Member Info for observer842

(a) lots
(b) LOTS

And not forgetting that the revenues contained within the iron ore stock piles should start flowing to the project within weeks of us taking 20%! At today's iron ore prices net should be significantly greater than the $60m estimated using $80/t Fe 62% in the RNS's, and whatever assumptions were used for the $30-40m in the corporate presentation :-)))

https://www.cadenceminerals.com/wp-content/uploads/2021/01/Corporate-Presentation-KDNC-JAN-2021-PUBLIC-1.pdf

First production potentially next year is pretty impressive IMHO! For example EMH isn't likely to be until late 2024 according to Shard: "Despite the solid progress, we push back first production in our model from 2023 to late 2024."

Timeline are a little uncertain. Take a look at the corporate presentation. Looks like 19-24 months to start of production (operations). And if I recall correctly a 2 year ramp up. So perhaps 4 years to full production from taking 20%?

https://www.europeanmet.com/wp-content/uploads/2021/01/Shard-Capital-EMH-15-1-2021.pdf

https://www.europeanmet.com/wp-content/uploads/2021/01/Shard-Capital-EMH-15-1-2021.pdf

And that's with him seemingly not realising that the project economics are significantly improved in the light of today's iron ore prices. I'm sure many waiting on the sidelines or wanting to add more on 20% news will be extremely happy if this settles around 40p - I know I would be! :-)

Good idea regarding using 3.6 for the baseline @Tradecraft. Do say if you need any help with filling in the gaps. I'm sure many on here will be more than happy to help! @tomcat has a good memory.

Last time we were estimating how much secured debt might be owed to the banks US$135m was bandied about. Perhaps this is the reason why net revenue from the iron ore stock piles at the port is still estimated to be $30-40m despite the meteoric rise in iron ore prices? Perhaps we've agreed with the banks that a large portion of the revenues beyond our original estimates will go to them? Yet another possibility added to the growing list! LoL.

As to presenting the outcome of varying your input variables - it's going to be a little tricky I think. 'll be interested to see how you handle it. That's because as I've already pointed out a changing FX doesn't change everything equally. And as @Kiran recently pointed out increasing iron ore prices may increase CapEx due to increasing steel prices. There are other intertwined relationships too on the OpEx. A picture speaks a thousand words. Perhaps 3D sensitivity graphs? Or try animating them for 4D? LoL.

Ob.

It's a mistake @Barksy. Well spotted! The iron ore at the private port should be referred to as iron ore stockpiles. The tailings are at the mine, in the tailings dam.

Thanks @Barksy and @Frankie! IMHO he really should mention what ore price the estimated $140m EBITDA per year is based on. It's based on Fe 62% @ $61/t. Current spot price is $168/t. If we were at full production today, and all else being equal, that EBITDA might be expected to be over half a billion dollars per year greater!

I know he's trying his best to sell the prospects of Amapa - but he consistently misses this crucial key point! ??https://emojidictionary.emojifoundation.com/person_facepalming

Ahem: $61/t * 3.6 / 5.47 = $40/t

That's a pretty amazing job @Tradecraft. I'm glad you are taking my suggestions in the spirit they are intended. Critical, not criticising! ;-)

You'll probably be aware that by using a USD to BRL of 5.47 rather than that used in the JRP of 3.6 on the second page you've implicitly reduced the sale price of the ore from $61/t to $40/t. (61 * 5.47 / 3.6)

But came across this useful site whilst looking: https://app.anm.gov.br/SIGBM/Publico/

@tomcat. I presume the question is who now owns "Unamgen Mineração e Metalurgia Sa"? I have been unable to find out.

Might be worth reviewing Champion Iron's recent history which might indicate where we are heading? 50 bagger.

"Junior miners bring abandoned iron ore projects back to life" (JANUARY 5 2021)
https://www.ft.com/content/95d038cc-993a-47f5-8324-f733fc5a900a
===[
Another beneficiary of the iron ore price surge is Champion Iron, an Australia-listed producer that bought the mothballed Bloom Lake mine in Canada’s Quebec in 2016 for C$10.5m ($8m). The previous owner, Cliffs Natural Resources, spent $7bn acquiring the mine in 2011 and building infrastructure over five years.

“Look at what happens when the herd mentality sets in and most analysts and investment bankers say iron ore prices are going to x and staying there forever,” said Michael O’Keeffe, Champion’s founder and executive chairman. “I like to take countercyclical views.”
]===

Each to their own @jimb. I kind of like Joe nowadays. Certainly an informed commentator - he's just not always right. Who is!? LoL. His latest blog is a good read:

"Lithium 2020: Parting Shots" (January 1, 2021)
https://www.linkedin.com/pulse/lithium-2020-parting-shots-joe-lowry?trk=public_profile_article_view
===[
If you remember one thing let it be this: “lack of investment in lithium chemical production during the past few years will create tight market for battery quality material lasting more than five years in the face of 300% growth”.

The case for investing in juniors obviously contains greater risk but, in my opinion, provides much greater potential assuming you choose wisely.
]===

@mmm my understanding is that these repayments are in relation to our $2.5m in escrow. At one point it was hoped that the deal would complete in January 2021. Whether it will or not remains to be seen - but if not this month, then perhaps next? It feels like it's coming to a head one way or another...

The link to the court case is:

https://esaj.tjsp.jus.br/cpopg/show.do?processo.codigo=2S000I22C0000&processo.foro=100

There was movement several times during the week, including yesterday. Fingers crossed!

Ob.

According to the court document quoted from below, we likely believed at one point in the recent past (likely November, December or January - probably December) that we believed the deal with the banks would complete this month. That's my understand at least. DYOR.

===[
(e) updating of the negotiation with the Bank Syndicate in order to fulfill the preceding condition of the PRJ; (f) forecast that, based on the information provided by Recuperanda, creditors will be able to receive their credits in January / 2021, the period necessary to finalize negotiations with the Union of Banks and the organization of payment;
]===

As to how we might fund the 49%. There are several avenues. For instance I'm hopeful that sometime imminently Ganfeng complete their studies which increase the ktpa and life of mine, increasing the NPV whilst reducing the IRR. Broadly speaking I'd be expecting them to deliver perhaps an additional $0.5B to 1B NPV8 which we might be right to associate roughly 30% with us, meaning at production and at reasonable Lithium prices (I believe they will seem very conservative in time!) Sonora might be worth $150m to $300m to KDNC. Would we, should we let it go for $100m if they deal was on the table today, pre-construction? Perhaps!

@Zoom - I certainly do share the view that this company has some serious potential! Medium term whilst we have growth in sight I'd rather we didn't dividend out but continue to reinvest, or if we really are flush with cash and not knowing what to do with it and believe we are undervalued - buy back our own shares. Something I read on one of the boards during the week sums it up:

===[
Bare in mind new companies don't pay dividends. Look at Tesla. Not expecting dividends there. But SP rises.

I am in this for Market Cap appreciation not waiting on dividends. That way you pay tax on Capital gains when you want. That is you can plan tax years and move from one year to another.
]===

@Bannor: "yes I am that predictable". LoL - if only the share price was! ;-)

@cmsammy - There was a bit of discussion regarding the 49% a few days ago. Worth taking a read back through @Bannor and my posts - if not the lot! :-)))

Ob.