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I should clarify those share prices are very rough estimates for the Sonora enterprise, based on a particular lithium price, there is of course additional value to the SP from the sale of assets to Ganfeng, and Zinnwald!

@r7632 - I think you might be missing what I'm asking?

The post tax NPV8 is $802M. Since BCN own approximately half of the resource planned to be mined (the other half will be Gangfeng with a small fraction to KDNC) the NPV8 of Sonora associated with BCN is around half this @$400m, which is around £300m. There are around 224m shares in issue which equates to around £1.34 per share, Using your 65% discount to compare with Thacker Pass this is around 87p. If you'd rather use pre-tax NPV8 of $1.25B this increases to £1.36. As you noted, there is of course the possibility of share dilution, but on the bright side Gangfeng will almost certainly have increased that NPV substantially, and hopefully the IRR too, before that happens! :-)

@Tradecraft. On the subject of tax, and tax minimisation, I'd take the ANN profit 2012 declaration with a large pinch of salt - who did they sell to and for how much? Take a read of that blog I shared the other day - there are a multitude of ways to minimise tax, some more questionable than others...

@Zoom: "So Obs are you tempted to stay to £10+?....." sure am! Even if I did de-risk substantially post 20%, I was always intending to let a large portion ride. What I'm wondering now is whether I might let the lot ride, I'm certainly starting to be persuaded in that direction. ;-)

Thanks for the contributions everyone! I had to laugh at @Barksy's post (non maliciously of course!) as I was like uh oh, don't wake a sleeping bear. How about we leave congratulating the BoD until they have actually delivered the 20%, and no talking about Sonora history until we have a processing deal in place. No one mention the war! ;-)

Anyway, I hope the above is taken in light jest, what's more relevant to this thread is looking forward post 20%, and I must say I'm impressed at your spreadsheet @Tradecraft! (Good to hear from you!). I had a look through, not with my calculator, but with my ball park and everything seems about right at first glance for what it is. A few things you might want to consider:

1. Debt repayment - This is complicated, and I've tried to estimate previously what this might be at 8% discount. The JRP includes the schedule envisaged at the time and summarised in the 30th August 2019 RNS "The JRP schedule contemplates the majority of the historic liabilities will be paid from free cash flow in years 5 to year 17 of operations, which represents a discounted NPV10 debt value of approximately US$106 million.". It appears to be in BRL in the JRP and this has moved very favourably against the USD since then. And there is the secured debt which @tomcat might remember more about. Both of these aren't too consequential for your $120/t and $180/t scenarios, but they are for the $61/t base scenario.

2. Taxes.

3. Life of mine extensions. The 14 years is certainly now an underestimate subsequent to the news release on 2nd Nov 2020

===[
Highlights:

· Mineral Resource of 176.7 million tonnes ("Mt") grading 39.7% Fe in the Indicated category, reported within an optimised pit shell and using a cut-off grade of 25% Fe.

· Mineral Resource of 8.7Mt at 36.9% in the Inferred category, reported within an optimised pit shell and using a cut-off grade of 25% Fe.

· This Mineral Resource represents a 21% increase in total mineral resources compared to the equivalent MRE published by Anglo American 2012.

· The MRE will form the basis of the mine planning studies within the scoping study, to support the operational plan to produce 4.4Mt of 65% Fe and 0.3 Mt of 62% Fe per annum.

· Significant potential exists to increase the resource base after the completion of metallurgical and optimisation studies on the surficial Colluvium and Canga and the underlying Semi Compact and Compact Itabirite material types.
]===

Keep the (constructive) contributions coming!

Ob.

@r7632 see my post @0:34 - are you able to elaborate on your assumptions behind your forecast SP and how Ganfeng's part ownership of Sonora fit into this?

It feels like most holders think 40p to £1 is possible when we take 20% of Amapa - 40p if iron ore prices are low, £1 if they are high. I think it's worth considering what next. I'm beginning to think that if iron ore prices are similar to today's we might see a share price in the £5-£10 range at full production and assuming we own @49% of Amapa.

Discuss.

The more holders that are able to convince me with decent reasoning this is possible the more likely I am to hold on to all of my shares rather than starting to top slice on @20% news as I, as I'm sure many are currently planning to.

Calculators and comparators at the ready!

Foreresearched is forearmed. ;-)

Ob.

In 2014. I wonder why it is showing up just now?

@hereandnow We (well I am at least!) are waiting on their current verbal plans of targeting 50ktpa to be formalised in writing likely when Ganfeng produce what they have been working on for some time now. Years even! Increasing from 35ktpa to 50ktpa and beyond will surely mean a greater fraction of the LCE being produced from our JV's and sooner than is currently planned.

Indeed @tomcat. I'd say if the courts get fed up with waiting (perhaps beyond this month?) then the most likely course of action is to allow the shipping of $10m net plan to proceed, using the funds we made available, to be repaid within 4 months @18% if we do IIRC.

I wondered what you were angling at @tomcat. LoL. Unlikely to be the reason for 22% IMHO, but you may be right.

"perhaps it's the end of the JRP even?" - though I'd hope if the terms of the agreement were fair and it was the banks that failed to complete, that the judges would rule in our favour and demote their credit to unsecured status as previously threatened.

@Bannor. "question is what happens if they get advised that one (or more) of the banks is still to formalise?" Presumably if they are still to formalise and they intend to, then they'll be provided with a new forecast of when this will happen. If they no longer intend to formalise then it's back to the courts to decide the next steps - perhaps it's the end of the JRP even?

Incidentally it wouldn't surprise me if a survey showed that only 22% of KDNC share holders believed the $2.5m will be released from escrow any time soon. Surely if it was much higher than this then so would be our share price! :-))

Indeed @tomcat. I see that as an approximate proxy for the probability that small creditors believe the $2.5m will be released from escrow and no doubt will approach 100% quite rapidly when it does! ;-)

Just a reminder why we got excited this week when this was reported in the courts ;-)

"(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;"

@r7632 Have you taken into account that only half of the historical NPV will be associated with BCN when Ganfeng finalises their 50% ownership? I say historical NPV as I'll be surprised if the mining rate isn't increased significantly beyond 35ktpa increasing the NPV of the project and potentially the IRR if Ganfeng have worked their magic. :-)

With the potential for £5 to £10 in a few years with a good wind. ;-)

Have a read of: https://aim-watch.com/project/lse-auctions-explained/

Good to hear from you @Bannor. I've certainly not forgotten about that clause! ;-) Just that it still confuses me as @Kiran seems to have subsequently indicated that when we get to 27% that is ours to keep regardless of future events. I may have misunderstood, or he may have misspoken, or spoken assuming all goes to "his plan" (which we don't know, and may or may not involve a third party who we exercise our right to 49% on behalf of if we can't/don't want to fund ourselves - as previously discussed). Regardless, the most straightforward is as you suggest. I like straightforward so hopefully it's a simple matter of $24m for 22% which we'll take up when required if all is going well, and if it isn't, then we may get $9m back in return.

Ob.