Member Info for observer842

My estimate is simply from the updated PFS earlier this year:

"PFS UPDATE DELIVERS OUTSTANDING RESULTS 75% INCREASE IN CINOVEC NPV TO US$1.94B 16% INCREASE IN PRODUCTION TO 29,386TPA" (19 January 2022)
https://www.investi.com.au/api/announcements/emh/7381a65f-d0b.pdf
===[
The results of the study are very positive for the overall economics, resulting in a far greater amount of the ore resource being utilised for production of lithium and increasing the after tax NPV8 from USD1.1B to USD1.94B. The increased NPV assumes a long-term price for lithium hydroxide of US$17,000 per tonne. An increase in the lithium hydroxide price by 30% to USD 22,100 would increase the NPV8 (post tax) to over USD 3B (refer to figure 13 on page 25).
]===

So actually, my $4B off $29/kg looks conservative. More like $4B off $27/kg. Closer to $4.5B off $29/kg. :-)))

I make $29/kg very roughly $4B NPV to the project, $2B to EMH :-)))

And near term prices continue to rise above $80/kg. :-)))

https://www.lme.com/en/metals/ev/lme-lithium-hydroxide-cif-fastmarkets-mb#Price+graph

I make that Rocktech lithium deal at $29/kg for 5 years starting 2026. Long term enough for you? :-)))

Continuing to rise above $80/kg. Wow.

https://www.lme.com/en/metals/ev/lme-lithium-hydroxide-cif-fastmarkets-mb#Price+graph

My upper estimates using $22/kg appear rather conservative round about now...

https://www.reddit.com/r/CadenceMinerals/comments/vpr5w7/due_diligence_lsekdnc_cadence_minerals_asset/

Nice @jimb! I make that around $29/kg hydroxide over 5 years from 2026. $$$ EMH & Sonora deals.

Fantastic confirmation!

===[
"LithiumMX will operate with private companies, concessions previously granted in Sonora were not removed.
"It will be a mixed exploitation due to the permits granted by previous governments": Fluvio Ruiz of @OEnergia
]===

Little 'ol KDNC has a very decent stake in those concession :-)))

"He explained that this area is seven kilometers long, 2.5 km wide and 400 meters deep, and that the important thing about his visit, as well as the information obtained, is to have a complete picture of both lithium and its potential worldwide."

Remind me again how much of the JORC defined lithium resource and reserves are attributable to KDNC?

"Brazilian Iron Ore with Alan Green" (12/10/2022)
https://ukinvestormagazine.co.uk/barratt-developments-the-uk-economy-and-brazilian-iron-ore-with-alan-green/
===[
Since the company raised some money at 20p the share price is now sitting at half that which is absolutely DAFT considering what they got there on Amapa.
...
Currently has a market cap of just £16m which is DAFT, but that's where a lot of resource companies are at the moment, but any tangible progress at Amapa from this point on I believe will have a significant impact on the valuation of the company, and we should see that valuation gap redress in the not too distant future.
]===

Reminder of the key points from the interview with Kiran:

"Cadence Minerals #KDNC - Interview with Kiran Morzaria direct from Santana, Brazil" (7 Oct 2022)
https://www.youtube.com/watch?v=RGi738_fmWw
https://www.reddit.com/r/CadenceMinerals/comments/xy5nc3/cadence_minerals_kdnc_interview_with_kiran/
===[
Amapa
* Mineral resource increase by about 48%.
* Expects about a 15 year mine life from the ORE reserve element of the resource (scheduled this month).
* PFS is nearing finality.
* $605m revenue per year at current Fe prices.
* Relationship building with local community who are very keen to get the project moving and increased.

Evergreen Resources
* Lists hopefully in November.
* Hopefully a revaluation due to great prospects and locality to Core Lithium's assets.

Yangibana
* Varying exciting aspects because it's already basically coming into production - 2024

EMH
* Waiting to complete DFS. Project financing. Construction.

