Member Info for observer842

@Cartunehead I'm talking about hostile scenarios, the BCN BoD backed every step along the Ganfeng journey to take control for what their PI's described as peanuts. Without the consent of our BoD, they, or no one, is getting to 30% of KDNC without some serious amounts of on market volume, and that ain't going to happen anywhere near this share price, and would likely take days, weeks even, meaning TR1's as they passed through each % point.

As to the mine life - I strongly suggest you take a look at "Figure 15.4.1: Mineral Reserve Pit" on page 130 of the Sonora DFS:

https://bacanoralithium.com/_userfiles/pages/files/documents/bacanorafstechnicalreport25012018_compressed.pdf

and compare it with "Figure 15.1: North and South Mineral Reserve Pits

lol @Cartunehead. Ganfeng TR-1'ing over 3% in KDNC would have the same effect as someone like Tesla declaring this. What do you think would happen next...? ;-) As I keep saying, we need improved Reach, Understanding, and Belief here. Reach would go through the roof, and understanding would quickly follow! As for belief, keep the faith LTH's - I feel this half is going to be pretty spectacular for us... ;-)

@tomcat - from what I can see the Lithea projects are significantly less developed than Sonora. As @Bannor says (good post @Bannor!) "interesting times & just a matter of time before we start getting rumours/news". Legislative news is now overdue - expectations seem to be that those companies with mining licences will have them honoured, those with exploration licences, less so. Which if true, is fantastic news for us as all of our 1.478Mt LCE of resources are from the JV areas with mining licences! :-)))

@Ivy. You probably know this, but for the benefit of those that don't, if you are seriously worried about the possibility of a hostile bid, then it significantly helps the BoD's hand if you vote for resolution 4 and 5 at the AGM. ;-)

@Ivy. To reiterate - IMHO there is simply no way Ganfeng would attempt a hostile takeover. Not on brand. They would need the blessing of our BoD - which in my opinion ain't going to happen below 85p. Our potential is simply too incredible for them to walk with anything less. Whatever the minimum they have in mind, it'll be a damn sight higher than 10.75p, so an incredibly strong buy opinion from me based on this possibility at this price.

30 Jul 2022 07:55
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@Ivy. In my opinion we are in a completely different situation to BCN. For starters we have no single shareholder above 3% and IMHO without a recommendation from the BoD to accept an offer, with decent reasoning, the shareholders are unlikely to capitulate. I personally can't see the BoD recommending anything below which would give their 29p options significant value. Surely they'd be looking for AT LEAST £1m each from them? 85p. Though £1m doesn't really seem that much nowadays. £200m for the lot, today, and I'd happily walk if they backed it. £1.16. But would be up for holding if not - what an interesting ride that would be! ;-)
]===

I've had a go at estimating the for sale tag of our Sonora JV's based on recent market activity. The TL;DR is:

~£30m for the small bit of our JV in the "current" 19 year 17.5/35ktpa mining plan.
~£100m for all of the JV areas based on total resources.

Post updated Ganfeng DFS, and if sufficiently large and favourable to us, i.e. at least 35/70ktpa LCE, then maybe:
~£375m based on another 17.5/35ktpa LCE fully located on our JV land.

https://www.reddit.com/r/CadenceMinerals/comments/vpr5w7/comment/iicvd5n/
===[
Ganfeng has made an offer to buy Lithea for $962m. The news release contains information pertinent to valuing Cadence's Sonora 30% JV's.

http://www.ganfenglithium.com/ir_detail_en/id/2525.html
=====[
V. THE PRICING BASIS AND PRINCIPLES OF THE TRANSACTION

Golder, the professional consultant hired by the Company, also adopted the net present value method to fully demonstrate the intrinsic value of PPG lithium salt lake project. By selecting the average price of 16,000 US dollars of lithium carbonate in the past five years as the long-term reference price of lithium carbonate, and conservatively calculating according to the 40 years of annual production of 30,000 tons of lithium carbonate, the after tax net present value of PPG project is 1.218 billion US dollars, and the after tax internal rate of return is 30%.
]=====

The proposed value of the transaction is $962m, which is 80% of this NPV.

According to Table 22.1.4 of the Sonora DFS the post tax NPV8 of the project is increased from $802m to $1,754m if the assumed long term average LCE price is increased from $11/kg to $16/kg.

Approximately 3.6% of the mine feed of the 19 year 17.5/35ktpa DFS plan is associated with Cadence. Due to when this is mined a more conservative attribution of the NPV might be 2.5%.

