all analysts will have on the ground info on that and they can check with the majors operating on the North Slope to check.

So, going on what KDNC has said, the Amapa iron project could bring in $25m a/c to Kiran Mozaria [CEO of KDNC] in a recent interview with Justin Waite [please check]. Mr Mozaria did not exemplify whether this is net or gross profit but I assume gross? You can ask the CEO and check again with him.

Hence, I said that this is the cash flow project per KDNC RNS. The $25m figure has not mentioned in an RNS if I recall. Anything outside an RNS or at a party cannot be said to be regulatory news just in case people are not aware.

With thanks. That*s all from me. I just wanted to clarify about the legacy of Sonora which was the subject of so much.... even on Twitter.

Its a new beginning, post Sonora now.

P.S.

The Founder has once mentioned about short positions. Whether that is now current, I do not know. I notice that at times of positive significant news, there appears to be no problem buying any large no of shares. I used to wonder if these are the synthetic shares of which the market is allowed to issue up to 10%? Please check with others.

I am careful when I post on this forum especially given the legacy issue of those who bought later than 0.04p in REM with a low mkt cap of £1m+ when they embarked on the Sonora lithium project [now KDNC] In order that none of us are said to be positive without numbers etc, one has to present the picture from various views. Then the readers cannot say that anyone of us did not say or spell out only what is in our knowledge or what is public information.

I posted earlier ONLY on legacy events which are historical.

That concludes the position as we all know it?
Sun 21 July 2019

Here are my thoughts on what has been posted this morning:
KDNC share price 0.10p with a market cap of £11 million, Fri 19.7.19.

Composition of Listed Investments: Per Degsie @9:15am, Sun 21 July 2019
EMH : £6.8m if 20% or [£6.46m if 19% - my understanding from this forum]
BCN : 1.7% =£1m
MMS: 10% = £1m
----------------------------
Investment in Greenland [only 1 licence now per Obs] -100%
Argentina
Australia - 3 projects
Auroch
Clancy
----------------------------------------------------------------
JV*s with Hastings Metals Tech of Australia [Rare Earths] & Bacanora [not the 1st stage and per Obs, it will be 8 years before they come to REM*s [now KDNC] JV area [Ref: Sonora] . Please check with Obs as that is his view ]. However, Phase 1 is for 18 years. The Founder said that it is structured such they can sell the stake to an outsider? However, please check again if correct re:legals.

I understand that Kiran Mozaria has said that the market makers or market will not re-value the JV*s into the share price now as they are not listed securities as such. Please check with others on this forum or Mr Mozaria again.

My Comment:
Yes, if EMH*s mkt cap equals to say what the market is prepared to give to BCN [hypothesis], then the mkt cap goes from £34m currently to £58m [BCN*s mkt cap currently], then even at 19% = £11.02 million.

£11.02m [EMH] + £1m [BCN] + £1m [MMS]= £13.02m MINUS £3m Loan= £10.02m.

One has to also remember that when KDNC sold down the BCN stake from the 20% mark, it brought the share price of BCN downwards and ended at a low of 20p. Some may be others selling but one can large % stake selling puts pressure so it cannot be released to mkt at one go and needs fresh buying .
---------------------------------------------------------------------------------------------
Summary:
£11 million market cap vs £8.8 million [listed mark to market securities] minus £3m Loan = £5.8 million [Net value] So the market is giving AN EXTRA £5.2 million in what appears to be a PREMIUM?

IVY
I also agree with Ivy that as norm that once the share issuance has been absorbed, that would help if there is fresh buying. Larry Wildman used to tell us how much more shares still to be absorbed etc.

My conclusion:
Amapa is the more immediate cash flow generative project as KDNC has said?
The rest: Australia 3 projects[Picasso is near Baldhill so can they start a new mine which needs £ to drill + technicals like PFS? , Greenland [KDNC said they are awaiting dev at GGG] & Argentine [?]. This can be asked of the co or await the next financial report.