Sonora
* Ganfeng talked about increasing production to 50ktpa Lithium Hydroxide.
* Not finalised the full study yet, but expect our area to be mined earlier if so, but we need to see the mine plan to be sure.
* View continues to be that our JV licences are still fully valid.

Valuation
* Improved balance sheet when LT&LS (Evergreen) and Yangibana investments are realised.
* Fall in iron ore prices has had an impact on us.
* AIM market down by 45% which we are being impacted by.
* Ultimately Amapa is still sound and the Lithium projects have plenty of upside.
* Rosy future ahead for Cadence.
]===

Can't see any bid for the company being successful without the backing of the BoD, and I can't see them recommending anything which doesn't see their 29p options significantly in the money. Just my view. Amapa PFS due soon should reveal an NPV to the market, and even if discounted heavily could rerate us significantly if we have enough wider market reach and understanding. Again, IMHO.

EMH news imminent IMHO as a few weeks ago KC said the following...

"European Metals (ASX: EMH) executive chairman Keith Coughlan at New World Metals Melbourne." (21 Sept 2022)
https://www.youtube.com/watch?v=eGVGKlPlSk8&t=172s
===[
We've had a bit of an absence of news flow lately but there are a couple of things that I think we'll be able to deliver to the market over the course of the next few weeks.
]===

A few weeks ago KC said the following...

"European Metals (ASX: EMH) executive chairman Keith Coughlan at New World Metals Melbourne." (21 Sept 2022)
https://www.youtube.com/watch?v=eGVGKlPlSk8&t=172s
===[
We've had a bit of an absence of news flow lately but there are a couple of things that I think we'll be able to deliver to the market over the course of the next few weeks.
]===

Lots on the horizon, some imminent! :-))

Short version, news due this quarter:
===[
EMH: Feed, DFS, possible offtakers/financiers announced. (news now imminent)
HAS: A$9m shares issued.
Amapa: ORE (Oct 2022), PFS published.
LT&LS: Initial Public Offering (Nov 2022)
Sonora: News is increasingly likely IMHO.
]===

Longer version - follow the link for better formatting and corroborating links.
https://www.reddit.com/r/CadenceMinerals/comments/y02kja/comment/irqkocz/
===[
I make the TL;DR on upcoming news as:

Amapa Iron Ore: First right of refusal to increase ownership stake from 27% towards 49% of a project that had discounted cash flow valuations of $1.2B Anglo & $1.66B Cliffs and an initial valuation when purchased by Anglo of $3.2B in 2008.

Anticipated order of events: ORE (Due to be completed in October 2022), PFS (Due to be published in Q4), 22%/IPO/DFS.

Shipment of stockpiles recommencing when conditions are favourable.

Sonora Lithium: In conversation (Feb 2022) with Ganfeng regarding KDNC's 30% JV's.

Anticipated order of events: Possible sale of some of Sonora to Lithium for Mexico, publication of expanded DFS, new off take/investors.

No material impact on our joint venture areas from recent Lithium nationalisation initiative.

Evergreen Lithium: Initial public offering hopefully listing in November 2022

Yangibana Rare Earths: Finalisation of agreement to take A$9m in HAS shares in exchange for our joint venture areas due in Q4

EMH Lithium: Q4 reporting on Feed & DFS, and advancing discussions with government, EU and then with off-takers and financiers. News now imminent.

My Latest valuation estimates, and Due Diligence by u/EV-BULL suggest the market is currently discounting Amapa and Sonora to near zero contribution to the NAV.
]===

Even longer version of upcoming news and recent events.
https://www.reddit.com/r/CadenceMinerals/comments/y02kja/weekly_discussion_thread_upcoming_news_icymi/

What I find incredible is the potential future upgrade of the inferred resource to reserve status as mentioned in Friday's RNS could increase the life of mine by 3 years. But that hardly sounds incredible when we are talking a 15 year life of mine baseline does it? But it is incredible - it's an additional revenue of $1.9B ($120/t * 3y * 5.3Mt) or so. It's the scale of the operation that we currently have a 27% investment in that is mind boggling, and I sometimes forget this! If this plays out just right we stand to make a very decent return from these levels IMHO.