Therefore based on the current 17.5/35ktpa mine plan a fair conservative offer based on the recent Lithea transaction for only the area of the JV planned to be mined is:

80% * 2.5% * $1,754m = $35m = £28.9m

Other more optimistic estimates based on the Lithea transaction are possible. For example if Ganfeng decide to set up another 17.5/35ktpa fully contained within our JV areas a fair offer based on the recent Lithea transaction for all of our JV areas is:

$35m + (80% * 30% * $1,754m) = $456m = £375m

If basing the estimate on total resources, the Lithea transaction is $962m for 11.06Mt of total resources. Cadence has 1.478Mt of total resources associated with the 30% joint ventures, therefore an offer on this basis is:

1.478Mt / 11.06Mt * $962m = $129m = £106m

On a final note. Anyone who thinks Ganfeng will be sticking to the 19 year 17.5/35ktpa plan simply isn't paying attention.
]===

@Bannor. I know you jest, but I believe the minimum "fair value" equivalent to HAS A$9m offer we can estimate for Sonora is circa £12m as noted here:

https://www.reddit.com/r/CadenceMinerals/comments/vpr5w7/due_diligence_lsekdnc_cadence_minerals_asset/

But unlike Yangibana we've got the Sonora 100% Ganfeng venture surrounded, so if we did sell the circa 3.6% in the current mining plan, I doubt very much we'd throw in the rest for free. ;-)

Anyone who thinks Ganfeng will be sticking to the 17.5/35ktpa plan simply isn't paying attention.

As noted in the link above, I personally think £105-181m is a more likely out for us from Sonora, the alternative being to continue to hold. As noted by Kiran this may not be realised in cash though:

"Whether we would convert our JV holding into a royalty over the areas or the whole project? Yeah, for the right price of course we would. As we've shown we would convert ownerships into many structures: whether that be cash, and more recently where we've converted our ownership into equity. So royalty or any other derivative ownership of the entire project is fine for us."

Ob.

Iron ore continuing to rise 3-4% in the evening session. Handysize shipping continuing its fall.

@Ivy. In my opinion we are in a completely different situation to BCN. For starters we have no single shareholder above 3% and IMHO without a recommendation from the BoD to accept an offer, with decent reasoning, the shareholders are unlikely to capitulate. I personally can't see the BoD recommending anything below which would give their 29p options significant value. Surely they'd be looking for AT LEAST £1m each from them? 85p. Though £1m doesn't really seem that much nowadays. £200m for the lot, today, and I'd happily walk if they backed it. £1.16. But would be up for holding if not - what an interesting ride that would be! ;-)

LoL @Dallas. I'm 100% certain an increase of our Sonora DFS NPV from circa $30m to say £500-900m would absolutely increase our SP! You'd be crazy to think otherwise. Just because current investors are struggling to attribute value from Sonora, doesn't mean new investors less jaded won't value it! As to accumulation. It's not just the MM's that are filling their boots ;-)

https://www.reddit.com/r/CadenceMinerals/comments/vpr5w7/due_diligence_lsekdnc_cadence_minerals_asset/

Furthermore, if Ganfeng do go 50/100ktpa, then don't you think it quite likely that the 50ktpa stage 2 will be on our JV...? They'll want us gone - they'll offer something half decent, and we'll accept it. IMHO. Pure speculation. Downside if I'm wrong? Apparently nothing... Incredible upside if I'm not!

@Dallas. We negotiated our NPV to shares for HAS. Pretty sure Ganfeng will want and have the funds to do the same... This from Kiran: "Whether we would convert our JV holding into a royalty over the areas or the whole project? Yeah, for the right price of course we would. As we've shown we would convert ownerships into many structures: whether that be cash, and more recently where we've converted our ownership into equity. So royalty or any other derivative ownership of the entire project is fine for us."

And if it isn't for the right price, we'll simply wait - I'll simply keep adding. The market will wake up sooner or later, as Ganfeng heads to production. So many options are possible. It's a free bet at the moment: that's what the wider market seems to not understand IMHO. I know you get it. ;-)

Incredibly oversold...

I suspect Sonora will be in the news soon, along with Ganfeng's partner. That'll be us :-) "so you would see our area come forward in the mine plan and therefore would have a far higher value because the NPV would increase."

Lithium steady as she goes https://www.lme.com/en/metals/ev/lme-lithium-hydroxide-cif-fastmarkets-mb#Price+graph

Iron ore continuing to rise.

lol @Bannor. You've been buying at this incredible SP, I've been buying at it, as I'm sure many LTH have. But what we need is new investors to recognise the golden opportunity. They'll come...

To anyone new looking in I'm of the opinion that this share is incredibly oversold. You'll have to do your own research as sadly we don't have a recent broker note, but I highly recommend these two posts, one by @EV and one by myself, as decent starting points:

https://www.reddit.com/r/CadenceMinerals/comments/w6tmc0/due_diligence_lsekdnc_cadence_minerals/
https://www.reddit.com/r/CadenceMinerals/comments/vpr5w7/due_diligence_lsekdnc_cadence_minerals_asset/

and for recent updates and likely upcoming news take a read of:

https://www.reddit.com/r/CadenceMinerals/comments/w7cbvb/weekly_discussion_thread_upcoming_news_icymi_july/

I've got a VERY good feeling about this share going by news starting to come out of Mexico... DYOR! ;-)

Ob.

Just closed very strong :-)))

http://www.dce.com.cn/webquote/futures_quote_en.jsp?varietyid=I

Continued to rise in the evening session :-)

More info: https://www.prnewswire.com/news-releases/general-motors-and-livent-enter-long-term-lithium-hydroxide-supply-agreement-301593251.html

Deals are in the air...