Member Info for observer842

Take a look at page 9 of the latest corporate presentation for the preconditions:

https://www.cadenceminerals.com/wp-content/uploads/2019/07/Corporate-Presentation-KDNC-June-PPT-PUBLIC.pdf
===[
US$ 2.5 m Investment (Key Preconditions)
• Railway license for a minimum of 16 years
• Approval of the Judicial Recovery Plan – inclusive liability cap & maintaining payment agreed in 2017 restructuring plan
• Pursuant to the Judicial Recovery Plan JV Co holding not less than 99.9 per cent of the fully diluted share capital of Dev Co
• There being no restrictions, penalties, embargos, sanctions or liens over the licences and the Dev Co being able to conduct its
operations under those licences freely and without any restrictions;
• A deed of priority being entered into between JV Co and the Dev Co and any other secured creditor of Dev Co

US$ 3.5 m Investment (Key Preconditions)
• Fulfilment of the above conditions;
• The Dev Co being granted the necessary environmental licenses (or those expired environmental licences currently held by Dev
Co being renewed) required by Dev Co to conduct its business and/or operations in respect of the mineral assets
• There being no restrictions, penalties, embargos, sanctions or liens over the licences and DevCo being able to conduct its
operations under those licences freely and without any restrictions
]===

When the first set of preconditions are met our $2.5m will be released from escrow and we'll own 20% of the project.

@Frankie. We will own 20% of the project when the preconditions have been met. They have yet to be met so therefore we currently own 0% of the project. The fact the iron ore is potentially gearing up to be shipped is IMHO a very good sign that the preconditions are close to being met. How close? No idea, but hopefully this month :-)

@degsie. It might be nothing, it might be artefacts of the image/light, or it might be something. We know the iron ore stock piles are bluish as they have been oxidised. The sequence of images perhaps show that the water vessel at the private port changes colour from white (empty?) to blue (loaded) and that it comes and goes.

It's all a bit circumstantial but this might suggest that the iron ore is being loaded onto a vessel further up the Amazon ready for first shipment. This would coincide with what we were told in August:
===[
The sale of approximately of 1.39 million tonnes ("Mt") of stockpiles currently held at the port owned by Amapá. Planned shipment of stockpile commencing in December 2019.

It is estimated that these stockpiles have a net realisable value of approximately US$ 60 million, which will be reinvested in the restart of the Amapá Project.
]===

Please note: we currently own 0% of the project.

Ob.

@Barksy. If you want a good zoom in take a look at:

https://www.bing.com/maps?osid=e57ba001-09f1-49f4-bd10-29430f0efd1e&cp=-0.052341~-51.18183&lvl=19&style=h&v=2&sV=2&form=S00027
https://binged.it/2s4v21f

Look what's back:

https://apps.sentinel-hub.com/eo-browser/?lat=-0.05032&lng=-51.18505&zoom=16&time=2019-11-15&preset=1_TRUE_COLOR&datasource=Sentinel-2%20L2A
https://apps.sentinel-hub.com/eo-browser/?lat=-0.05032&lng=-51.18505&zoom=16&time=2019-12-05&preset=1_TRUE_COLOR&datasource=Sentinel-2%20L2A
https://apps.sentinel-hub.com/eo-browser/?lat=-0.05032&lng=-51.18505&zoom=16&time=2019-11-30&preset=1_TRUE_COLOR&datasource=Sentinel-2%20L2A

and it's a different colour :-)

or bought on market after each placing @tomcat? I don't think Hanwa have ever declared going below 10% (or was it 9% they'd have to declare crossing? ;-)) - perhaps they never did and are still at 10%?

Whilst I've got my perhaps cap on, I'm wondering if there are 4 corners to this stone. Igneous Capital Ltd, currently @4.43% might also be let in @25p to take them to 10% along with Hanwa - if they are in fact still at the supposed 5.53% and just not declaring threshold crossing for whatever reason.

The more placings we see at @25p the more it feels like a pre-agreed short down from the highs. The agreement being along the lines of: we let you in @25p to your % target on the proviso you maintain this % on the final joint capital raise.

My belief is that we'll see quite a re-rate on this share when it becomes crystal clear the full CapEx has been or is about to be met: re-rates on anticipation is rife on AIM. This could be next week, next month, or indeed any time next year (or beyond!). I'm expecting towards the VSA target of over a pound.