Think I better retract this now I've had time to take a closer look at the 2012, 2020, 2022 statements and RNS's! lol. 15 years it is then.

===[
So ball park potential increase in mine life might be:

14 years (historical) * 1.21 (2020 uplift) * 1.44 (2022 uplift) = 24 years.
]===

Yeah @Bannor. Additional resource to reserve conversion and agreements with others might take us up to the 25 year mark eventually (or even more longer term!), but I think the expectation is that we'll get 15 years base in the PFS, maybe we'll see more though - that's why I'm going for 15-20 years ;-) Here are his exact words:

"Cadence Minerals #KDNC - Interview with Kiran Morzaria direct from Santana, Brazil" (7 Oct 2022)
https://www.youtube.com/watch?v=RGi738_fmWw&t=151s
===[
we certainly expect to be able to have from this resource about a 15-year mine life
]===

Indeed @tomcat. Clearly we will have to wait for the ORE or the PFS to be delivered for the consequence of this uplift, maybe as early as next week, but it's pretty clear to see that we have the potential to deliver much more than the:

"Updated Mineral Resource Estimate for the Amapa Iron Ore Project" (02 November 2020)
===[
The historic mine plan would mean that the Amapá Project would produce at steady-state production an estimated 4.4 Mt of 65% Fe and 0.9 Mt of 62% Fe per annum for approximately 14 years.
]===

given first the:

"Updated Mineral Resource Estimate for the Amapa Iron Ore Project" (02 November 2020)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=311428202001057764
===[
This Mineral Resource represents a 21% increase in total mineral resources compared to the equivalent MRE published by Anglo American 2012.
]===

and Friday's ADDITIONAL increase:

"Cadence delivers an increase to JORC Resource tonnes at the Amapá Iron Ore Deposit, including a substantial uplift in Resource Categorisation." (07 October 2022)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=311428223697437722
===[
Measured and Indicated Resource increase to 229.48 Mt at 38.76% Fe, from 176.7 Mt at 39.75% Fe
Inferred Mineral Resource increased to 46.76 Mt at 36.20% Fe, from 8.7Mt at 36.9% Fe
]===

which I make as:

Before: 176.7Mt * 39.75% + 8.7Mt * 36.9% = 73.45Mt Fe (wet)
After: 229.48Mt * 38.76% + 46.76Mt * 36.20% = 105.87Mt Fe (wet)

Increase: (105.87 - 73.45) / 73.45 = 44% (49% if based on tonnage alone)
(Can someone check that, Kiran said 48%)

So ball park potential increase in mine life might be:

14 years (historical) * 1.21 (2020 uplift) * 1.44 (2022 uplift) = 24 years.

10 years at $600m revenue per annum and you start to realise why this integrated project was once valued at $3.2B

Of course we'll likely have to wait for the ORE/PFS to see what they've actually converted to reserves, but no way it'll be the historical 14 years. Likely in the 15-20 year range IMHO, multiplier territory. Looking forward to seeing that NPV - I'm expecting into the billions but anything above $660m will likely surprise the wider market - not us though. Surely! ;-)

Ob.

Sure @Bannor - the reddit comment I linked to has the corroborating link which is to this:

"Cadence Minerals excited as first phase of Amapa Iron Ore Project completes (Interview)"
https://www.reddit.com/r/CadenceMinerals/comments/sngah2/comment/hwcyu42/
===[
At the moment, they’re settling in and they’ve priorities that need to work on with that asset and we are in conversations with them so we’ll see what happens.
]===

If you don't like following links, he said it about 11 minutes in to the February 8th interview.

With my rosy glasses on I'm guessing if we are in conversations with them now, it will be to sell, which means he's better off saying as little as possible on that front! ;-)

He said "hopefully" not "expecting". Apologies. I've edited the reddit comment. Let me know of any others!

"Hopefully see a revaluation due to great prospects and locality to Core Lithium's assets."