Member Info for observer842

(Forgot to add the most important new one!)

Satellite links:
Shows a cargo ship at port on the 22nd July:
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

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

Port links:
http://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/

Agreed @Bannor. Thanks for sharing your views.

I notice the issue of a comma in links has yet to be resolved... Copy and paste links with a comma in!

Cheers @MLQ. The resolution on those Apple maps on satellites pro are impressive! Shame we don't know the date (we probably could deduce, not me though!). I've added them:

Satellite links:
Shows a cargo ship at port on the 22nd July:
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

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

Port links:
http://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

Initially I didn't want to bias anyone's opinion by saying what I thought was likely to be the case in the details of the agreement with Sino, but I might as well now say it:

I suspect that the JV agreement with Sino is such that should Sino decide not to provide the $24m itself, then KDNC is responsible for arranging the $24m. We can either do this our self taking our holding to 49%, or arrange for someone else to come in at the 22% level as a new JV partner. However, if we don't fund it our self, and we are unable to find someone willing to, *then* Sino has a right to take our 27% holding from us for $9m over the following 12 months. This is all based on us reaching 27%.

Does that sound feasible given what we know @Bannor? It's what I based increasing my investment on...

This is the key bit which swung it for me (I used to see it how you saw it): "Now that can be a new partner going into the asset, at the asset level, so we'd still have our 27%."

Interesting view @Bannor (and why I'm glad to have raised this issue today). I'm personally rating that scenario at the 10% level. Presumably you are rating it above 50%? Certainly worth clarifying! @Kiran?

Which site are you using @MLQ? I've added mine to the list:

Ship at port on the 22nd:

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

Port links:

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

@Barksy, you seemed to have brought the share price down by 0.2p - fortunately my post brought it back up! LoL ;-)

I suppose the scenario I'd like clearing up @Bannor is the one where assuming we get to 27%, we subsequently choose not to exercise our right of first refusal to go to 49%, instead letting a new partner come in at the 22% level for $24m. But because we didn't exercise our right, Indo now have the right to take our 27% from us for $9m. Just doesn't seem like that would be the case to me, but the RNS seems to imply that it is possible. However when I heard @Kiran in the interview suggest we'd still have our 27% in this scenario that was enough derisking of the possibility my mind for me to further increase my holding. Though it still weighs on my mind a little, perhaps at the 10% likelihood level. As I say, there is more to the agreement than meets the eye IMHO, but overall I think we are onto a multi-bagging winner if the price of Iron stays high (above $60-80/t) the next few year! ;-)

Thing is @tomcat, something doesn't seem quite right, like we haven't been told the full picture: Cough up $24m for an additional 22% of the company or we might take your 27% for $9m. There's more to this than meets the eye if you ask me.

Oh yes. I remember increasing my holding substantially off of the back of this quote so it better be true!

"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.
]===

Indeed @tomcat. The corporate presentation lists what we want to see happen before we release our $2.5m and take 20% of the JV. Agreement with the banks could land any time now.

Of course that's not suggesting that our involvement in the project is likely to be successful with 99% certainty, there are other things which could go wrong! LoL.

Actually, the more I think about it in the light of recent events that 5% might actually be more like 1%. LoL.

@Bannor. "why have you now changed your mind on this??" I see this interpretation a lot on LSE boards when posters attempt to raise the other side of the coin for discussion. Let me be clear: I have changed my mind very little on the issue since April. I believe quite strongly what we discussed back then to still be the case. Perhaps 95% so. i.e. it is unlikely that they will be able to pull themselves out alone. This 5% nagging doubt I raised today was to air the issue, and to see if others might agree more strongly with this nagging doubt than I. I hope that clarifies my position? :-)

@Bannor I guess what I was getting at was that in the worst case scenario (OK there could be more worse case scenarios!) that we never get to agree with the banks and the court fails to rule on the issue, that DEV will have the funds available to produce and publish the feasibility study, which would trump the scoping study.

Cheers @Cause. The DEV/Zamin/whoever going alone really is a tiny doubt, but if I'm thinking it, some others in the market will be too. Looks like we agree on the 27% to 49% aspect. But it would be nice to be told. In an interview, Kiran indicated that once we have the 27% that is ours to keep... @Dallas probably has the quote! LoL.

I forgot the other relevant paragraph...:

===[
Should Indo Sino seek further investors or an investment in PBA the agreement also provides Cadence with a first right of refusal to increase its stake to 49% in PBA.
]===

Put together, the two seem to imply that Sino may fund the additional equity element themselves ($24m), but if they don't then we'll have to fund it taking our holding from 27% to 49%, failing which Sino can take the lot from us for $9m.

As we've previously discussed that would likely value the whole at around $110m, which depending on the progress of the project and iron ore prices at the time, the market may or may not agree with. Hopefully raising $24m to take our holding from 27% to 49%, given the option, will be a no brainer at the time, ideally supported by a market cap multiples of this! And doubly ideally taken as a loan rather than dilution :-)

Since it's the weekend... I thought I'd share a small, but not insignificant nagging doubt. Is it possible that DEV could pull themselves out of this on their own, meaning that our JV never gets assigned 99.9% of it, making it pointless for us to ever take our 20% holding in the JV?

Another nagging doubt it would be nice to have cleared up. Assuming we get to 27%, under what scenario might this be taken away from us? I'm referring to this:

"Approval of Judicial Restructuring Plan Paves the way for the Restart of the Amapá Iron Ore Project." (30th Aug 2019)
https://www.lse.co.uk/rns/KDNC/cadence-minerals-plc-approval-of-judicial-restructuring-plan-amapa-omqcte36gtcervm.html
===[
To acquire its 27% interest Cadence will invest US$ 6 million over two stages in PBA. The first stage is for 20% of the PBA the consideration for which is US$2.5 million. The second stage of investment is for a further 7% of JV Co for a consideration of US$3.5 million. If Cadence is unable to complete the second stage of the investment or not exercise its right of first refusal under the terms of the Agreement, Indo Sino will have a twelve-month option to buy the shares in JV Co held by Cadence for 1.5 (1 ½) times the price paid by Cadence for such shares.
]===

Because it reads to me that we are expected to go to 49%, and if we don't, our 27% may be taken off us for $9m. This is both exciting and concerning! LoL ;-)

Ob.

Interesting that $3m from the $10m is earmarked for the feasability study.