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Indeed @addicknt! What's your take on this:

http://ir.euroinvestor.com/Solutions/BacanoraMinerals/2482/newsArticle.aspx?storyid=13990969
===[
In addition to the SIA, Bacanora and SGRF have also entered into an Off-take Agreement subject to the same conditionality as the SIA. The key terms would be an off-take option to purchase up to 10,000 tpa of lithium carbonate produced (with a reasonable endeavours obligation to increase this by a further 3,000tpa) at the Sonora Project predominantly during Stage 2 for a period of 10 years from the date on which Stage 2 is achieved.
]===

In particular - who is the reasonable endeavours on? (seller or buyer? - I presume buyer.) and if it doesn't all come from Stage 2, are we talking about Stage 1 (Hanwa relinquishing some of their 17.5ktpa?) or is this the first hint of a Stage 3?

Stage 2 off-take announced. JV takes one step closer to production ;-)

@theiceberg: "Remember over 17.5k tonnes for a few years and then 26k tonnes of lithium already sold now each year until 2030." Where do you get 26ktpa from?

Interesting take:

"Will The Lithium Boom Upend The Potash Market?" (Jul. 13, 2018)
https://seekingalpha.com/article/4187205-will-lithium-boom-upend-potash-market
===[
Takeaways

Based on current developments, I do not think the lithium boom will result in a potash glut. Lithium producers are busy developing their core lithium business, and potash, though abundant in brine, is not a natural by-product of lithium production.
]===

Unlike the expanding brine operations, the new clay's ARE expected to contribute to the (apparently under-supplied) potash market. Taken from the BCN feasibility study:

http://www.bacanoralithium.com/pdfs/Bacanora-FS-Technical-Report-25-01-2018.pdf
===[
The construction of the Sonora Lithium Plant will be in two stages. Stage 1 is designed to
process 1.10 Mt/y of ROM feed, at 0.46% Li, to produce a design minimum 17,500 t/y
battery grade Li2CO3 and 17,000 t/y K2SO4. The potassium sulfate produced is expected to
be sold as a Sulfate of Potash fertiliser. About 42,000 t/y of Na2SO4 is produced in Stage 1.
This is not expected to be saleable and is therefore gifted or stored in a lined tailings storage
facility.

Stage 2 involves adding a duplicate 1.10 Mt/y train, to be constructed for production in Year
5, to treat a combined total of 2.21 Mt/y of ROM feed, at 0.41% Li, to produce a design
minimum 35,000 t/y Li2CO3, 28,800 t/y K2SO4 and 73,000 t/y Na2SO4.

For clarity, Ausenco’s SysCAD modelling for Stage 1 produces 21,113 t/y of battery grade
Li2CO3 and 17,808 t/y K2SO4. Similarly, modelling for Stage 2 produces 35,918 t/y of battery
grade Li2CO3 and 28,805 t/y K2SO4. These models were used as the basis of the steady
state operating cost calculation.
...
19.3 Potassium Sulfate

The primary by-product produced at the Project is potassium sulfate (K2SO4 or sulfate of
potassium “SOP”). SOP is a high value fertilizer with particular application for producers of
fruits, vegetables and nuts. The global demand for SOP is currently ~ 8 million t and is in deficit.

The North American market is currently ~500,000 t. Mexico is an important market with annual
demand of 50,000 to 90,000 t. California is also a large market with annual demand typically
greater than 125,000 t.

Global production capacity is predominantly located in China. Within North America there is
currently only one supplier, Compass Minerals, with operations in Utah. There are no existing
Mexican producers. Mexican supply is typically sourced from Chile, China and Belgium.

Bacanora has commissioned a market study on the SOP market from Green Markets
(Bloomberg). Green Markets forecast North American SOP pricing of $550/t for the next ten
years.
]===

It's rife @tomcat. Good background reading and quite relevant for today's market.

"Elon Musk vs. Short sellers" (Jun 18, 2018)
https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-sellers.118431/

Take note of the last few paragraphs about becoming self-sustaining as a (partial) guard against (financial) shorts and a means to strengthen future negotiation positions when raising capital. Let's get that 17.5ktpa cash-flowing and rapidly expand from there. Of course if the demand for greater production is here today and the funding to do so is on attractive terms, then there's little point in waiting! To 50ktpa and beyond! ;-)

Cheers @Barksy - interesting read. I wonder if someone has pointed out they've underestimated the economic worth....

"Induced Plant Accumulation of Lithium" (6 February 2018)
www.mdpi.com/2076-3263/8/2/56/pdf
===[
Li prices are at an all-time high and the price is expected to increase in the coming years, having increased massively since the early 21st century from $1590 per metric ton in 2002 to $9100 in 2017
...
Grown under the conditions set out in this work, five tons of dry plant matter should contain approximately 1.55 kg [@ob typo: should be 15.5kg] of Li worth around $141.05/ha.
]===

Their mistake is to use $9,100/t as the 2017 price for lithium, when in fact it is an estimate of the price of lithium carbonate equivalent (LCE). The lithium price for 2017 was over 5 times this, meaning their headline yield is likely over $1,000/ha at today's prices. Perhaps it's best we don't point out their mistake after all...! ;-)

Ob.

