Member Info for observer842

Ah, that's better! Same place next year? LoL. :-) Yes I know: you don't *plan* on being invested this time next year... ;-)

Can I mention that after a bit of a wobble earlier in the week, iron ore prices finished above $110/t? ;-)))

http://www.custeel.com/en/csi.jsp
===[
Date Seaborne index 62% Fe fines Seaborne index 65% Fe fines
2020-07-31 111.75 122.75
2020-07-30 110.95 121.95
2020-07-29 110.75 121.85
2020-07-28 107.95 118.85
2020-07-27 107.75 118.55
2020-07-24 109.35 120.15
]===

LoL! I reminded you of the explanation here - I'm not going back any further! :-) (I hope you are taking this in Friday jest!)

observer842@6 Mar '19
===[
As to the £1.6m charge. From the 2016 accounts: "Profit before taxation was adversely affected by a one-off financing (£1.6 million) charge associated with the issue of warrants linked to the US$15 million convertible loan note issued during the year." Don't you remember we uncovered the meaning of this in the past year? That's the value of the warrants (determined by standard means) we had to add to the books as a loss (which is good for tax purposes!). Put another way, that was the fair value of the warrants to the holders to entice them to lend. In practice practically zero warrants were issued, so that £1.6m was meaningless in effect (other than potentially reducing our tax liability). I questioned whether it needed to be added back to the books in the event of the warrants expiring. I never got an answer, but I think it's no in hindsight.
]===

@Bannor. "From my recollection the £1.5M was a cost/fee we had to pay in the U. S. otherwise the loan wouldn't have been able to occur..... " Correct, this was your incorrect understanding which you finally, after much debate, accepted was not the case. I can't be bothered to look it up either! LoL. ;-)

However: "regardless we're still a lot worse of overall as a result of the loan than we would have been without it in my opinion" - we over-leveraged our Lithium play (IMHO), and unless it is told to us in black and white what benefit that brought to our Sonora JV's, then I agree with this sentiment.

@Bannor. Pretty sure last time we went over this you accepted that the £1.5m was a benefit to us, not a cost, albeit an accounting one. Please don't make me go over this again LoL! Somehow I think that's not going to happen. You find the line in the accounts and I'll explain what it means. ;-)

@MLQ. Doesn't sound good. That site is down at the moment. Can you elaborate?

You're absolutely right @tomcat: we don't know the reason for the slip. As you noted, it's a bit odd that there's now an almost 3 week gap after the ship currently in port sets sail and ours is due to arrive. Still, I'll sleep easier at night once I see a name on our ship! ;-)

Silver lining wise, with this delay the odds must have increased substantially in favour of agreement with the banks being announced before first shipment sets sail. :-)))

@Frankie. It looks to me that DEV have put in a tentative port reservation, and to the best of my knowledge this has slipped twice now, the most recent in the past hour by around 2 weeks. As @Bannor says, until we get a name on that ship I'd say it's subject to further slips.

I've just posted some news...

For posterity:

http://serveporto.com.br/macapa/
===[
VESSEL ETA FAZ ETB ETS CARGO TYPE AGENCY PORT OPERATORS QUANTITY DESTINATION
MIEDWIE 22/07 25/07 31/07 SPC ALPHAMAR CIANPORT 28.000 GERMANY
TBN DEV 20/08 20/08 25/08 IRON ORE TBN NORTE TRADING 45.000 CHINA
TBN CIANPORT 26/08 26/08 1º/09 SOYA TBN CIANPORT 30.000 TBI
]===

Says 20/08 to 25/08 now...

https://esaj.tjsp.jus.br/cpopg/show.do?processo.codigo=2S000I22C0000&processo.foro=100&processo.numero=1088747-75.2015.8.26.0100
===[
07/28/2020 Referred to DJE
]===

It's a long read! Suggests to me the shipping of the ore is still going ahead :-)))

Excellent confirmation @MLQ!

Satellite links:
Shows ships at port on the 27nd July:
https://apps.sentinel-hub.com/eo-browser/?zoom=18&lat=-0.06071&lng=-51.16732&time=2020-07-27&preset=1_TRUE_COLOR&datasource=Sentinel-2%20L2A

High resolution, but unknown date:
https://satellites.pro/Brazil_map#-0.061670,-51.167402,19

Port links:
https://serveporto.com.br/macapa/
https://www.myshiptracking.com/
http://www.docasdesantana.com.br/index.php/component/content/article/13-informacoes-operacionais/programacao-de-navios/308-ano-2020
https://www.vesselfinder.com/

@Barksy Thanks for asking @Kiran! Much appreciated. Also thanks @Frankie, for thanking @Barksy profusely on my behalf! ;-)

It's since occurred to me that if it is as I feared, I wonder if the agreement caters for us buying the 22% on behalf of one or more third parties, and then selling them the shares so that we have then technically exercised our first right of refusal should we need to. Perhaps we achieve slightly more than we paid, perhaps we achieve slightly less. Perhaps lots more. Depends on the demand!

