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I'd feel much more comfortable with increasing iron ore prices if we were actually selling some at this price!. By the way CME group now has iron ore above $90/t out to the end of next year :-)))

https://www.cmegroup.com/trading/metals/ferrous/iron-ore-62pct-fe-cfr-china-tsi-swap-futures.html

Timescales @Barksy. If no curve balls then: sell e.g. 20% of EMH, buy KDNC. KDNC triples. Sell KDNC. Buy back EMH shares and more before they triple. You know, the usual. LoL ;-) Of course it never goes quite to plan, and I suspect it wouldn't go to plan for the BoD too if they tried it...

Pretty interesting news @Fingersxed! Who are they going to call? ;-)

Not sure how I missed this yesterday...

http://www.custeel.com/en/csi.jsp
===[
Date Seaborne index 62% Fe fines Seaborne index 65% Fe fines
2020-09-03 130.50 143.30
2020-09-02 128.00 140.80
2020-09-01 125.70 138.30
2020-08-31 124.70 137.30
2020-08-28 123.50 135.80
2020-08-27 121.20 133.30
2020-08-26 124.00 135.30
2020-08-25 121.40 131.80
2020-08-24 124.30 134.00
2020-08-21 126.05 135.20
2020-08-20 128.25 136.20
2020-08-19 128.55 136.50
2020-08-18 127.05 134.20
2020-08-17 121.25 128.70
2020-08-14 120.65 128.40
]===

The rapidly increasing 65% is of most interest ;-)

Do we have to issue a TR-1 if we go below 15% of EMH, or are we still exempt?

@Barksy. EMH is great, so is BCN. But the timescales are not as close as Amapa IMHO for a re-rate. Of course both might get news in the short term out of the blue. But if I were in control of KDNC, I'd be cashing in on some of the EMH rise and using the funds to progress Amapa (rather than place), and even considering buying shares in KDNC if I were confident Amapa was going to come good and I would be able to issue those shares at double or triple even the price I paid for them in a short few months. Weeks even.

It's about time scales @Mullins. If our BoD think we can multibag quicker than EMH does, then they should be selling EMH and buying KDNC: or at least do that instead of a placing around this price. If they are now confident Amapa will come good of course!

It perplexes me the news was deemed only worthy of a few percent. I think something is going on... in a good way for those that hold their shares, or continue to buy, rather than sell. At least I'm hopeful of that!

I agree it will multibag if Amapa comes good @Mullins. However, now is the time a confident BoD would buy back its own shares if it is able to. They've agreed in principle. They can make it work one way or another. Use the placing shares, and EMH to buy shares. IMHO

Indeed @Mullins. No way our "Cadence Agrees In Principle To Settlement Terms Proposed By Amapa Bank Creditors." news was only worth a few percent on our share price. *Now* the BoD should be selling EMH and buying KDNC IMHO. ;-)

@Cause17. My understanding is that if the deal goes through and we take our 20% and release our $2.5m from escrow *before* any ore has been shipped, then our $2.5m will be used to pay the small creditors. I'm not certain on what happens to it if the ore ships first, and then we complete. I don't believe it comes back to us - it'll be used to progress the project. In terms of the study we are funding - I believe that will be released shortly after we go to 20%, possibly simultaneously, but if there is a small gap, that could be a great opportunity for those who have done their own research for one final top up - obviously depending on how much you view the market is undervaluing our market cap at the time - it might be overvaluing it: this is AIM. AIM is weird! ;-)))

And another added. Moving quickly now... ;-)

TL;DR $2B!!!! ;-)

The conservative baseline iron ore prices used in the Judicial Recovery Plan are $61/t @62% Fe and $80/t @65% Fe. We don't know what NPV this results in, though we are told that the average EBITDA per year is $136m:

"Approval of Judicial Restructuring Plan - Amapa" (30th Aug 2019)
https://www.lse.co.uk/rns/KDNC/approval-of-judicial-restructuring-plan-amapa-i427sb3g1b3sys4.html

I find it useful to have in mind the likely additional EBITDA and NPV that increased iron ore prices bring to the project finances, all else being equal.