Just musings, no math(s), although if anyone has any (non rude) calculator requests I just might oblige? Lol :-)

Ob.

As ever there are lots of uncertainties, but bearing in mind this is speculation after all it's interesting to make some educated guesses and work through some "what if's". So what if Hanwa's budget is $25m with an expectation/agreement they'll end up with 10% of the fully funded project?

If the scenario is that x amount is raised on market at a particular share price first, followed by a joint placing between the cornerstone investors at this same price (or everything happens simultaneously at the same price) to take them to their agreed %'s, 10, 19.9, 29.9, then if they are wanting to raise $100m, I make this the set of equations to solve:

https://www.emathhelp.net/calculators/algebra-2/simultaneous-equation-solver/?s=12.3+%2B+h%3D0.10+*+%28222.98+%2B+h+%2B+g+%2B+m+%2B+x%29%2C+57.6+%2B+g%3D0.299+*+%28222.98+%2B+h+%2B+g+%2B+m+%2B+x%29%2C+44.4+%2B+m%3D0.199+*+%28222.98+%2B+h+%2B+g+%2B+m+%2B+x%29%2C+s+*+%28h+%2B+g+%2B+m+%2B+x%29%3D100%2C+s+*+h%3D25&v=h%2C+g%2C+m%2C+x%2C+s

12.3 + h=0.10 * (222.98 + h + g + m + x), 57.6 + g=0.299 * (222.98 + h + g + m + x), 44.4 + m=0.199 * (222.98 + h + g + m + x), s * (h + g + m + x)=100, s * h=25

which results in some rather suspicious numbers...

h=16.66, g=29.00, m=13.24, x=7.7, s=1.500

h: Hanwa new shares
g: Ganfeng new shares
m: M&G new shares
x: on market new shares
s: issue share price in dollars.

If the $100m raised is varied, the resultant figures are:

$90m: h=15.62 , g=25.89, m=11.16, x=3.57, s=1.60
$100m: h=16.66, g=29.00, m=13.24, x=7.7, s=1.50
$120m: h=19.23, g=36.67, m=18.34, x=18.06, s=1.30
$125m: h=20.00, g=38.97, m=19.87, x=21.15, s=1.25
$130m: h=20.83, g=41.46, m=21.53, x=24.50, s=1.20
$150m: h=25.00, g=53.91, m=29.82, x=41.25, s=1.00

If Hanwa's budget isn't fixed, then for the $100m scenario this results in:

$20m (Hanwa): h=20.00, g=38.97, m=19.87, x=21.15, s=1.00
$25m (Hanwa): h=16.66, g=29.00, m=13.24, x=7.7, s=1.50
$30m (Hanwa): h=15.00, g=24.02, m=9.92, x=1.05, s=2.00

I'd say the most likely of the above is this line from the $25m from Hanwa scenario:

$130m: h=20.83, g=41.46, m=21.53, x=24.50, s=1.20

which in pounds (according to google) is:

£99.19m @£0.92
Hanwa contributes: £19.16m
Ganfeng: £38.14m
M&G: £19.8m
Market: £22.54m

If the market can't support £22.54m@£0.92, it might be able to support £8.81m@£1.14m (this line: $100m: h=16.66, g=29.00, m=13.24, x=7.7, s=1.50) which is the original VSA target price :-)

As ever, there could be possible logic errors or typos and I agree, it all seems quite unlikely from this share price - it always does. However, if any of these scenarios play out it will all seem so obvious looking back in hindsight - it always does. :-)

Ob.

Good talk. Great sales pitch. Sounds like final agreed percentages will be Ganfeng: 29.9%, M&G 19.9%, Hanwa 10%. A few times he implied Sonora was 25ktpa which makes me wonder if that is the new stage 1 ktpa target - to be announced. This news could boost the share price enabling funding to complete at a higher share price. Especially as I'm now less certain Hanwa will have a solo raise @25p to take them to 10% before they all jointly raise together to reach their final %'s, as it will only raise a few million. If this is the case, a low share price is no longer in the interests of the cornerstone investors... IMHO.

