Member Info for observer842

It might help if we were routinely kept informed of progress. Like what's the latest with: " Inspirit Marine - currently in discussion with a large car/marine engine manufacturer to develop a unit for the shipping industry with current output of 11.68kw.". A lot can happen in a month since that announcement, or not a lot as may be the case...

We own Inspirit Energy Limited. They better get their act together in time...

Indeed @dougal. From the annual accounts JG owns 439,696,246 shares, which I make is around 30% of the company. He'll be wanting to hold on to that or increase that percentage as cheaply as possible.

When the time is right I'm sure we won't be able to shut him up shouting from the rooftops just what amazing products we have. But until then, we wait...

He recently bought shares in OCT, but not INSP. Perhaps current negotiations prevent him?

Ob.

Too many unknowns @tomcat, but I can see what you are getting at. Why are you using $420m as the base, isn't it $460m? which should come down with Ganfeng's know-how.

I don't think I knew this: "The loan notes are only convertible should the Group default on repayments, in which case the lendor can opt to convert the outstanding balance at 85% of the WWAV for the 15 working days prior to the conversion."

What is WWAV? Is it similar to VWAP?

I wouldn't be so sure on that @Fallingknife...

That would also make sense to me @Dallas and @tomcat. I wonder if the market might be worried that it could get a little messy if all parties involved don't find the agreement beneficial to them, tolerable at best? I'm thinking toll-mining and toll-treatment through arms-length entities arranged to maximise profit and minimise tax/royalties whilst keeping the judiciary and JV partners complaisant.

My understanding is that the 300GWhr/yr is by 2025:

"Volkswagen doubles forecast for EV battery cell demand" (May 15, 2019)
https://europe.autonews.com/automakers/volkswagen-doubles-forecast-ev-battery-cell-demand
===[
VW said on Tuesday that it will have to source more than 300 gigawatt hours of annual supply in 2025, increasing its 2017 prediction for 150 GWh capacity. The forecast is for VW's needs in Europe and Asia. VW did not make a forecast for future requirements for any other global markets including the U.S., which will further increase its supply needs.
]===

I posted more information on the KDNC board on 27 May 2019 10:41 which I concluded with "Got to get those supplies secured! As @Fingersxed would say on the EMH board: Who are they going to call?" ;-)

Ob

On the topic of uncertainty potentially holding back the share price, I was wondering if anyone else had views on what deal was on the table in terms of Ganfeng's investment at the project level? The wording is:

"Proposed Strategic Investment by Ganfeng Lithium" (20 May 2019)
https://polaris.brighterir.com/public/bacanora_lithium/news/rns/story/xl5dj3w
===[
In addition, as part of the Strategic Investment GFL would be granted the right to acquire an initial 22.5% interest in a subsidiary of Bacanora which holds the Sonora Project ("Project Level Company"), for a cash payment of £7,563,649, equivalent to a price of 25 pence per share on the same basis as the Private Placement (the "Project Level Investment"). Subject to the completion of the Project Level Investment, GFL would have the right to nominate one director to the board of the Project Level Company. GFL would also be granted an option to increase its interest in the Project Level Company to up to 50% from 22.5%, within 24 months of the completion of the Project Level Investment. The valuation of any additional investment in the Project Level Company by GFL would be based on the share price of Bacanora at the time of the additional purchase.
]===

The closest I can reconcile this is where the subsidiary that is mentioned is currently 100% owned by BCN, but is not La Ventana. This subsidiary will be responsible for everything from the construction, running to decommissioning of the project, and an additional agreement will be formed with the owners of La Ventana (100% BCN) , El Sauz (70% BCN) and Fleur (70% BCN) concessions to essentially toll mine the material from these concessions, or some other toll-like agreement beneficial/tolerable to all parties involved, including Mexican tax payers.

I posted more on this on the KDNC board on 20 May 2019 21:42

Thoughts appreciated, especially if it is blindingly obvious to anyone! ;-)

Ob.

The current share price is certainly perplexing @tomcat. The most likely explanation to me is that the market doesn't believe the deal will complete, meaning when it does, which could be anytime really, there could be many caught short as it dawns what the true value of Sonora is when compared with its peers...

@Frankie: "when will this purchase take place?". From the RNS:

" 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
===[
Cadence is in discussions with potential strategic investors to fund all or part of this investment via equity.
...
To acquire its 27% interest Cadence will invest US$ 6 million over two stages in the joint venture company, Pedra Branca Alliance Pty Ltd. ("JV Co"). The first stage is for 20% of the JV Co the consideration for which is US$2.5 million, the second stage of investment is for a further 7% of JV Co for a consideration of US$3.5 million.
...
The plan requires approval by a general meeting of the creditors and once approved the company can continue to operate and trade under the protection of the JRP. At this point in time this meeting is expected to occur by the end of June 2019.
]===

I'm hopeful great news from EMH or Sonora (or Yangibana, MMS or an other!) will significantly boost the share price before we have to raise the first $2.5m on end of June timescales, meaning our BoD (and the shareholders!) will be more comfortable going down the equity (dilution) route. Though part of me hopes we try our hand at the CLN route again, perhaps converting other outstanding debt on similar terms? But the terms have to be attractive and not disastrous for us this time if our plans don't pan out as hoped. After all, if you don't at first succeed... although what's the definition of insanity again!? Two doesn't count as repeatedly does it? ;-)

Ob.

