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@Dallas. I'll be interested in your views of which scenario you think is most likely related to the CapEx raise in the light of what was disclosed in the JRP.

If it's fully as you think, which it very well may be, it suggests that even after raising $112.5m of CapEx (27.5m equity + $85m debt) that we keep a minimum of 27% of PBA with a possibility of increasing to 49% if IndoSino isn't able to fund the equity element alone and we choose to help. If this is the case @Kiran really must do a better job of relaying it to the market! Then again, allowing some to believe we'll be diluted at the CapEx raising stage probably let him and the BoD buy in cheaply... Me? Suspicious? Of our BoD? I think a bit of @Bannor is starting to rub off on me. lol.

@tomcat. The "should" in this line from the end of August RNS: "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." is leading me to think either of what you or I are suggesting is possible, with a leaning towards yours being the default position with a fall back towards mine if Indo is unable to provide the funds alone.

I see the logic in what you are suggesting now. However I would have thought it more likely that the JV would be used for this purpose. Especially since @Kiran has mentioned an equity raise at project level on multiple occasions. And $24m seems about right given how much debt we are looking to raise, which according to DIP Finance C is at least $85m.

Correct - but it would still be considered a separate entity - with all that debt and loans etc. I suppose the healthy interest rate might be why it's possible Sino will be willing to loan the money to DEV instead of via the JV? It's good speculation - but do we have evidence for either suggestions?

If I've understood correctly you are suggesting that Indo will get $3.5m from us, and they will find $24m from somewhere else (potentially from selling PBA shares), which together makes $27.5m which they loan to DEV (DIP Finance B). I suppose that's possible, although I don't understand why they would be willing to do this and not via the PBA JV. Do you have any evidence to suggest this?

I'll have to think about what you are saying some. It doesn't stack up to me with what you are suggesting. There is the $24m equity noted in the corporate presentation. $3.5m from KDNC and $27.5m mentioned in DIP Finance B. How do you see those things fitting together?

By the way @tomcat: "1. is a payment from kdnc to indo... for 7% of their 80% pba... imo..." I thought that initially. Now I don't. It would make little sense done that way. I see it as a mini equity raise, before the main one, probably done at the same company (PBA) valuation.

So what I'm now suggesting now seems likely? Also, I'm reasonably certain I've arrived at $6.5m before, which means I must have seen $24m before. But where!? Did we deduce it related to implied debt:equity ratios for the estimated CapEx requirements net iron ore shipments perhaps? It's always good to get the same answer from different angles! :-)

Cheers @tomcat. I've had a bit of a think, and I now think it's unlikely that Sino is on the hook for further funds to maintain their holding % of PBA as surely we would have heard. Therefore I think the following sequence of events are planned once the conditions for DIP Finance B have been met:

1. We give the JV company (PBA) $3.5m in return for a further 7% of it taking our holding to 27%, valuing it at $50m.
2. At some point a bit later (before the end of the year according to corporate presentation timelines) PBA then raises $24m by issuing shares in PBA.
3. This $24m + $3.5m is then loaned to the project (DEV) for capital expenditure as stated in DIP Finance B ($27.5m)
4. How much of PBA $24m buys depends whether the $50m valuation stands.
5. Unless there is further de-risking of the project between our $3.5m contribution and the $24m equity raise it's quite likely the $50m valuation of PBA would stand. Either way, for us to maintain our 27% we would have to contribute $24m * 27% = $6.5m.
6. We would also have first right of refusal to increase our holding to 49% as part of this equity raise, in which case a low valuation of PBA would suit us, aided by a decent SoA. :-)))

Shout if I've got any of the above calculations wrong! All seems quite likely given what I've read in RNS's and heard @Kiran say, and now complemented by the details in the JRP, but as ever it's all in my humble opinion. Do your own research.

Ob.

99.9% (the 3 is a miss OCR'd %). What's your take on the further $24m as part of DIP B @tomcat?

Cheers @macandrc. 51 minutes in. Curious that he also failed to mention the same asset @Kiran has also avoided mentioning recently. Surely a lapse of memory or deemed unimportant rather than suggestive of insider information?

@Ivy (hello!) - I've been following the situation quite closely. Unlike other operations in Brazil who have to mine, process, rail, and ship their produce, all we have to do is load it, meaning we should be relatively unaffected assuming the shipping lanes and ports stay largely open. At current prices/indexes one capesize shipment might be sufficient to net $10m :-)))

Indeed a lot hanging on Amapa:

1. USD to BRL to stay high.
2. Iron ore and premiums to stay high.
3. Shipping rates to stay low.
4. Deal with bankers to complete or (ideally) be ruled in our favour.
5. A favourable SoA to take us to 27% and possibly to 49% if decent enough.
6. And one for you: the BoD not to mess this up - or destroy sentiment by letting their mates in on the cheap.

If we pull those off, perhaps not even all points, we should be looking at a share price in the pounds IMHO.

Indeed @Bannor, and importantly high NdPr to TREO ratios (50%!). It's almost as if they had a little peek at the JV strike to confirm to themselves they should focus on their LV, but then: oh... lol.

According to @degsie on 19 Feb "Irelands have a target price of 44p and an unconstrained risk value of 168p. They are the company’s brokers which should mean they are aware of what’s going on. I have spoken to the researcher who prepared report."

The report is available at:

https://*********************/companies/uk/precious-metals/cadence-minerals

and starts with:

"Amapá – transformational and a potential company maker" (24 Sep 19)
https://*********************/companies/uk/precious-metals/cadence-minerals/research/whireland/amap-transformational-and-a-potential-company-maker/1cd417f2-1bdc-4021-bdd3-c11db4c2be30
===[
Cadence Minerals is at a crossroads with an extraordinary opportunity to gain a significant share in an advanced brownfield restart of an iron ore mine. The move from Investment Company to a company holding a JV in an operating mine (generating significant revenue, profits and cash flow) could be transformational for the fortunes of this AIM-listed junior. The Amapá iron ore mine was previously closed after a port failure during the last decline in iron ore prices. Before this it had been operat ....
]===

You have to subscribe to read research from the tree.

No.... A penny.

Take a read of the WHI report - they are suggesting over a pound if all goes well.

@Bannor. Having read the JRP and looked at the latest corporate presentation I'm currently of the opinion that the $3.5m to take us to 27% can be invested whenever we are able to/want to, but the intention being once the second set of preconditions have been met, at the earliest. However, it's not clear to me exactly when we are required by contract to provide the funds. It may not be until they are actually required which, according to page 15 of the corporate presentation looks to be towards the end of this year (Our $3.5m + $24m (presumably from Sino?) = the $27.5m stated in DIP Finance B), which might have slipped a little as the timetable slips. If the negotiations related to an SoA commenced recently then I'd say that is plenty of time to finalise a sale. One scenario is they announce an increase from 35ktpa which impresses the market allowing for their much delayed funding package to be competed, along with our (partial?) exit to help facilitate this.

I've a vague memory that the $24m has been mentioned previously somewhere. Does anyone have a recollection of this - in particular whether Sino was bound to contribute additional equity on completion of the second set of preconditions to keep their % holding of?

In summary @Bannor, I agree, let's wait and see - interesting times! :-)

Ob.

I'll be mightily impressed if you can make the tables in the appendix readable @Dallas! If you zoom in and then squint you can make out some of the entries, which suggests to me that if I can do it, a machine can probably do it too, and better! lol.