Member Info for observer842

The tax situation is complicated. Anyone know what it would be for a project in this situation? Anyway it confused me. I think I meant to write: "I'm not sure of the tax situation - but after tax that's $60m (perhaps $30m-$40m) + ~$100m of cash flow to the project. In fact, perhaps that $60m is pre-tax and the $30m-$40m is post-tax? Now there's a thought... "Net of costs" is not "net of costs and tax"...

On the topic of net revenue from the stock piles. On 30th Aug 2019 we were told: " An independent survey of these stockpiles indicates some 1.39 Mt (+/- 10%) of iron ore in three stockpiles with an average Fe grade of 62.12% (+/ 10%), which based a US$80 per tonne of 62% Fe would net Amapá a forecast US$60 million net of costs.". Since then iron ore prices have fluctuated somewhat and at some point last year the BoD started estimating $30-$40m, possibly at a time when futures were somewhat below $80/t, and have stuck with this line to date, e.g. in the January 2021 corporate presentation: "Sale of net US$ 30 -40 m Fe Stockpiles". But clearly that has to be a gross underestimate, unless we have a pre-agreement in place based on prices much less than today's spot or futures, or is discounted for bank repayments or some such other discount?

Assuming that isn't the case and we were able to sell all of the ore at today's spot of around $170/t, then that's an additional $90/t ($170 - $80/t) of revenue per tonne of ore sold. $90/t * 1.39Mt = $125m. I'm not sure of the tax situation - but after tax that's $60m (perhaps $30m-$40m) + ~$125m of cash flow to the project. Whichever way you look at it, tax or not, this is likely comfortably over double the original estimate of $60m when a share price of >40p was being bandied around on KDNC owning 20% of Amapa, at a time EMH was worth considerably less. :-)))) Did it come from the WHI analyst or Brand Communications? Or was it me? LoL! :-)

Ob.

@mr.james "OBs your the numbers man I thought you would be telling us.". LoL. At the current iron ore prices, if I used my own valuation of Amapa to KDNC's share price when we take 20% of the company I would probably never derisk! I want to know what others are thinking, ideally with the reasoning behind it, so I don't top slice too soon, or more likely, never! Perhaps I'll just let it ride until we get to £5. LoL. ;-) I guess the point is, if sufficiently enough of us believe it'll fall back into the 40's because "we" never updated our valuations following the recent rise in EMH and iron ore prices, then that's what'll happen... until the scoping study is released, or some other persuasive document like the Feasibility Study or reputable analyst coverage (or large reach YouTuber!), and we fill the air with what if's as the share price re-rates accordingly!

If these prices held at production the EBITDA of the project would be truly eye-watering. And of course the 1.39Mt of ore at the private port should contribute significantly to project rehabilitation costs at these prices! The latter probably being the more important aspect at this time.

I'm wondering whether the Amapa project metrics are now so attractive we (the long term holders) are having trouble believing them. I know I am! LoL. Might explain why we aren't in the 20's already. I suppose I should behave like a typical AIM punter and sell 10-20% in the 50-60's, expecting the fall back into the 40's. If I must...

Ob.

Based on facts, figures, analyst reports and fingers in the air, we've previously speculated that our share price might increase into the 40's when the deal with the banks completes and we take our 20% of the project, which could happen any day. But this was based on iron ore prices significantly less than today's and a much lower EMH contribution to our share price - perhaps 2-3p rather than ~10p. I'm interested in what SP others think we might reach if the deal were to complete next week. Is it possible we might break £100m (67p) or £1 even!?

Understandably I don't want to derisk too early, and presumably the more that hold off, the more self-fulfillingly high the share prices will climb as buyers struggle for shares?

Thoughts?

Ob

Thanks @Fingers!

"GLOBAL LITHIUM WRAP: China carbonate price at 14-month high, hydroxide moves higher" (January 15, 2021)
https://www.metalbulletin.com/Article/3970684/GLOBAL-LITHIUM-WRAP-China-carbonate-price-at-14-month-high-hydroxide-moves-higher.html
===[
China’s domestic battery-grade lithium carbonate prices rose by 5.6% to a 14-month high on Thursday January 14, 2021 on tightening spot supply while battery-grade lithium hydroxide also surged by 10.3% week on week on low availability of cheap materials, Fastmarkets heard.
]===

And drill results, which were scheduled to be released last year. I suspect they want to coordinate with one or both of the other news items. Yangibana news is continuing to roll too. But the big one for me (other than Amapa of course!) is Sonora firming up plans to produce more than 35ktpa and the consequences this has for KDNC's JV areas.

The deal completes with these prices and our socks could be well and truly blown off!

http://www.custeel.com/en/csi.jsp
===[
Date Seaborne index 62% Fe fines Seaborne index 65% Fe fines Seaborne index 65% Fe pellets premium
2021-01-15 172.60 195.50 46.30
2021-01-14 171.40 194.50 46.30
2021-01-13 168.90 191.50 45.70
2021-01-12 171.20 193.50 45.70
2021-01-11 171.00 193.20 45.70
2021-01-08 171.50 191.20 45.70
2021-01-07 170.70 188.00 45.70
2021-01-06 168.50 185.80 44.00
2021-01-05 167.00 185.00 44.00
2021-01-04 164.40 181.00 44.00
2020-12-31 159.20 173.50 44.00
]===

@sharehunter. Pretty sure they do EVERYTHING within their toolkit to make money. It's their job. Though some practices are more questionable than others...

On Amapa news we might just break it given the current iron ore prices!

Do you think we've been tipped somewhere? Anyone spotted anything in the press?

@degsie. See my post from Wednesday.

