Member Info for observer842

Indeed @tomcat and as noted in the court judgement $135m is only a fraction of the 3Mt of ore valued near $0.5B at today's spot :-))))

@perry100. Perhaps they want the security of the 2-3% profit to repeat elsewhere? 2-3% profit in a fortnight, perhaps most fortnights is a fair old amount over the year.

Importantly, more news due is due later this week/early next ;-)

Combine:

"and once the Ruling is effective (up to one week from the date of publication),"

with:

"Further announcements will be made concerning both the Settlement Agreement and the outcomes from the Ruling once available."

Ob.

Indeed @numptytrader. Very encouraging: "Detailed discussions and drafting of the legal documents continue, and we look forward to updating the market once binding documents are executed."

There's got to be a good probability we settle within the next week now the courts have (finally!) come down on our side.

Fantastic news! Thanks for clarifying @Kiran. If you do an interview please explain why the courts seem to believe there is 3Mt of ore at stake, see earlier in this thread, not 1.39Mt as stated in our RNS's. It's important. Or at least it feels important! ;-)

Well that's what it says @Cause. But it doesn't half come out of the blue! I wonder if it's a typo and they meant $10m not 10%? @Kiran!? If they do mean 10% of the iron ore stock piles can be sold, I would have thought that it would have been caveated so that if iron ore prices sink or costs increase $10m net can still be realised by selling more than 10% of the ore. But perhaps not, perhaps the point is that they are now saying 10% of the ore can be sold, and that's that, so no one has to worry about whether it should be gross or net, or whether the sale prices and costs are fair?

Additionally, another 10% relates to that of the net proceeds destined to the banking union, which kind of begs the question why didn't they just say $1m? Perhaps it is 10% of the iron ore stock for sale after all...? which is either 0.139Mt or 0.3Mt.

On balance, and in summary, I'm not sure! LoL.

Ob.

Interesting @EV_Bull: "currently the price of iron ore is higher than USD 117.00 per ton,", which means the statement was likely made between August and early November 2020, and is referring to a statement likely made around April 2020.

It's hard to determine what text is current and what is not, at least quoting the current iron ore prices gives us a fighting chance! ;-)

Ob.

Position presumably closed when they received their placing shares yesterday, which they would then have been able to return to whoever they borrowed the shares from which they presumably sold shortly after the placing was announced.

All conjecture of course. I wonder if they intended to go over the publicly declarable threshold of 0.5% to 0.67%?

https://www.fca.org.uk/markets/short-selling/notification-and-disclosure-net-short-positions

Interesting to note that from the 1st of this month you must now declare privately to the FCA net short positions greater than 0.1% - was 0.2%.

@GC56: "Comprehensive report, but note that the headline fair value figure includes the WH Ireland recommended mine expansion factor".

I'm glad I read it for myself - this expansion, which I believe is very likely, is only included at 10% risk. If it were nailed on, and risked similarly to the current plan @50%, then instead of adding 17.5p per share to the 129.8p fair valuation it would add 5 times this = 87.5p increasing the 129.8p to 199.8p - which I presume is the "real" headline figure we have been left to deduce ;-)

£2 today, £4 fully derisked. :-)))

Ob

LoL @tomcat!

http://www.custeel.com/en/csi.jsp
===[
Date Seaborne index 62% Fe fines Seaborne index 65% Fe fines Seaborne index 65% Fe pellets premium
2021-02-09 163.20 187.50 51.05
]===

3Mt * $163.20/t = $490m :-)))

You really went beyond the cause there @Cause! And thanks @Dallas!

I think this has revealed something that we only speculated at previously: that there is more than 1.39Mt of ore "in existence" presumably processed and ready to ship. Perhaps 1.39Mt at the private port and the rest elsewhere - at the mine?

https://drive.google.com/file/d/1sdVzKZ-V1izkmKLUJXceywfIdoB84btV/view
===[
that the amount of iron ore in existence is much higher than the amount of the guaranteed debt, a fact corroborated by the creditors committee: 2. In its claim for credit (case no. 0015946-47.2016.8.26.0100, pages 898), the Union of Banks says that the Fiduciary Sale of Iron Ore would greatly exceed its credit (considering a quote of USD53.65 per ton) would total approximately USD 160million. In turn, on the present date, the price is above USD 88.45 a ton, so there was an excess of guarantee, since the value of iron ore would reach USD 265 million, that is, an excess of more than 135 million of dollars.
]===

Presumably that paragraph is from just before April 2020 when we got the first RNS related to approval to ship $10m of ore.

