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@tomcat. I can't see any good reason why we would take our 20% up before we have settled with the banks. If the banks scupper the project (kill it or stall it sufficiently) then we can walk away and get our $2.5m back. This would not be the case if we take our 20% and then the project fails. We'll no doubt just end up joining the growing list of creditors...

LoL @Dallas. And here was me thinking you were fluent in Portuguese!

Thanks @Bannor! I think we are aligned in our views. Although my understanding is that the scoping study will be published before we need to contribute the $3.5m. If I recall correctly @Kiran indicated we have someone lined up and it will be released after the negotiations with the banks have concluded. So hopefully soon! Whereas the $24m is end of year/2021, by which time all manner of things might have transpired. Perhaps it will make financial sense for us to take our percentage holding to 49%, perhaps it won't. Hopefully by then Ganfeng will have finally announced to the world plans for >50ktpa, utilising more of our lithium and sooner than the market is currently anticipating, potentially at a time when lithium prices are starting to recover - we might even realise $24m through a (part) sale of our JV's (Sonora and/or Yangibana) :-)))

I wonder how the "first right of refusal " will work in practice? Because it's clearly in our interest that whoever wants the remaining 23% pays as much as we can command. e.g. if they say we'll give you $50m for it, and we say we'll match that, would they then bid higher until we could no longer match? And what happens if we say we'll match it, and they drop out and we find ourselves unable to raise the funds? i.e. we bidded them up (as it was in our interests to) but couldn't deliver?

Perhaps I'm getting ahead of myself. Let's get to 27% first and then have these discussions! LoL. :-)

Ob.

I suppose one reason why we might want to release it early from escrow is so that it can be gaining that 18% interest per year - assuming it's currently earning nothing. Perhaps it's earning 18% even in escrow? Might be worth clarifying with @Kiran.

@tomcat are you suggesting that we might be able to take our 20% of PBA whilst keeping hold of our $2.5m by leaving it held in escrow until an agreement with the banks has been made, and any other prerequisites we deem necessary to release it? I hadn't considered that. Seems unlikely, but I suppose anything's possible if agreements have been rewritten...

Assuming contracts haven't been rewritten my understanding of the plan from various sources (@Kiran, RNS's, JRP) is for us to only release our $2.5m once all the first set of preconditions have been met, taking our 20% of PBA. We could release it now if we wanted to, but that would be crazy IMHO until agreements with the banks have been made. Why would we do that? The point is if the project stalls/fails for whatever reason before we take our 20% ownership we can walk away with our $2.5m.

@Dallas - I don't know what your policy is on accepting typos to your translation. For what it's worth the case number was incorrectly scanned as: 1088747-75.2015.8.25.0100 when it should have been 1088747-75.2015.8.26.0100:

https://www.jusbrasil.com.br/processos/65368883/processo-n-1088747-7520158260100-do-tjsp

The point being at the stage of the $24m investment (end of 2020 or early 2021 by the sounds of it) Indo will control the project and therefore it will be them that decides if PBA needs further cash in the form of equity (to enable the debt aspect). The current plan is that it does (at least $24m according to the JRP), so this:

===[
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.
]===

could be interpreted as (my words):

"If Indo Sino determine that further equity is required into PBA as part of the CapEx funding, the agreement also provides Cadence with a first right of refusal to increase its stake to 49% in PBA."

which would mean we have first right over everyone IMHO. :-)

Actually I'm flip-flopping a bit now. The way it is worded in the RNS it could be that we have first right of refusal ahead of Indo Sino even...

@tomcat. In the light of your post and re-listening to @Kiran below:

"Cadence Minerals #KDNC - CEO Interview plus Q&A" (8 Jun 2020)
https://www.youtube.com/watch?v=mGhDQjFgP7k
===[
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.
]===

and this from the RNS in the summer:

"Approval of Judicial Restructuring Plan Paves the way for the Restart of the Amapá Iron Ore Project." (30 August 2019)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=2887382
===[
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.
]===

I think it is likely that Indo have first refusal to contribute this minimum $24m stated in the JRP to take (or maintain?) their holding at 73%, then it's KDNC, either way it looks like we will own at least 27% of the Amapa project :-)))

If I recall correctly @Dallas and @Bannor joined in last time we discussed this. What do you think this time round?

Ob.