@jimb2 - "I'm hoping Ganfeng will significantly increase the production stage one capacity.". I agree with @tomcat's post on the BCN board, this feels much more serious than "the nextview fiasco". We should stand to benefit greatly if production increases are announced! ;-)

Very interesting interview @Fingersxed. Thanks for sharing!

Some more evidence to my eyes that estimates of 1Mt/yr LCE in 2025 are woefully dated:

"Volkswagen doubles forecast for EV battery cell demand" (May 15, 2019)
https://europe.autonews.com/automakers/volkswagen-doubles-forecast-ev-battery-cell-demand
===[
VW said on Tuesday that it will have to source more than 300 gigawatt hours of annual supply in 2025, increasing its 2017 prediction for 150 GWh capacity. The forecast is for VW's needs in Europe and Asia. VW did not make a forecast for future requirements for any other global markets including the U.S., which will further increase its supply needs.
]===

The total group sales for 2018 were estimated to be:

"Volkswagen delivered 10.8 million vehicles in 2018, eyes world No.1 spot" (JANUARY 11, 2019)
https://uk.reuters.com/article/us-volkswagen-sales/volkswagen-delivered-10-8-million-vehicles-in-2018-eyes-world-no-1-spot-idUKKCN1P5111
===[
Volkswagen Group’s (VOWG_p.DE) deliveries rose 0.9 percent to a record 10.83 million last year, the German company said on Friday, putting it neck-and-neck with Renault-Nissan-Mitsubishi in the race to be the world’s biggest vehicle manufacturer.
]===

That's about 10% of global sales. The 2025 estimated requirements of 300GWhr production are for Europe and Asia only. Assuming they want to keep their 10% market share position, VW appear to be estimating a global annual production rate of at least 3,000GWhr. Only 2 years ago they were implying half that. Times have moved on, and rapidly so. We shouldn't be surprised to see their 2025 estimates rise further over the coming years.

@0.8-0.9 kg LCE / kWh that 3,000GWhr translates to 2.4-2.7Mtpa LCE

It feels that we should be in a position to benefit greatly from this increased demand yet to be realised by the wider market. It's just, ahem, unfortunate, that BCN took such a bashing over the past year or so (which we might have contributed to!), knocking our share price for six in the process - although no doubt in hindsight if (when!) our share price recovers some will be thankful of the added buying opportunity this afforded them...(!)

Medium term (optimistically short term!) we should be quids in with our Sonora JV position when (if!) production targets are increased, and I've also got high hopes for EMH in the short term (next week even). Got to get those supplies secured! As @Fingersxed would say on the EMH board: Who are they going to call?

Ob

Our 2018 accounts are due by the end of June. We might leave it until then to publish, but going by recent years, I'd say the odds are good they are published next week.

@jimb2, I've also recently been using 40kg LCE per car for my conservative calculations. Though not surprising since we read similar articles! ;-)

In terms of substantiating this and forecasts for the future, it's worth taking a read of:

"US Electric Car Range Will Average 275 Miles By 2022, 400 Miles By 2028 - New Research (Part 1)" (October 27th, 2018)
https://cleantechnica.com/2018/10/27/us-electric-car-range-will-average-275-miles-by-2022-400-miles-by-2028-new-research-part-1/
===[
The average range of fully electric cars (BEVs) available in the US by 2022 will be around 275 miles and could reach 400 miles by 2028. These are two findings from my new exclusive analysis and forecast.
...
If solid-state batteries reach market as expected around 2025–2027, BEVs (especially higher-end models) could surpass an average 500 miles of range by 2030. Of course, most high-end luxury models should have ranges of 350–400 miles by around 2024 (Tesla models already have ranges up to ~335 miles), while many non-luxury vehicles should see ranges of around 275–300 miles.
]===

My 40kg LCE is based on around 0.8-0.9kg LCE per kWh. i.e. cars with 45-50kWh battery packs which equates to around 200 miles at current energy densities:

"Tesla Model 3"
https://en.wikipedia.org/wiki/Tesla_Model_3
===[
Battery 50 or 62 or 75 kWh
220 mi (354 km) Standard Range
264 mi (425 km) Mid Range
325 mi (523 km) Long Range
]===

If the average range of EV's sold in 2025 were 330 miles then I think it's likely we'd be looking at approximately 60kg of LCE per car sold, an increase of 50% from today's estimated average. This is a conservative estimate from me, I suspect we'll be looking at increases of between 50-100% from today's values due to various factors such as reducing costs and improving efficiencies towards the average of around 400 miles for ICE cars.