Perhaps the order of events will be: share price rises on its own (this is AIM!) or is news driven; 5-15m is raised on market partly offered to existing (and new?) share holders at the higher share price, followed by 85-95 million contributed by the cornerstone investors at a similar, if not the same, share price taking them to their final %'s and completing the fund raise.

It should be noted that at this point it's in the interests of the cornerstone investors that they hold onto their target %'s whilst contributing as little as possible to the final raise which completes the CapEx requirements. IMHO it's likely they'll already have a share price in mind which fits the bill and doesn't upset the agreements and their carefully crafted equations.

Now I wonder what that share price is? Calculators at the ready :-)

Ob.

Look what's no longer there ;-)

https://apps.sentinel-hub.com/eo-browser/?lat=-0.04965&lng=-51.18576&zoom=16&time=2019-09-16&preset=1_TRUE_COLOR&datasource=Sentinel-2%20L2A
https://apps.sentinel-hub.com/eo-browser/?lat=-0.04965&lng=-51.18576&zoom=16&time=2019-10-01&preset=1_TRUE_COLOR&datasource=Sentinel-2%20L2A
https://apps.sentinel-hub.com/eo-browser/?lat=-0.04965&lng=-51.18576&zoom=16&time=2019-11-05&preset=1_TRUE_COLOR&datasource=Sentinel-2%20L2A
https://apps.sentinel-hub.com/eo-browser/?lat=-0.04965&lng=-51.18576&zoom=16&time=2019-11-30&preset=1_TRUE_COLOR&datasource=Sentinel-2%20L2A

https://www.google.com/maps/@-0.0568836,-51.1848461,110m/data=!3m1!1e3

You done all your research on Amapa @tomcat? Latest satellite views etc? If it comes off this share price is an absolute steal IMHO.

Hanwa initially invested at the 10% level and they had an option to increase their equity interest in Bacanora to 19.9%. I don't know if the option lapsed.

You've made my day @Barksy. Now if someone can arrange for this thread to be deleted. LoL.

[typo, and minor consequences of, corrected]

I wonder if there is a possibility that before the final joint raise (possibly including ordinary shareholders) to take the cornerstone investors to their target %'s we see Hanwa take their stake to 19.9% in a separate equity raise (diluting the %'s of Ganfeng and M&G). If so, a raise at 25p seems likely, but not certain to me. If the market believes this will happen (at 25p) it seems unconcerned, and probably rightly so, as this step will indicate that a fully funded project with a re-rate (IMHO towards and even possibly above £1) is very close.

Let's look at the mathematics:

@25p 40.04m new shares to Hanwa would raise £10.01 (suspicious!) taking their holding to 52.37m shares out of a new total of 263.02m (19.9%)

The simultaneous placing would then be from a starting point of:

Shares in issue: 263.02m
Ganfeng: 57.6m shares = 21.9%
M&G: 44.4m shares = 16.9%
Hanwa: 52.37m shares =19.9%

In order to attain g=29.9%, m=19.9%, h=19.9% the following number of shares and distribution would be issued:

https://www.emathhelp.net/calculators/algebra-2/simultaneous-equation-solver/?s=52.37+%2B+h%3D0.199+*+%28263.02+%2B+h+%2B+g+%2B+m%29%2C+57.6+%2B+g%3D0.299+*+%28263.02+%2B+h+%2B+g+%2B+m%29%2C+44.4+%2B+m%3D0.199+*+%28263.02+%2B+h+%2B+g+%2B+m%29%2C+n%3Dh+%2B+g+%2B+m&v=h%2C+g%2C+m%2C+n

[52.37 + h=0.199 * (263.02 + h + g + m), 57.6 + g=0.299 * (263.02 + h + g + m), 44.4 + m=0.199 * (263.02 + h + g + m), n=h + g + m]

g: Ganfeng
h: Hanwa
m: M&G
n: total new shares

resulting in:

g=49.62, h=18.99, m=26.96, n=95.56

If hypothetically (we don't know!) we say Hanwa have a budget of $25m to spend and they have just spent £10m @25p, this means they can afford to buy their 18.99m shares at:

(£19.34m - £10m) / 18.99m = 49p

If the joint placing were at 49p it would raise:

95.56m * 49p = £47m

Seems close to fully funded to me, and if all cornerstone investors could be persuaded to part with just a little bit more (perhaps Hanwa's budget is $25m + £10m?) it certainly would be :-)

Total shares in issue at this point would be: 263.02m + 95.56m = 358.58m

With a fully funded (but not commissioned) project I'd expect BCN's market cap to be in the £200-400 range (depending on various factors, not least sentiment!) which suggests to me £1 a share is feasible (as suggested by VSA)

Just idle musings. Might contain logic errors or typos. Please let me know.