===[
I've recently been researching other companies in various sectors (partly in anticipation of where to invest when I top slice here on Amapa news!) and although it shouldn't, I have to admit reading back several months of chat on discussions forums certainly impacts my views on the company: my feel for it - my sentiment. Suffice to say the boards with reasoned current and future valuations appeal to me and my calculator the most, which begs the question - is anyone appealed by the boards that non stop squabble? Anyone? LoL! Perhaps I should post more on here? Get that signal to noise raised - not posts like this, there is little of value in this paragraph! I heard your request @Degsie - but I have to admit it's a lot of work, with a lot of caveats outlining what I believe is a fair current valuation of KDNC and what I believe it might be should events play out our way, and if I'm being balanced, if it doesn't! Don't we pay people to do this for us? LoL. I hope we get a decent (public!) appraisal when Amapa completes - and certainly after the scoping study is released. My personal opinion is that if more people who aren't invested (and some who are!) understood the nature of the Amapa deal on the cards we'd have many more buys than sells at the moment, and we'd be rightly where I believe we should be - firmly in the 20's waiting company defining news to take us into the 40's and beyond - perhaps significantly beyond in the current iron ore market! :-)))
]===

And it our news doesn't come soon, it looks like EMH might drag us up kicking and screaming. LoL!

With the current environment for these three metals, and looking around at our peers, I'm beginning to wonder if £200m mcap might be on the cards with the right news from Sonora, Amapa + Yanigbana. Sure I believe £200m is doable in time, e.g. at production from our assets, but it could be doable this year. £1+ is certainly on the cards. And I have to keep reminding myself of this as I see "Damn, I should have invested in there"'s around me rise while we (mostly) wait for our news. Patience Ob. Patience! We are undervalued today, and stand to multi-bag tomorrow. Our turn will come. It better! :-)))

Ob

http://www.asianmetal.com/LithiumPrice/Lithium.html
http://www.asianmetal.com/RareEarthsPrice/RareEarths.html
http://www.asianmetal.com/IronOrePrice/IronOre.html

Good spot @Cause. Fingers crossed it's the contract signed and sealed! ;-)

I've recently been researching other companies in various sectors (partly in anticipation of where to invest when I top slice here on Amapa news!) and although it shouldn't, I have to admit reading back several months of chat on discussions forums certainly impacts my views on the company: my feel for it - my sentiment. Suffice to say the boards with reasoned current and future valuations appeal to me and my calculator the most, which begs the question - is anyone appealed by the boards that non stop squabble? Anyone? LoL! Perhaps I should post more on here? Get that signal to noise raised - not posts like this, there is little of value in this paragraph! I heard your request @Degsie - but I have to admit it's a lot of work, with a lot of caveats outlining what I believe is a fair current valuation of KDNC and what I believe it might be should events play out our way, and if I'm being balanced, if it doesn't! Don't we pay people to do this for us? LoL. I hope we get a decent (public!) appraisal when Amapa completes - and certainly after the scoping study is released. My personal opinion is that if more people who aren't invested (and some who are!) understood the nature of the Amapa deal on the cards we'd have many more buys than sells at the moment, and we'd be rightly where I believe we should be - firmly in the 20's waiting company defining news to take us into the 40's and beyond - perhaps significantly beyond in the current iron ore market! :-)))

Ob.

Interestingly futures are increasingly being pulled upwards, indicating the market might be starting to accept higher prices are here to stay - for a while at least :-)

From the 9th:
https://www.cmegroup.com/trading/metals/ferrous/iron-ore-62pct-fe-cfr-china-tsi-swap-futures_quotes_globex.html
===[
DEC 2021 135.98
DEC 2022 103.50
DEC 2023 86.72
]===

Today:
https://www.cmegroup.com/trading/metals/ferrous/iron-ore-62pct-fe-cfr-china-tsi-swap-futures_quotes_globex.html
===[
DEC 2021 135.47
DEC 2022 113.33
DEC 2023 96.39
]===

The article is from last Monday (4th). Prices have improved further since :-)))

http://www.custeel.com/en/csi.jsp
===[
Date Seaborne index 62% Fe fines Seaborne index 65% Fe fines Seaborne index 65% Fe pellets premium
2021-01-13 168.90 191.50 45.70
2021-01-12 171.20 193.50 45.70
2021-01-11 171.00 193.20 45.70
2021-01-08 171.50 191.20 45.70
2021-01-07 170.70 188.00 45.70
2021-01-06 168.50 185.80 44.00
2021-01-05 167.00 185.00 44.00
2021-01-04 164.40 181.00 44.00
2020-12-31 159.20 173.50 44.00
]===

Indeed @jimb. And with only $250k outstanding on the CLN, which is scheduled to be fully repaid by April this year, that's one less thing that should be weighing on our mcap. Finally! ;-)

Thanks for reminding me that the Ganfeng deal to take them to 50% hasn't completed yet.

"Ganfeng exercises option to increase investment in Sonora Lithium Ltd ("SLL")" (13 November 2020)
https://polaris.brighterir.com/public/bacanora_lithium/news/rns/story/xo3endx
===[
Ganfeng will now apply to the relevant authorities in China, predominantly the State Administration of Foreign Exchange (SAFE), in order to allow the funds to be remitted to the UK.
]===

As far as I'm aware, and it is only my take of history so DYOR, when BCN first attempted to redomicile to London KDNC blocked this because their JV's would have been adversely affected, whether they were adversely affected when BCN eventually redomicilied is unknown. Though I seem to recall KDNC were OK with the redomicile the second time round, though I don't believe an operating agreement had been drawn up to replace the exploration agreement at the time, or now.

Collectively the long term holders on the KDNC board hold a lot of knowledge and may be able to shed more light on the current situation!

Ob.