DYOR. I have ticked recommend for Degsie*s & Ivy*s post with thanks. If anything is incorrect, just correct.

Sorry, I forgot that Bacanora was still Canadian listed then and therefore the t/o rules do not require 29.95%?

P.S.

Bacanora and Lithium Americas have Ganfeng, the largest Chinese co as their JV partner.

One last point in this story to complete the picture.

Lithium Americas share price on Fri, 19 July 2019 was C$5.12 with a market cap of C$456.74.
52 week high C$6.69 and low $3.74. In terms of £, the market cap is £268.6 million.

Lithium Americas is the other co that has Ganfeng as the Joint Venture partner. The mine is being built. Latin Americas is a bit more advanced than Nemaska at mkt cap £152 million in the game. Nemaska*s position is more akin to Bacanora [KDNC investee co & JV]. However, there is a disconnection between the valuation that London is prepared to attribute. Bacanora at £54 million is so far behind Nemaska by a factor of £54m vs £152m.

Mind you, from the articles on Nemaska and the 38%+ jump in the share price, the agreement is only an LOI [Letter of Intent].

Suffice to say, Lithium Americas, also a Canadian co with Nemaska are more highly valued than Bacanora or even EMH [KDNC*s investee co*s].

So, had REM been successful with the takeover of BCN at a full price of £1 [VSA valuation even today gives a target price of £1.10 from recall] ie fair value, then the process of funding would have been much earlier.

If one looks at the funding requirements of Nemaska, EMH and Bacanora in £, one can tell roughly how big these projects are. Same with Lithium Americas. I would need to pour over details on the resource so I find funding capex a good guide only for myself as a quick check.

One can see from the Lithium Americas*s mkt cap of £268.6 million, the mkt cap of REM at £95million [high of 2.25p] appeared to be a fair value at the time when lithium had not received the MS comments yet.

I recall REM had some 20% of BCN and therefore to collect the next 9.95% is not a large challenge? From some of the holdings of some institutions etc, some would have been prepared to sell out rather than to wait as is the norm?

So, the target 5p mentioned from what I understand would merely represent some £ 211 million if they had then gone on to obtain funding [prior to the banks shutting shop later] , one can see that live mkt caps of Lithium Americas is already at £268.6 million. Whatever the potential target price mentioned, one has to check against the real time market values to test reasonableness.

This is history now. So, KDNC like norm has to start all over again.

Sat 20 July 2019 at 6.45pm.

Sorry, not sure why when I type a word like more, it comes out move etc?

tomcat-14
My word, last Mon [15 July 2019 at 13:07] per your KDNC link stated that Trafalgar Trading Fund Inc took a 9.07% stake in KDNC!

This TR1 KDNC said RNS stated that the previous holding was 0. So, this stake is 1 jump to 9.07%.

Trafalgar Trading Fund Inc is a "hedge fund operated by Trafalgar Capital Management [HK] Ltd & has approximately $250 million in assets." Link:
https://privatefunddata.com/private-funds/trafalgar-trading-fund-inc/

Trafalgar Fund
--------------------
"Employs global long/short investment strategies, mainly focusing on Asian equities." [Source: Trust Offshort. net]

My Comment:
Thanks tomcat-14: I missed this RNS as I usually check via Twitter.
Interesting given that the Amapa deal is with a Singapore private equity firm.
So, looks as if either KDNC Chairman/CEO or Founder have now move contacts within the Asian community in HK & Singapore. It also says that Trafalgar is a boutigque investment management firm based in HK with affiate offices in London.

Unlike ordinary investors, they, like the renowned Sprotts go only on this methodology etc in the main ie Valuation Models. My own methodology is far more stringent in that if the sky falls down, I still can hang on to my $1. For that reason, I also follow the standard method of doing a re-evaluation at different inflection points as per the industry ie big change that could affect a stock up or down ie re-rate or de-rate.