According to Custeel:

http://www.custeel.com/en/csi.jsp
===[
Date Seaborne index 62% Fe fines Seaborne index 65% Fe fines
2020-09-02 128.00 140.80
]===

At full production of 5.3Mt per year the 62%, 65% split is 0.9Mt & 4.4Mt respectively. Accordingly if these were used instead of those used in the JRP this would result in an additional EBITDA of:

((128.0 - 61) * 0.9Mt) + ((140.8 - 80) * 4.4Mt) = $60.3m + $267.52m = $327.8m

Full production is expected by 2024, but due to recent delays let's call it 2025, and to last for around 14 years. It's likely to last longer than this in practice as there are substantial resources which can be proved to reserves. Also the 5.3Mt could be increased substantially if the infrastructure and market can support it. Going with a conservative 2025 and 14 years the additional pre-tax NPV brought to the project by the additional $327.8m EBITDA is easy to estimate, making the conservative assumption that the ramp up is zero between now and then:

https://www.calculatorsoup.com/calculators/financial/net-present-value-calculator.php
===[
Net Present Value (NPV)
Interest Rate: % discount rate per Period: 8.0000
Compounding: times per Period:1
Cash Flows at: of each Period End
Number of Lines: 2
Line Periods Cash Flows
0 (time 0) 1@0
1 4 @0
2 14 @327.8

For the Cash Flow Series
NPV = $1,986.39

Cash Flow Stream Detail
Period Cash Flow Present Value
0 0.00 0.00
1 0.00 0.00
2 0.00 0.00
3 0.00 0.00
4 0.00 0.00
5 327.80 223.10
6 327.80 206.57
7 327.80 191.27
8 327.80 177.10
9 327.80 163.98
10 327.80 151.83
11 327.80 140.59
12 327.80 130.17
13 327.80 120.53
14 327.80 111.60
15 327.80 103.34
16 327.80 95.68
17 327.80 88.59
18 327.80 82.03
Total: 1,986.39
]===

$2B is my conservative estimate of the additional pre-tax NPV8% that using today's spot price for the next 2 decades brings to the project. There is approximately zero chance the spot will stay at these values for the next 2 years. They will fluctuate. Historically they have been both significantly higher and lower. Hopefully the scoping study scheduled to be released after various (near-term!) milestones have been achieved will have a good go at unequivocally spilling the beans to the wider market on what some of us have already deduced, including the baseline NPV using the conservative prices! ;-)

Ob.

Cheers @Dallas. I think that nugget mostly clears up my understanding!

Cheers @Dallas & @Nick. Is this true about KDNC?

https://www.contracts-for-difference.com/igmarkets/IGMarkets-interview.html
===[
Ramy: By definition, a Market-Maker stock such as those listed on AIM do not trade on an order book system which means that direct market access is not available. Clients can work orders via the trading platform or call our dealing line.
]===

Do we have DMA? I presume not. Which means the 13.75p probably happened as market makers withdrew for the day?

Indeed @Frankie: "Btw, I thought that 16:35, and later, trades Occurred, commonly, on other shares?" I'm not questioning the existence of after hours trading, I'm questioning the mechanics of it on AIM shares. I'm tending towards the conclusion that some platforms allow DMA access a little before and a little after trading hours. I think I knew this! LoL.

I'm not worried, I'm perplexed. In my experience if you don't learn from experience, then others more experienced will beat your experience. In this case, my experience says the market makers want shares and are loading up on those who don't quite understand the significance of today's announcement. If I'm wrong with that assessment, then I want to know why I'm wrong, so I can adjust my experience model of markets, and AIM in particular. In summary: learn from experience, don't ignore it! ;-)

Thanks for confirmation @Nick2151! Any idea of the mechanism behind this? Trades between other IG customers only? Part of the auction in some way, but fall back to ordinary trade otherwise?

Regardless of the actual mechanism, it looks to me like there is a mistake somewhere along the line, either in the execution, the fact, or the reporting of the fact.

Here's some decent background on auctions:

http://www.theel1tetrader.com/2013/01/lse-closing-auction-how-it-works.html

I'm wondering if the 13.75 comes from someone wanting to take part in the auction, but for some technicality the auction didn't complete, perhaps lack of volume, but a market maker decided to fill it anyway? Perhaps that is the mechanism you are thinking of @LB28? Does this happen often?

@LB28 "It’s just a standard buy, some people can buy after close." Have you got a link for some background on this? I thought on AIM it was through auctions only after hours, or is there another mechanism available? And if so, have you the details?