Member Info for observer842

Cross-posting from OCT in case anyone here knows:

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GIS is now INSP's broker. Does anyone have a list of other companies GIS is broker to?
]===

But "buying them back on friday at 0.09p" from who? Someone must have sold at that price. For every trade reported there is both a buyer and a seller at that price. I still think my take is the most likely for Friday afternoon, especially if the 33m trade was delayed.

@tomcat "it’s quite possible that the 33m was also a buy..." if it was, then for balance we should add that presumably someone sold 33m shares @0.09p in addition to the 15m sold/bought in the auction @0.09p

GIS is now INSP's broker. Does anyone have a list of other companies GIS is broker to?

@Frankie: 15:55 ;-)

If you want to learn about auctions search for "aim auctions" which should lead you to this

https://www.lseg.com/markets-products-and-services/our-markets/london-stock-exchange/equities-markets/trading-services/trading-services-video-resources/what-auction

Divide by 10. One day we'll be 0.9p again. One day :-)

With prices to be make it clearer:

That's not what I was saying @tomcat. put another way: shareholder A sells 33m shares to MM @0.9p. That is the trade reported at 14:03:54. In the auction shareholder B buys 15m shares from the MM @0.9p. The MM is now left with 18m shares to shift which they bought @0.9p. Since they aren't in a habit of selling for less than they bought they sell for more than 0.9p throughout the rest of the day.

It's only my take.

And if my take is corrected, that is great, I learn something today :-)

@Dallas will know more ;-)

That's not what I was saying @tomcat. put another way: shareholder A sells 33m shares to MM. That is the trade reported at 14:03:54. In the auction shareholder B buys 15m shares from the MM. The MM is now left with 18m shares to shift. Since they aren't in a habit of selling for less than they bought they sell for more throughout the rest of the day.

It's only my take.

What do you reckon on this take @tomcat? Presumably whoever was selling the 15m shares in the auction was happy to do so as they knew separately as documented 4 minutes later on this site they had 33m shares to dump on the market. 15m of those went in the 0.9p auction, and the majority of those remaining appear to have been sold for a 5-10% profit during the rest of the afternoon.

When did the 33m get reported?

Thanks @Dallas, that's the basis of my post on 20 May 2019 21:42 below - in summary it seems that if this is the agreement, and from out point of view we are selling clay, or perhaps lightly processed or beneficiated clay, then it would likely be in the interests of BCN shareholders to maximise the price achieved of this clay. There is also a question of tax/royalties as the Mexican government wouldn't be happy with mining royalties on peanut prices.

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Perhaps the arrangement is that GFL and BCN will own the Sonora Lithium Project (via Sonora Lithium LTD) covering the MSB and Mexilit tenements, eventually this is expected to be a 50:50 partnership, but since GFL will own approximately 30% of BCN they will have effective control. We would not be involved in that arrangement. However, we would be involved when it came to paying a fair price to access the material from the LV and JV tenements.

We've discussed the drivers which could influence a fair price previously when GFL weren't involved. In which case it was in BCN's interests to pay peanuts to access the material held in both the JV's and LV's. But with GFL involved this is no longer the case: To maximise profit to BCN shareholders (rather than GFL ones) it should be in BCN's interests to maximise the price it can command from the material in the LV's and JV's - which should benefit us too.

For the LV it is probably obvious. For the JV perhaps not so much. An example or two always helps ;-)

If (a hypothetical) £100 was paid for each unit of run of mine from the JV. £30 would go to KDNC. £70 to MSB which is owned 99.9% by BCN. If the processed value of that unit was £1000, then of the remaining £900 of additional value £450 would go to BCN and £450 to GFL.

Of the £1000 total, KDNC get's £30, BCN gets £520 (£70 + £450) and GFL gets £450. Because GFL owns 30% of BCN they also benefit from an additional £156 (30% of £520) = £606

Now consider who benefits more if the original price is higher.

If (a hypothetical) £200 was paid for each unit of run of mine from the JV. £60 would go to KDNC. £140 to MSB which is owned 99.9% by BCN. If the processed value of that unit was £1000, then of the remaining £800 of additional value £400 would go to BCN and £400 to GFL.

Of the £1000 total, KDNC get's £60, BCN gets £540 (£140 + £400) and GFL gets £400. Because GFL owns 30% of BCN they also benefit from an additional £162 (30% of £540) = £562

Higher still:

If (a hypothetical) £500 was paid for each unit of run of mine from the JV. £150 would go to KDNC. £350 to MSB which is owned 99.9% by BCN. If the true value of that unit was £1000, then of the remaining £500 of additional value £250 would go to BCN and £250 to GFL.

Of the £1000 total, KDNC get's £150, BCN gets £600 (£350 + £250) and GFL gets £250. Because GFL owns 30% of BCN they also benefit from an additional £180 (30% of £600) = £430

I'm liking this deal! ;-)

Ob.
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Perhaps the default situation if domiciled in the UK is different to if domiciled in Canada? Anyone know what it is? The question is if we are unable to reach an operational agreement, and the time comes BCN mines from the JV area what happens?

and @Dallas, @Dallas might know. Much simpler put than me :-)

@Ivybush. Do a search for "mexilit" in the 2014 and 2018 BCN AIM admission documents at:

https://www.bacanoralithium.com/investor-relations/restricted-aim-rule-26/

I don't know if the situation has changed since their redomicile to London, however there was talk from our BoD about renegotiating the JV contracts a few years ago with a view to producing an agreement which was workable for both companies - likely a toll based one. If I recall correctly one of the stated reasons for us blocking the first attempt at redomicile was because we weren't happy with how they intended to treat our JV's - presumably in a way which meant we benefited minimally or stretched us too much financially so would have had little choice bu to let them go for peanuts?