With thanks. I will have to try to rework or work harder on the assets of KDNC to see how the Tranfalgar hedge fund is entering at this stage to either go short term or longer term. Of course, they are not telling. Its their bread and butter - wrong evaluation and potential valuation model = 0 profit, minus of + profit.

So, in summary, if REM had 20% approximately say of BCN & EMH at average mkt cap of £100million, then REM*s stake would come to £40 million [Mark-to-Market is real time exit sale]. This is for illustration.

So, today at 0.105p, KDNC*s mkt cap is £11 million having whittled the BCN stake to some 2% from recall. Big difference.

So, what happened? Old-timers will know about the MS comments. So, the delay and timing meant that BCN did not come on stream earlier and got caught up in the funding event that ensured.

Both the BCN & Nemaska funding events does show that it may no longer be banks that will finance the lithium sector but rather lithium processors & private equity.

Suffice to say, they also say to expect the unexpected. Who knows what if BCN had just made the window before the funding tightness event?

So, the market in attributing £95m to REM at the time did give what appeared to be a fuller value. It is regrettable over what happened but that is one investors will never know what happened between his Lordship and ?. Post his Lordship, the trust sold down their stake from recall [please correct if not correct] and therefore, his Lordship*s trust may not have realised what could be a fuller value if the project was faster tracked than the delay later over funding etc.

Only an observation here since I do not attend the London REM-KDNC AGM*s or London meets.

Last night, Nemaska released news and the news agencies carried the stories:
1) "Pallinghurst Group backs Nemaska Lithium mine in Quebec."-FT, 18 hrs ago, Sat, 20 July 2019.

2)"Nemaska Lithium announces CAD $600m equity investment proposal from the.."-Global Newswire, 19 hrs ago.

3)"Lithium Junior soars on Financial LOI."-Small Cap Power, 17 hrs ago.

Nemaska share price rose to C30c + 38.64% on potential funding news. The market cap is C$258.53million. 52 wk high C94c and low C22c. [Source: Google Finance Nemaska share price].

In £, the market cap of Nemaska is £152 million [assuming £1 = C$1.7]

My Comment:
KDNC*s investee co, Bacanora Minerals received the fundings news before Nemaska [two major lithium projects earlier waiting for funding news]. Yet, BCN despite rising from 20p to 43p [over time] has a mkt cap of £58 million [VSA target price £1+]. VSA *s target price of £1 would give BCN a M a r k e t C a p of £134 million.

KDNC*s other investee co, EMH has a market cap of £34 million at 23p despite a 16 July 2019 RNS relating to "Funding agreement and potential."

So, one can observe the disconnect between the real-time mkt cap for Nemaska at £152 million vs £58 million for BCN.

At the time of the original REM [2.25p], the market attributed a market cap of £95m for the Sonora project which REM was involved in.

It does make a difference for an investment co like KDNC to hold higher market cap ratings as KDNC once held a near 20% [approx] from recall in both BCN & EMH.

I like to provide some backup for what I said on KDNC.pl.

All history now. Hence, for this reason perhaps, KDNC has now moved on to its own project in Amapa which could potentially provide the co with more liquid earnings.

Just a discussion. If any errors kindly correct. Please check. Google the titles if interested.

On-topic as it is lithium industry news about critical funding inflection.

Sat, 20 July 2019
Rushing off so not editing.

I will end with I have no views on KDNC, either buy or sell.

Why? Amapa is the project they really need for $$ and if all goes well [no port accident like during the Anglo time], then it provides some breathing space.

To get to fireworks, like all stocks, it would need a big wild-card ie big project within the portfolio or an exit event for the unlisted stock.

These days, the Founder of REM is no longer providing commentary and therefore, hard to know.

As Barksy1 said, I am merely filling in the puzzle from the past.

That*s all from me at the momo. With thanks.