Ob.

I wonder if there is a possibility that before the final joint raise (possibly including ordinary shareholders) to take the cornerstone investors to their target %'s we see Hanwa take their stake to 19.9% in a separate equity raise (diluting the %'s of Ganfeng and M&G). If so, a raise at 25p seems likely, but not certain to me. If the market believes this will happen (at 25p) it seems unconcerned, and probably rightly so, as this step will indicate that a fully funded project with a re-rate (IMHO towards and even possibly above £1) is very close.

Let's look at the mathematics:

@25p 40.04m new shares to Hanwa would raise £10.01 (suspicious!) taking their holding to 52.37m shares out of a new total of 263.02m (19.9%)

The simultaneous placing would then be from a starting point of:

Shares in issue: 263.02m
Ganfeng: 57.6m shares = 21.9%
M&G: 44.4m shares = 16.9%
Hanwa: 53.37m shares =19.9%

In order to attain g=29.9%, m=19.9%, h=19.9% the following number of shares and distribution would be issued:

https://www.emathhelp.net/calculators/algebra-2/simultaneous-equation-solver/?s=53.37+%2B+h%3D0.199+*+%28263.02+%2B+h+%2B+g+%2B+m%29%2C+57.6+%2B+g%3D0.299+*+%28263.02+%2B+h+%2B+g+%2B+m%29%2C+44.4+%2B+m%3D0.199+*+%28263.02+%2B+h+%2B+g+%2B+m%29%2C+n%3Dh+%2B+g+%2B+m&v=h%2C+g%2C+m%2C+n

[53.37 + h=0.199 * (263.02 + h + g + m), 57.6 + g=0.299 * (263.02 + h + g + m), 44.4 + m=0.199 * (263.02 + h + g + m), n=h + g + m]

g: Ganfeng
h: Hanwa
m: M&G
n: total new shares

resulting in:

g=48.63, h=17.33, m=26.30, n=92.26

If hypothetically (we don't know!) we say Hanwa have a budget of $25m to spend and they have just spent £10m @25p, this means they can afford to buy their 17.33m shares at:

(£19.34m - £10m) / 17.33m = 54p

If the joint placing were at 54p it would raise:

92.26m * 54p = £50m

Seems close to fully funded to me, and if all cornerstone investors could be persuaded to part with just a little bit more it certainly would be :-)

Total shares in issue at this point would be: 263.02m + 92.26m = 355.28m

With a fully funded (but not commissioned) project I'd expect BCN's market cap to be in the £200-400 range (depending on various factors, not least sentiment!) which suggests to me £1 a share is feasible (as suggested by VSA)

Just idle musings. Might contain logic errors or typos. Please let me know.

Ob.

@tomcat. Good point about the iron ore stock piles may be able to start shipping before our $2.5m is released! I think this "Cadence's investment will provide the initial working capital" from the original announcement and possibly something @kiran said in an interview had made me conclude that it shipping was dependent on our $2.5m investment being released. Now I'm not so sure. Also, it's news this month, not the beginning of this month, I'm not sure where I'd got the 1st of December from, it's news by 1st of January. Of course news tomorrow would be nice! :-)

@Bannor. "pretty much" - I think the majority of our EMH holding was acquired below 10p, but I haven't computed our average.

@Bannor: the iron ore stock piles were shipping before the disaster, the product is well known to the market and we will have little problem selling it. Well that's what we've been told - no doubt you will believe it when you see it :-)

@Bannor: I believe (you don't) that the $3.5m won't be raised until all conditions are met, not just the first set that releases our $2.5m, this could be well into next year, hopefully after my anticipated rerate towards WHI valuations.

Now, if we can all keep a lid on this so I can concentrate on changing my sex to dec that would be very much appreciated. Thank you. LoL.

Ob.

