Member Info for observer842

And just a reminder of this:

"Zamin: A disastrous operation in Amapá. Judicial recovery is the solution!" (April 28, 2017 )
https://tribunaamapaense.blogspot.com/2017/04/zamin-uma-operacao-desastrosa-no-amapa.html
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Santana's promoter of the Environment, Adilson Garcia, concludes by saying that if we opted for BANKRUPTCY DECLARATION, it would be highly damaging because Banco Intesa Sanpaolo has a fiduciary alienation agreement on top of the US $ 135 million stocks, Banco ABN AMRO BANK has a pledge of $ 50 million dollars and GERALD METALS owns $ 400 million in ore stocks, estimated at four million tons (2.8 million in the yard in Santana and 1.2 million in Pedra Branca do Amapari ).
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I believe this 4Mt is in addition to the 1,718, 338t Indo Sino have claim over (JRP 1.1.30) of which 1.39Mt is stored at the private port (30th August 2019 RNS)

@Cause - I'd keep your initial estimates as broad brush as you can initially. Present all your assumptions.

Perhaps start with presenting your calculation for 10% Present Value of an EBITDA $136m from 2024 to end of project?

There is a question mark over the assumptions behind the $136m EBITDA stated in the 30th August announcement.

As to the JRP, I haven't disclosed what exchange rate and price per tonne I deduced for 62% and 65% Fe. Just to make your life easier I'll let you know that I believe they used $61/t for 62% Fe (which is what we hoped would be the case!) - and it's currently over $100/t :-))) You should be able to deduce the other values...

Ob.

"Mexico may only expropriate property in case of public interest and on a non-discriminatory basis"

An argument could be made that if the country piled its resources into the project at this stage in the run up to exponential Lithium demand it could very much be in the public interest that they took ownership to ensure their lithium supplies stayed in country, and especially so if they could get it at anywhere near BCN's current market cap.

Though presumably "non-discriminatory basis" would work in our favour?

For the avoidance of doubt - I'm against this!

"Mining in Mexico" (July 18 2018)
https://www.lexology.com/library/detail.aspx?g=e4db032c-8d2e-4360-a9c8-df86b0f6be59
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Government expropriation of licences

Are there provisions in law dealing with government expropriation of licences? What are the compensation provisions?

In the case of mining concessions, certain government authorities (ie, Environmental Ministry, Communications and Transport Ministry, Agrarian Ministry and others), because of an event of national security or public interest, may decide to revert the concessions granted to private parties (the Reversion Decision). The Reversion Decision decree shall include the general rules to determine the consideration to be paid to the concession holder and the investments made in the concession. The depreciation of the expropriated assets, equipment and facilities attached to the mining concession shall be considered in order to calculate such consideration, through the payment of a fair market value compensation.

If the affected party agrees with the amount of consideration payable, it shall be final. If not, it has the right to file a claim before a Mexican court, which will take the final decision.

In accordance with the North America Free Trade Agreement (NAFTA), Mexico may only expropriate property in case of public interest and on a non-discriminatory basis. In such events, expropriations will require a fair market value compensation, including accrued interest. In the event of any violations of NAFTA and international laws, investors have the right to international arbitration.
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Great links @Barksy. Well worth a listen to the interview. His thoughts mirror mine very closely. As to the nationalisation of Sonora, I wonder how much we'd get for our 839kt of LCE *reserves* with an in ground value (based on $7,500/t) of $6.3B? ;-)

https://www.cadenceminerals.com/projects/sonora-lithium-project/

Who the hell is @Bannor again!? LoL. May be you both need to say that one magical word? ;-)

Was this here previously?

http://www.cadenceminerals.com/wp-content/uploads/2020/06/Yangibana-Project-Layout-Plan.png

It nicely shows the size of Yangibana North :-))), but also how little they currently plan to mine from Yangibana.

@Cause: I've not gone through the page with a fine-tooth comb, but it looks correct. In particular M09/161 (aka Bald Hill North) is now included :-)))

I agree, the current focus is on Amapa, but for the benefit of newcomers looking in we should make sure that our shop window is up to date and correct. Additionally our focus could quite quickly shift to Sonora or Yangibana, e.g. if BCN announce in writing they are planning on making more use of our JV area, or Hastings announce full funding and start of construction, or lithium prices, or NdPr prices start to rise.

We have lots of metals in the fire :-)

Ob.