Ob.

I couldn't agree more with your thoughts @jimb2! Take a read of:

"What’s Driving the Electric Vehicle, Lithium, and Battery Markets in 2019?" (May 21, 2019)
https://www.globalxfunds.com/whats-driving-the-electric-vehicle-lithium-and-battery-markets-in-2019/
===[
By 2025, for example, EVs sales are expected to rise to 8.4 million vehicles or approximately 8% of total annual sales.
]===

Most of what is presented is reasonable analysis. However, I've quoted the section which I *strongly* disagree with, and which most of their demand analysis follows.

The figure comes from:

"Driving into 2025: The Future of Electric Vehicles" (October 10, 2018)
https://www.jpmorgan.com/global/research/electric-vehicles
===[
By 2025, J.P. Morgan estimates this will rise close to 8.4 million vehicles or a 7.7% market share. While this jump is significant, it doesn’t compare to the kind of growth expected in HEVs - cars that combine a fuel engine with electric elements. This sector is forecast to swell from just 3% of global market share to more than 25 million vehicles or 23% of global sales over the same period.1 This leaves pure-ICE vehicles with around 70% of the market share in 2025, with this falling to around 40% by 2030, predominantly in emerging markets.
]===

However the evidence is clear that BEV growth has been and continues to be much stronger than HEV growth. For example:

"EV Company News For The Month Of April 2018" (May 1, 2018)
https://seekingalpha.com/article/4167997-ev-company-news-month-april-2018
===[
Of note, 60% of all global electric car sales so far in 2018 were pure electric.
]===

"EV Company News For The Month Of October 2018" (Oct. 31, 2018)
https://seekingalpha.com/article/4216456-ev-company-news-month-october-2018
===[
Of note, 65% of all global electric car sales so far in 2018 were pure electric.
]===

"EV Company News For The Month Of April 2019" (May 1, 2019)
https://seekingalpha.com/article/4258770-ev-company-news-month-april-2019
===[
Of note 74% of all global electric car sales in March were 100% battery electric vehicles, the balance being hybrids.
]===

My personal projections place BEV market share in the 20% (~23 million EV's @42%YoY growth) to 50% (~54 million EV's @60% growth) range by 2025, although it is possible it flips even faster.

Matt's projections are for 20% by 2025. Bloomberg's are for 11%

"EV Metals Demand: The Calm Before The Storm" (May 20, 2019)
https://seekingalpha.com/article/4265357-ev-metals-demand-calm-storm

The point being, the global X demand scenarios of between 1-1.2Mt/yr LCE by 2025 are, to me, woefully on the low side. I'd say it's more likely to be in the 2-3Mt/yr LCE range. And I am *strongly* beginning to suspect that certain players in the market are beginning to realise this given recent acquisitions.

And this is without considering increased Lithium demands from large vehicles and storage... ;-)

Ob.

Nice summary of the current global status and plans for EVs:

"Electric Vehicle Market Status" (May 2019)
https://www.mjbradley.com/sites/default/files/ElectricVehicleMarketStatus05072019.pdf
===[
Figure 1: Timeline of Global Targets to Phase Out Internal Combustion Vehicles
]===

Those timelines are almost certainly going to become more aggressive over the next few years.

As ever BNEF is still way off (IMHO), but as each year passes they find themselves adjusting towards the Tony Seba projections. It's going to be an S curve adoption BNEF - not constant YoY growth! ;-)

"Electric Vehicle Outlook 2019" (May 2019)
https://about.bnef.com/electric-vehicle-outlook/

https://www.rethinkx.com/

I agree @jimb2. And remember, it's not all about the Lithium - Rare Earths are used in the motors of most EV's - which is where our Yangibana JV with Hastings comes in. News due from them in the light of recent events I'd say, there will be many wanting to secure supplies - and while I'm thinking about Australia, I wonder how our initial exploration in our new Lithium assets is progressing? :-)

If you want to DYOR @dougal then open up this page:

"Stirling engine having platelet heat exchanging elements" (2003-01-13 - filing date)
https://patents.google.com/patent/WO2003076766A1/en

and read the paragraphs which mention solar (search for "solar"). It seems likely to me that the new in-house designs will be based on these patents. Solar is mentioned 17 times. Marine once.

If so then the implementation is likely to be for a single Inspirit Solar Stirling Engine at the focal point of each dish in a field of dishes which might look something like:

"Dish Stirling Solar Plant Debuts" (04/01/2010)
https://cdn.powermag.com/wp-content/uploads/2010/04/520004dac6c0d-040110_GM_Fig6.jpeg
https://www.powermag.com/dish-stirling-solar-plant-debuts/

If it's better (cheaper, more reliable, more efficient, less servicing, etc) than it's predecessors and helps this type of solar power beat solar PV, then we could be onto a winner. I'm hopeful for the former, but doubtful on the latter.

Ob.