(corrected)

If 1.39Mt is at the private port, where is the other 328kt (1.718Mt - 1.39Mt) located? At the public port? In the ground? At the mine? Somewhere else? Stolen?

guide = guide them to see what I'm seeing.

So long as we don't have another dilution event before the scoping study that suits me fine too @Dallas. I will help guide other LTH's though.

===[
1.1.30. "Indo Sino credit" : is the credit held by Indo Bell against the debtor, in the amount of USD 49,140,000. 00,
currently indicated in the list of creditors in the class of Unsecured claims, but subject to appeal so that it is
considered the pledge guarantee of 1.718, 338 tons of iron ore.
]===

If 1.39Mt is at the private port, where is the other 328kt (1.718Mt - 1.39Mt) located? At the private port? In the ground? At the mine? Somewhere else? Stolen?

(repost with updated link - and I've no ideas if typos now as I've not reread!)

Original source:
https://pje.trt8.jus.br/primeirograu/Processo/ConsultaDocumento/listView.seam
20012416350764800000023996777

Translation care of @Dallas
https://drive.google.com/file/d/1t_2GNdDBpqXrb9UszfuVFa63N6s_lHIA/view

The former includes 3 tables at the end which contain the financial projections of the project. It's possible to work out the exchange rate they are based on and from there pretty much all other aspects, including the BoD's assumptions in their news announcements. A tip: since the tables are very hard to read you might need to correlate the figures with other figures in a column or row, e.g. some column or row entries sum together, some rows are similar to other rows.

Good luck! And I'm happy to confirm or help guide towards useful information. First prize goes to the first to state the USD:BRL they used. :-)

Ob.

Perhaps if someone asked @Kiran really nicely he might share high resolution copies? Although part of me wonders if we should all STFU until agreement reached...?

LoL @Dallas, even I can't read those tables! ;-) But they are a good teaser for what you'd see if you downloaded the JRP from the horses mouth :-)

That's 33p from Amapa alone, pre-rehabilitation - I'd expect the contribution to potentially reach into the pounds at full production a few years from now. :-)))

In the light of additional information we received this week I thought it worth stating my updated opinion around the various financial contributions to the project:

Our $2.5m plus time and effort takes us to 20% of the JV
Our $3.5m plus time and effort takes us to 27% of the JV
Sino's $49.14m comes on to the book of the JV in return for circa 50% of the JV, leaving 23% up for grabs.
At this stage the JV is valued on paper at around $100m and has $55.14m debt on its books (primarily for tax purposes)

DIP (Debtor in Possession) Finance B envisages a total of $27.5m of new equity into the Amapa project. This includes our $3.5m (but not our $2.5m), leaving $24m to be found.

The remaining 23% of the company is valued around $23m, and this corresponds to the $24m within rounding distance.

The point being at this stage, on paper at least, our 27% is valued circa $27m and assuming all is going well at least this value should be contributed to our market cap.

But here is the kicker, those valuations are likely based on iron ore prices and exchange and shipping rates significantly less favourable than today's, meaning that the remaining 23% of the JV up for grabs is likely going to be more valuable than $24m. This is both good and bad for us. The way I see it if it's only us in the running, then we'll be able to take our holding to 49.9% for $24m. However, if others want to get their hands on some of the project they may be willing to pay more - perhaps they'll be willing to pay twice as much, three or four times even (which we can match)? Whatever is paid at the time the market will then use that value to place a value on our 27% - if it's twice, that would value our 27% at $54m.

Feels like a bit of a win-win setup doesn't it :-)))

All predicated on Amapa coming good...

Ob.

It's not my consent. Whoever supplied the translation must have pulled it. Which is fair enough, it was provided to long term holders after all in return for sharing research at the time.

Original source:
https://pje.trt8.jus.br/primeirograu/Processo/ConsultaDocumento/listView.seam
20012416350764800000023996777

Translation with a few typos:
https://drive.google.com/file/d/1PIZkcZWuXj_pXvRFRuqNj0nrKud3ffQR/view

The former includes 3 tables at the end which contain the financial projections of the project. It's possible to work out the exchange rate they are based on and from there pretty much all other aspects, including the BoD's assumptions in their news announcements. A tip: since the tables are very hard to read you might need to correlate the figures with other figures in a column or row, e.g. some column or row entries sum together, some rows are similar to other rows.

Good luck! And I'm happy to confirm or help guide towards useful information. First prize goes to the first to state the USD:BRL they used. :-)

Ob.