To save people having to look back, this is the question that @Barsky has asked @Kiran on my behalf, which I presume we have yet to receive a reply. Perhaps the answer is deemed potentially price sensitive at this (hopefully!) critical time. :-)

===[
Assuming we have reached 27% ownership of the JV with Indo Sino, and we reach the point in the project where additional equity is required. If Indo deem that $24m is required and decide to offer that to KDNC in return for an additional 22% of the JV company, but we decide to allow someone else to take up the offer instead, which they do immediately resulting in: Indo 51%, KDNC 27%, New partner 22%, does Indo have the right over 12 months to take our 27% from us for $9m against our will?
]===

The reason is because I believe these things are best posted from a trusted third party who has been verified in person. Surely you wouldn't believe any answer I purported to be from @Kiran? I know I wouldn't if I were you! ;-)

I personally think it would be quite disappointing if the BoD signed up to an arrangement whereby if we let a third party in at the 22% level for $24m, rather than taking up the option ourselves, effectively valuing our 27% at $29.5m, we could face our 27% being taken from us for a fraction of this value ($9m). I've always thought it odd, and when @Kiran talked about additional partners in the JV being a possibility I decided that wasn't what was meant in the RNS: instead Indo's option to take our % holding for 1.5 times what we have paid to date, being triggered if no one provided the funding, i.e. the project was stalling and unable to meet funding requirements for whatever reason.

We'll have to agree to disagree on whether this is the case or not. Though it pleases me a little that others seem to not see it as I do, perhaps the majority of the market even? as it takes at least two to tango a market. Hopefully @Kiran will clarify one way or another! ;-) @Barksy?

Ob.

Cheers @MLQ. The link you shared:

https://eos.com/landviewer/?lat=-0.05278&lng=-51.18850&z=16&side=L&id=S2B_tile_20200722_22MDE_0

is of the same satellite (Sentinel 2) as the one I've been using, which is free to use (your's required sign up after so many clicks):

https://apps.sentinel-hub.com/eo-browser/?zoom=18&lat=-0.06071&lng=-51.16732&time=2020-07-22&preset=1_TRUE_COLOR&datasource=Sentinel-2%20L2A

so I think I'll stick to that. Also, I couldn't work out how to change the date on yours, where it's simple on the above link.

Cheers though - and keep the links related to port watching coming! The tension's building, or is that excitement!? ;-)

Ob.

@Frankie - That's certainly one scenario. e.g. we issue new shares in KDNC for the required funding, allowing this partner to come to the Amapa project within KDNC, perhaps at the 20-30% level - depending on our market cap at the time. But that's not the scenario I am wanting clarity on.

@tomcat & @Dallas I think (hope) the $9m 12month option is related to the scenario where *no one* funds the project on the required timelines. The point being that we may at that point want to sell our stake for considerably more than $9m, but would be unable to for 12 months, as Indo have the right to buy it for $9m over that period.

If someone does ask @Kiran, it might be worth sharing this with him:

"Cadence Minerals #KDNC - CEO Interview plus Q&A" (8 Jun 2020)
https://youtu.be/mGhDQjFgP7k?t=541
===[
Then we'll be looking for project funding, on or around 2021, $24m, that'll be project equity. Now that can be a new partner going into the asset, at the asset level, so we'd still have our 27%. Of course you know we could go up to 49%, it really depends on the economics - the great thing is we have choices here.
]===

Perhaps someone with a hotline to the BoD can ask the following? @Barksy?

Assuming we have reached 27% ownership of the JV with Indo Sino, and we reach the point in the project where additional equity is required. If Indo deem that $24m is required and decide to offer that to KDNC in return for an additional 22% of the JV company, but we decide to allow someone else to take up the offer instead, which they do immediately resulting in: Indo 51%, KDNC 27%, New partner 22%, does Indo have the right over 12 months to take our 27% from us for $9m against our will?

Ob.

Just in case you are interested @Bannor (I know someone will be even if you aren't ;-)), this also swung me to my view that we are responsible for raising the full $30m of DIP A + B, but can get others on board if we choose not to ourselves. And should we fail to raise ourselves or get a partner on board, then Sino can take our percentage holding for 1.5 times what we have contributed so far:

"Cadence Minerals #KDNC - CEO Interview plus Q&A" (8 Jun 2020)
https://youtu.be/mGhDQjFgP7k?t=1225
===[
The next tranche is $3.5m to go to 27%. I personally think that we will do that ourselves, because unless something horrible happens with iron price or there's something drastic happens with the project. Where the project stands now, there is considerable value in investing that money and getting up to 27%.
]===

He goes on to say more related to the 27% so it's worth a re-listen. The key phrase is "I personally think that we will do that ourselves". Though I suspect in your view it simply means that if we don't do this, and someone else does, even if arranged by us, Indo could still take our 20% from us... Definitely worth clarifying. @Kiran!? LoL. I think you've wobbled my 10% to 20%. LoL.