Member Info for nomadicinvestor

Peter Secker (and Ganfeng) have confirmed they have no interest in buying out Sonora. Politically the company needs to be seen as Mexican (even if British/ Canadian). China won’t be allowed to go round operating mines, they need BCN. BCN have built up great relationships with local and national politicians, leaders and businessman. Not to forget the local population. I’m under no doubt Ganfeng will be pulling all the strings and controlling the operations but that’s as far as is will go. Also Ganfeng clearly wouldn’t want BCN to sell their half to anyone else. We will be a producing minor and I’m happy with that, don’t want or need a buyout as an end game.

Ganfeng won’t buy the other 50%.

SP hitting 58p this morning, have to go back about 28 months since BCN last saw this number. Glad I hung in, averaged down and ignored the vitriol often shared on here and Twitter. Now approaching the mcap and place where more higher net worth investors with less appetite for risk will come on board.

Excited to see what will happen here when financing is announced. Although I've been invested for exactly 6 years, this feels like the start of something.

TheHickster - same. No idea how oil can be trading 20% higher than a couple months ago yet it has no impact on the value of our 9200 barrels per day. None of which have been hedged and I3e will see instant increase in revenue. Oil is over 100% up since I3e purchased the assets...

Market moves money from impatient to the patient. Often used on aim but feels relevant here.

Sonora should be in the sweet spot of not being environmentally damaging like the cheap South American brines but still cheaper than Australian (or other) hard rock. The process of extracting lithium through brines is really quite absurd given the length of time and shear area required.

Secker used to be very open that he felt if you concentrate on the asset the PR and SP will follow. He’s probably right but it’s not good for shareholders. Getting new investors on board all the time should be one of the companies priorities. His focus is purely on institutions I feel.

I guess next year when the news flow starts then BCN will up their game.

Great spot and interesting video. All the presentation was in Chinese which is also interesting. Maybe see some of that PI money come in here when things push forward.

Looks like 25k phase 1 on the cards which is amazing news if comes true. That’s 42% additional product. Or a revenue increase from $192m to $275m (assuming $11k tonne). Assuming the cost of mine isn’t significantly more expensive, the IRR should increase.

Thank you for sharing, hadn’t seen this. So it definitely seems like the 1st phase will be 25k, with phase 2 as 50k. Thought it was interesting on the finance front with the remaining equity sounding agreed with new UK and USA backers. To be confirmed Q1. Will be a very busy and company changing couple of months ahead.

In fairness to the board, the Mirabaud report (on website and linked in a post below) has all the information. It has projections based on next few years and oil going up $5 annually. I had previously read it but clearly didn’t take it all in but the numbers are there. They state the increase in oil has in q4 2020 added $5m cash and will cover dividend. How this hasn’t translated into sp is beyond me.

2021 is Calculated at $45 Brent, returns $17m fcf.

Thanks Nickderby, a silly one on my part. Numbers make sense now when 60% is at that low figure. Still encouraging field net back if current prices Hang around.

No matter the calculation the numbers just don’t add up for me. Take Toscana - Operational Update RNS “Average production in 2019 was 1,065 boepd which generated CAD$5.5 million (c.US$4mm) in Field Netback“. Okay so per barrel (4m/1065/365) is roughly 10 dollars net back. WTI averaged 57 in 2019, Canada sells at discount of around 3 dollars so should of received $54 a barrel. That would put operating costs at $44, way higher than announced. This figure would make more sense as Toscana could not service debt on those numbers.

I’ve done these types of calcs for other numbers in the Canada assets and get similarly confusing results. In other companies the calculations (however basic mine are) usually stack up pretty tight. I’m convinced this is why we are where we are as any NEW investor analysing this wouldn’t touch it. We must be missing something... it would be good for the board to clear up.

I’m fairly over bought in I3e thanks to some major averaging down. Tempted to buy some more after last nights presentation. I got the impression the farm out is very likely - the comment “terms are being negotiated and it’s with the lawyers” suggests that it’s the finer details to be closed (we know farm outs are extremely complex contracts).

I think we have a very unique set of circumstances that have led to an undervalued company. Covid, the previous drilling campaign, buying gain/ toscanna at unbelievably low metrics, price of oil rising, zero to over 9k production, potential paid for North Sea drilling campaign, 10% dividends, etc etc. I think many investors will take the stand “if it’s too good to be true...” The risk here was high operating costs and oil languishing around lows - neither appear to have happened. Hopefully farm out news Followed by dividend will change sentiment for a positive 2021.

Olderandwiser - I have the exact same query and put it to Majid last night by asking what the break even really is. He just pointed to those figures. It can not be a simple translation and I’m sure that’s why the sp is where it is. Investors just don’t know and the board do have trust issues. I think a company should be able to spell it out clearer. Hopefully the share buyback / dividend announcement will have to give a clear indication of cash and profit. I’d like to think I’m reasonably in tune with this sort of thing but I am struggling here.

Kingivor - I missed the mention of bybrook and 10p. What did he say?

Put in bids for companies but have been rejected (i3e will not overpay for an asset)
Dividend to be announced in January and paid shortly thereafter
New acquisitions to be funded solely from profits
Larger acquisitions which would require external financing will not happen until sp materially higher
Confirmed break even 16 for Toscana and 9 for Gain
Not planning operations update as bopd much the same (200 bopd lower due to winter issues standard for Canada)

Does anyone have a breakdown of proactive event? Want to watch Majid but really don't want to listen to other directors.

Austin, from my experience the board have never said anything to anyone that is not already in public knowledge. Emails posted from the board have only ever pointed to presentations or rns information. I think it is good Graham takes the time to respond to shareholders.

The £1b in 3 years is based on what I have outlined below as having 50% of a 17.5kt production battery grade mine. That's a fair and modest estimate when future value of Stage 2 is accounted for.

The £500m in a year is more arbitrary but is in line with what other miners have been valued at during construction phase. Litihum Americas for example has $2.6b NPV which is double Sonora and they were valued at over £2.5b during construction for Thacker Pass (now lower due to issues). If you half that due to lower NPV and half it again as we don't own 100% of Sonora, then you get to around £500m. As I say, no exact science to valuing something prior to production and Thacker Pass is completely different process. £500m mcap with finance secured and construction well under way and a partner like Ganfeng is fair estimate in my opinion. BCN were valued over £250m a couple years ago when financing only looked close.

I like to key an eye on mergers and acquisitions. Noticed yesterday Tianqi (chinese) are looking to sell half of it's 50% stake in the Greenbushes mine in Australia for $1.5b (or £1.15b). I believe the mine produces 48k per year. A very sketchy read across for BCN's stake in Sonora would be £2.18b (based on 50% of 35k or around £1b at phase one 17k). Resource wise both mines are similar but obviously have major cost differences as Greenbushes is hard rock and expensive to mine. Also Tianqi are a distressed seller with a great amount of debt. Both these thing should favour Sonora when comes to valuation.

Within one year I expect BCN to be valued around £500m (construction well under way) and within three years to be valued over £1b (in production).

I see zinnwald share price has done well over the last couple of days, currently up 22% to a mcap of roughly £22m. Amazing that it is the same asset that was basically given zero value when under the BCN umbrella. Strange how markets work... they love a story and a new one. Surely a good thing for BCN though with us still owning 44% (about £10m).

Be interested if anyone here invested? I almost did as a hedge but didn't as I never fundamentally believed in the Zinnwald project previously. Will probably end up doing well but the rhetoric of 'fast track to production' line is being pulled out and we all know in lithium that's just not possible.