Pretty much all true @Bannor and has allowed me to sextuple my holding here since August 30th. I'm gambling big time the market has this one wrong as it appears to be placing too much weight on past failures and not enough on possible future success. It's how I like to roll. LoL. I was hoping for a decupling but I suspect (hope!) we are about to take off. :-)

I'll be most disappointed if we don't get an update on Amapa, good or bad, on Monday. We are supposed to be shipping the iron ore in December if all is going to plan. And iron ore prices are currently above the target "US$80 per tonne of 62% Fe would net Amapá a forecast US$60 million net of costs." - that 60 looking closer to 80 by my reckoning :-)

@tomcat. For what it's worth this is probably what you are after regarding how to determine the share distribution after a simultaneous placing involving multiple parties with target % holdings:

I make today's position as:

Current shares in issue: 222,981,837
Ganfeng: 25.83% = 57.6m shares
M&G: 19.9% = 44.4m shares
Hanwa: 5.53% = 12.3m shares

I think you are right about Ganfeng and M&G's target being 29.9% and 19.9% respectively. I'm not so certain on Hanwa's though. It could be 19.9%, but it might be both higher or lower than this.

At 19.9% the additional shares placed according to:

https://www.emathhelp.net/calculators/algebra-2/simultaneous-equation-solver/?s=12.3+%2B+h%3D0.199+*+%28222.98+%2B+h+%2B+g+%2B+m%29%2C+57.6+%2B+g%3D0.299+*+%28222.98+%2B+h+%2B+g+%2B+m%29%2C+44.4+%2B+m%3D0.199+*+%28222.98+%2B+h+%2B+g+%2B+m%29%2C+n%3Dh+%2B+g+%2B+m&v=h%2C+g%2C+m%2C+n

g: Ganfeng
h: Hanwa
m: M&G
n: total new shares

is:

g=49.65, h=59.08, m=26.98, n=135.70

Other Hanwa % targets result in:

10%: g=23.23, h=14.73, m=9.4, n=47.37
15%: g=34.72, h=34.01, m=17.04, n=85.77
19.9%: g=49.65, h=59.08, m=26.98, n=135.70
25%: g=71.35, h=95.52, m=41.42, n=208.29
29.9%: g=102.48, h=147.78, m=62.14, n=312.39

(units are millions)

You might have seen I've looked at a few other scenarios on the KDNC board using this technique related to the implications on Hanwa's stated intention to conditionally invest $25m on what this might mean for the share price of the simultaneous placing. I admit it's all a bit finger in the air but might be of some interest to number geeks and conspiracy theorists so I share nonetheless. ;-)

I'll be grateful if anyone points out any flaws with the above logic or typos - if you click on the link you'll see the system of equations that are being solved, which are simply:

12.3 + h=0.199 * (222.98 + h + g + m), 57.6 + g=0.299 * (222.98 + h + g + m), 44.4 + m=0.199 * (222.98 + h + g + m)

Ob.

With the constraint that the placing is at @25p

Hanwa target percentages:

10% : Total raised: $15.3m ; Hanwa: $4.8m
15% : Total raised: $27.7m ; Hanwa: $11.0m
19.9% : Total raised: $42.9m; Hanwa; $19.1m
25% : Total raised: $67.5m; Hanwa; $30.9m
29.9% : Total raised: $101.0m; Hanwa; $47.8m

https://www.emathhelp.net/calculators/algebra-2/simultaneous-equation-solver/?s=12.3+%2B+h%3D0.299+*+%28222.98+%2B+h+%2B+g+%2B+m%29%2C+57.6+%2B+g%3D0.299+*+%28222.98+%2B+h+%2B+g+%2B+m%29%2C+44.4+%2B+m%3D0.199+*+%28222.98+%2B+h+%2B+g+%2B+m%29%2C+c%3Df+*+%28h+%2B+g+%2B+m%29+%2F+h%2C+0.3234%3Dc+%2F+%28h+%2B+g+%2B+m%29&v=h%2C+g%2C+m%2C+c%2C+f

f: funding by Hanwa in millions of dollars

Hanwa to 29.9% is not out of the question, but unlikely IMHO. 19.9% tops.

@Barksy, see the latest BCN RNS re M&G placing for increase in BCN shares. @Frankie. If you click on the link you would see the simultaneous equations. Since you don't click on links you'll just have to imagine what they look like :-)