Correction: "For a discount rate of 0% you simple divide *30% of the* blue colour by the total to get this proportion. ;-)"

@Cause, once you understand present value, you should be able to have a go at estimating the approximate proportion of the NPV of the project attributable to our 30% of Yangibana North from this diagram which possibly wasn't included before the update:

http://www.cadenceminerals.com/wp-content/uploads/2020/06/Targeted-Yangibana-Project-Annulised-TREO-Production-Targets.png

Hint: calculate a hypothetical cash flow from each of the years based on the total in each year and discount it to the present. Then do the same for just the area we own - the largest blob of blue on the right. I'd use discount rates in the range 5 to 12% to see how the proportion of the NPV varies. For a discount rate of 0% you simple divide the blue colour by the total to get this proportion. ;-)

Of course it's only a rough and ready approach, but it'll give you a feel for the current value of the project to us, and you might tentatively relate this to HAS's share price in some way, to then determine what you feel the contribution to our share price should be from this project. Perhaps I'm getting ahead of myself. LoL. Good luck!

Ob.

As indicated, @Kiran has updated our Yangibana page. That was quick!

http://www.cadenceminerals.com/projects/yangibana-rare-earth-project-2/

and I think our Sonora page too:

http://www.cadenceminerals.com/projects/sonora-lithium-project/

Every time I see that 839kt LCE of mineral *reserves* attributable to us I get a warm glow :-)))

I'm happy to field any questions on either of these assets @Cause

Ob.

@Bannor. In the light that you are open to be persuaded: "unless something/someone proves my reading or interpretation inaccurate or wrong" (which came as a bit of a shock to me LoL!) it tickles my curiosity what is the minimum number of words @Kiran could say to you that would do the job. Could it be as few as one? What one word would it be? Could it be? LoL!

Those weren't questions to you, they were questions to me, and to the comedians on here ;-)

@Bannor: "Obs.... I rather got the impression from MrsB reply that Kiran was confirming that the JV area wasn't being drilled at this time but rather HAS used the name of the region (covering more than one licence area) rather than the JV licence."

I think I see what you mean, and if that is the case then I think @Kiran has misunderstood the announcement. The announcement says:

https://www.asx.com.au/asxpdf/20200618/pdf/44jr0mx0gs47nc.pdf
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"The aim of the RC drilling is to target immediate extensions to the Bald Hill, Frasers, Auer and Yangibana Rare Earth Deposits, with the aim of adding tonnages to the Mineral Resource and additional mine life. This drilling is designed to initiate systematic testing of large strike extensions of the prospective ironstones that have never previously been tested."
]===

and it is clear from the diagram that these immediate extensions to Bald Hill protrude into our JV area. In fact I would estimate between a quarter and a third of the extensions in the Bald Hill area will be in our JV, so it is almost certain there will be some drill holes going into our JV. Therefore I don't think it is correct to say: "While the drilling does not include Cadence license areas", although I might have been placated with: "While the drilling does not necessarily include Cadence license areas" :-)

Anyway, we know what we know, and we also now know that @Kiran knows what we know and that we own 30% of M09/161 (aka Bald Hill North) - so when Hastings do announce drill results from that area we should get to hear about it in an RNS.

They have started drilling (not sure where) so we should get the first results within a few weeks/month or so. Fingers crossed!

Ob.

Although I would argue against this: "Although it would be tempting to say that they are going to drill on those areas – at the moment Hastings have not indicated that this areas represents part of the drill plan." as the legend at the top left of page 2 of: https://www.asx.com.au/asxpdf/20200618/pdf/44jr0mx0gs47nc.pdf says "Drilling Areas" :-). But let's leave it there. Win, win and all that ;-)

That's great @Barksy & @Kiran! Nicely clarified. We still have M09/161 (aka Bald Hill North). So there is a possibility over the coming months we will see reports that they have drilled our JV area. Nice. :-)))

My understanding was that it was Bald Hill North, which is why I think it's likely that a previous omission has come back to confound @Kiran when he looked up what we owned.

But I could be wrong!

Just for you @Bannor: "During the year ended 31 December 2019 the company disposed of a variety of its shareholdings, including its reamining holding in Bacanora Minerals Limited."

And I refuse to correct that typo! :-)

LoL. I suspect a certain poster will go to his grave before congratulating the BoD! LoL! ;-)

By the way @Cause, I'd take some of the timelines with a large pinch of salt, especially since we are already 6 months behind original schedule!

@Frankie. The annual report is what we received this morning. We (I!) am waiting for the court decision, but we were told today that movement from the private port to the public port has commenced, which was a nice bonus! :-)))

@Cause: "@obs - the timelines of the shipment, commissioning studies and mine being in full production. Do you read into in a similar way to I do? Especially the 2 year shipping period referring to the whole of stockpile rather than the court authorised $10 million net?"

Yes. The whole 1.39Mt stockpile is intended to be shipped over an 18-24 month period (RNS 30 August 2019), the first $10 million net should be completed in just a few months at the current iron price... Production of new ore: start 2022. Ramp up to full steady state production by 2024:

"Results for the year ended 31 December 2019" (26 June 2020)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=311428203815111478
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The reconstruction is estimated to take approximately 18 months, which based on current estimates would mean the start of full operations in the first or second quarter of 2022.
...
The current 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. Currently steady-state production is expected to be reached in 2024.
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