$160m/$53.65t = 2.98Mt (call it 3Mt)
$265m/$88.45t = 2.99Mt (call it 3Mt)

Now that's a bit of a game changer to me if that is the case! :-))) Anyone read it differently? @Bannor?

Hopefully we'll get an update tomorrow clarifying the situation.

Ob.

Thanks @Fingers. Of note is that Nasdaq traded roughly a little above $1.30 (95p) for most of the (US) afternoon, only dropping to $1.20 (87p) in the last hour.

For those new looking in, the project sensitivity to Lithium prices is spectacular:

"PFS UPDATE CONFIRMS POTENTIAL OF LOW-COST LITHIUM HYDROXIDE PRODUCTION" (17 June 2019)
https://www.investi.com.au/api/announcements/emh/8d4b608b-40d.pdf

Post-tax NPV8 is $1.108B using : Lithium hydroxide: $12,000/t; Lithium carbonate: $10,000/t

Just 10% higher prices and the post-tax NPV8 increases to a whopping: $1.345B (Figure 8: Sensitivity Analysis)

I make it that 38% higher, gives a post tax NPV8 of $2B :-)

Ob.

Indeed @john 85p to 120p sounds about right in the short to medium term based on fairly conservative lithium prices and demand. However, longer term it's worth taking a look at the sensitivity of the NPV to lithium prices, and of course what impact ploughing the profit into expansion beyond 35ktpa would have - or 50ktpa, if the project starts at 25ktpa and expands to 50ktpa rather than 17ktpa and then to 35ktpa as anticipated pre-Ganfeng on the seen!

Page 207
https://www.bacanoralithium.com/pdfs/Bacanora-FS-Technical-Report-25-01-2018.pdf
===[
A sensitivity analysis has been conducted to determine the effect on post-tax NPV8% of $802 million and IRR of 21% from the base Li2CO3 price, operating cost and capital costs. Variations from +30% to -30% for each have been used in modelling. The analysis show the Project is most sensitive to the lithium price than it is to CAPEX or OPEX. As shown in Table 22.1.4 and Figure 22.1.1 an increase of 30% in the average lithium carbonate price, from $11,000 to $14,300, increases the Post-Tax NPV from $802M to $1,430M.
]===

Lithium prices reached $25,000 in the last cycle. If they were to do so in this cycle it's not hard to see what impact that could have on the Post-Tax NPV, and consequent share price! :-))))

Ob.

Thanks for sharing @JesmondLTHer. Resource upgrade March; off-takers first half :-)))

"European Metals' Keith Coughlan talks $7 million fundraise and resource drilling progress" (3 Feb 2021)
https://www.youtube.com/watch?v=q5ac45aJ3HE
===[
European Metals Holdings Ltd's (LON:EMH)(ASX:EMH) Keith Coughlan caught up with Proactive's Andrew Scott following the news it's raised A$7.1 million. He says Luxembourg green energy fund, Thematica Future Mobility, participated in the raise with a A$5 million contribution. Coughlan adds that the funds will assist in further development of the Cinovec project and to introduce strategic institutional investors as they progress towards making a final investment decision and full funding.
]===

@r7632: "That is I think the Post tax NPV £594,417,778 takes into consideration Ganfeng owning 50% of SLL." The post-tax NPV of $802m comes from the feasibility study which is summarised here: https://www.bacanoralithium.com/projects/sonora-lithium/ and was published January 25, 2018 before Ganfeng came on the scene on 20 May 2019. At the time the FS was published BCN owned near 100% of the mined regions in the FS, with KDNC owning a small (3.6% IIRC) percentage.

Personally I think 120p is achievable sometime between Ganfeng taking 50% of SLL/29.9% BCN, and start of construction later this year. And much more than this should lithium prices increase strongly or plans for >35ktpa start to materialise in writing.

@tomcat Is there any need? Looks like they are going one after the other. Though see my post on 1 Dec '19 if you are interested (31 pages back, 100 posts per page) - one scenario I covered was a raise at 49p, along with some more "optimistic" ones shall we say! LoL.

@r7632, you need to divide by 2 as BCN (will) own (slightly less than) half the Sonora Lithium project, but you can now add back in the equity element of the CapEx of the NPV. Simplest to stick with VSA's 120p based on current production targets ;-)

"VSA Capital Market Movers - Bacanora Lithium" (03 Feb 2021)
https://www.proactiveinvestors.co.uk/companies/news/940278/vsa-capital-market-movers---bacanora-lithium-940278.html
===[
We reiterate our Buy recommendation and upgrade our target price to 120p.
]===

I should add that in terms of very short term I haven't got a clue - AIM is too unpredictable! Could fall through 40p tomorrow on a whim! Or equally up to 60p and beyond. LoL.