I don't know if the renegotiation went ahead and if so how it concluded, probably best you ask @Kiran about the history, the current situation, and the future.

@tomcat or @Bannor my have a different take, or know more.

Ob.

Exactly @gingerT. If we've read this right and certification news is positive there are going to be a fair few asking themselves why they didn't take the punt at less than half of the 0.07p minimum conversion price of the CLN's. Of course, if we've read this wrong we'll be the ones asking ourselves why we didn't sell!

Additionally, although I was impressed (!) we got an RNS on the same day regarding our broker, it's not a great sign we have yet to appoint one...

We continue to wait. What for other than certification? Take a look at the thread beginning on 10 Jan '18 for a possible clue. ;-)

It's a large gamble. It shouldn't be. But it is. That's what silence does. Breeds doubt. Especially on AIM.

Ob.

Since this is the reason for being positive thread I thought I'd post a potential silver lining to the iron ore price falling cloud:

"Corporate Update" (15 July 2019)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=2842635
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Cadence is pleased to confirm that it has placed US$2.5 million into a judicial trust account of the commercial court of São Paulo. These funds will be held in escrow until the preconditions of the JRP are met, which include the approval of the JRP at a creditors meeting, and the grant of key operational licenses. We currently anticipate that the creditors meeting will occur at the end of August.

Once all the JRP preconditions are met (which mirror the preconditions in our investment agreement with Indo Sino) the US$2.5 million will be released and Cadence will own 20% of the Amapá Project.
]===

My suspicion, and it is only that, is that with Iron ore prices returning to the region of where they were when the heads of terms were agreed back in May presumably means it's more likely that the deal will go ahead without either party trying to argue in favour of change due to a change of circumstance. e.g. if the prices were higher the creditors might want their payment brought forward or compressed from that stated in the head of terms:

" Heads of Terms to Acquire Interest in former Anglo American Iron Ore Mine, Amapá, NE Brazil" (21 May 2019)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=2790390
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The JRP schedule contemplates the majority of the historic liabilities will be paid from free cash flow in years 7 to year 17 of operations which represents a discounted NPV10 debt value of approximately US$106 million.
]===

I wonder if it might be in our favour if iron ore prices sink further? Would we try a renegotiation? No point in progressing the project if we can't make a profit is there...

Clutching at straws? Glass half full? Anyone with experience in these matters care to comment?

Ob.

Sorry @Chucky, all I'm saying now is that the potential is massive, but t's and i's first before I get the old calculator out in public. DYOR and you might see...

@Frankie to me: "Did you really invest in Cadence, for the iron ore? I thought that shareholders were after the rare earth minerals and lithium?".

A bit of a long answer which I'm sure we've been over many times, but perhaps not all in the same post ;-) I'm here for the Lithium and for a lesser extent now, but not initially, the Rare Earth's. However in order to be able to stand our ground in those plays my take is that we need to be able to demonstrate that we can stay afloat and ideally grow via projects with near term cash flows.

This is where San Luis was supposed to come in coming up to 2 years ago. Our share price was 0.27p when this was announced on 11 December 2017 and rose to 0.36p in the following days to sink pretty much ever since whilst we waited. Unfortunately for us, and for our Argentinian neighbours from what I gather there has been some serious dragging of feet by local officials. With this in mind, it seems that around a year ago we started discussions regarding Amapa, and as San Luis dragged on, it seems that we decided a back up for Amapa should that not progress as planned, or iron ore prices tank even further than recently, we have Picasso and friends in Australia as potential backups - which appear to have now stalled with our focus on Amapa.

So in conclusion, for me, if we don't sell an asset soon for big bucks, and this is less likely if we looked stressed than if we look in good health, then we are going to need one of our assets to tide us over until we can sell, ideally for the target $100m our 30% of the Sonora JV is easily worth should BCN up their production rate significantly from that stated in their DFS: Net Present Value estimations become significantly less discounted at production.

At this moment in time that asset is Amapa, which if all goes to plan (for once!) and especially so if we get lucky with the Iron Ore price, is an incredibly exciting prospect which should help us unlock the foretold fortunes of ye olde. Big ifs and should's in that statement! I'm holding my breath before turning my attention to Amapa - let's get those i's dotted and t's crossed first, but should you wish to do your own research to see the potential, be my guest. :-)

Ob.

@Frankie. Iron ore becomes steel. Steel is primarily used in construction. Indicative relative prices for us is the 65% column at

"Custeel Iron Ore Price Index - Seaborne Iron Ore Price Index"
http://www.custeel.com/en/csi.jsp
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2019-08-05 108.87
2019-07-03 137.07
2019-05-15 110.92
]===

I've picked out the most recent data, that used in the middle of May at approximately the time of our announcement on 21 May 2019, and the highest since.

For reference:

"Heads of Terms to Acquire Interest in former Anglo American Iron Ore Mine, Amapá, NE Brazil" (21 May 2019)
http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=2790390
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65% Iron Ore (CFR) North China have increased from US$95.95 per dry metric tonne ("$/dmt") to US$111.90 / dmt since early September 2018 to the middle of May 2019[4]
]===