Stop the press for @Bannor positive of a KDNC asset that isn't Sonora Shocker. ;-)

I can certainly see the story and developments from your perspective @Bannor! ;-) However my personal take is that the BoD would be remiss to do what I presume you would have them do: rein in all future spending effectively putting KDNC in caretaker mode with all fingers crossed that other companies will eventually mine our JV's (which are not in our control). Like HAS, BCN have other assets/areas they could further should they so wish, perhaps in a strategical play to force our JV's to be sold on the cheap (which I believe HAS is doing). No, I'm fully behind the plan that we take our destiny into our own hands which if played right could lead to plus 1p into the run up to the expiration of the BoD's performance options, even in the absence of value from our Sonora JV's, and strengthens our Sonora JV resolve to hold rather than sell.

Perhaps you don't worry as I do that the BoD might let the Sonora JV's go for substantially less than they are worth so as to improve the share price to 1-2p. Perhaps I shouldn't worry, as 1-2p would be great from here, but ultimately I'd rather see San Luis or Zulu help the BoD get their options, or a sell off of the HAS JV's or EMH should their share price re-rate on possible imminent news, leaving the Sonora JV's to subsequently deliver several more pennies - and with lithium demand ramping up as I see, perhaps leading to a share price into the double digit pennies at a later date, perhaps in the early 20's?

Everything @Kiran has been saying the past year is leading me to believe this play is possible as he appears to be on board with the energy disruption which is taking place before our very eyes! Yes, it's unfortunate the San Luis permits haven't been granted to date. My understanding is that at some point this month or next we'll start to fall behind schedule a day a day, but at the moment I presume we are still just about on, or ahead of schedule.

In terms of a sell off on the rise up to a penny and beyond - absolutely there will be! But sometimes a tide of buying pressure just can't be held back ;-)

In terms of @Kiran selling our successes to date IMHO he is right to separate the fundamentals from the share price - however, he'd also be right to link the two if the share price had done great but the fundamentals hadn't. i.e. his job is to look for and promote the best in the company. That's what I expect from a figure head - especially if I'm paying for it! Although I do worry a little that if the share price "disconnects" from the fundamentals once more as it previously did @Kiran might end up talking it back down! In fact I worry I might end up talking it back down... Someone shoot me if I do. ;-)

Ob.

Well if @Bannor is reiterating his take for the umpteenth time, here's mine ;-) When we were worth over 2p it was on hope and hype that the Sonora JV's would be mined first or sold to e.g. Tesla. BCN made it clear in their PFS they were planning to mine the JV in later years, and the increased lithium price meant that the Tesla deal fell apart. Around two years ago we arranged a $15m CLN which was to be used for two purposes: prevent the BCN re-domicile which left unchecked could have resulted in unfavourable treatment of our JV's, and secondly as a fighting fund to help aid in either a merger or an attempt to take total economic ownership of the JV's beyond 50%. Due to regulatory shortcomings with our Mexican backers, we found ourselves stumping up £1.5m in fees to arrange the shortfall in funds at short notice.

So where does that leave us? Clearly the attempt to bring the JV's forward in the mining order by hook or crook (!) failed. However, we are led to believe that the operating terms of the JV's are expected to be better than if we had left them unchecked had the original attempt at re-domicile succeeded. So not great, but could be worse.

IMHO given the past experience to date of our joint ventures (both HAS and BCN) the market is well within its rights to place zero value on these until their worth is undeniable. For HAS this means they either have to enter the mining schedule or be sold, and for BCN it probably means one or a combination of the following:

1. Disclosure of the operating terms of the JV
2. Plan to expand the plant to 35ktpa
3. Part or fully sold.

I am hopeful that the operating terms will be reasonable, and very optimistic that within a few years (perhaps days!) firm off-take for 35ktpa could be announced, and that by the early 20's plans to double or treble this rate could be in place. That's why I continue to mark as a Strong Buy as I place value on the JV's despite (most) of the market not. But in the meantime what this company could really do with is a positive cash flow, and the route to that is San Luis & now Zulu. I'm quite disappointed that the San Luis permits have yet to be granted, as I'm sure our BoD are! The Zulu Lithium deal looks good, but it's hard to push aside the nagging feeling that it is a backup to the San Luis plan, should the permits fail to materialise in the next few months: the BoD need the share price significantly higher than it is today for them to receive their performance shares. It's possible the plan might have always been to push ahead on these two fronts in the run up to February 2019.

The last video interview by @Kiran was great - he's becoming a dab hand, despite the occasional slip up. "ineffectively" indeed @Bannor! ;-)

"Cadence Minerals says some are too negative on lithium" (5 Jul 2018)
https://www.youtube.com/watch?v=0I_y_Z0jGHk

Ob.

@Bannor "& it's been pretty much downhill ever since...." gathering momentum nicely for that ramp at the bottom, or the crash and burn if we miss it... ;-)

My strong buy opinion is based on my perceived risk to reward ratio being quite spectacular for this share at the moment. But this certainly doesn't mean success is a cert from here!

Ob

I wonder if we have any other earn-in projects on the table today, or in the wings for tomorrow? I certainly wouldn't be surprised - but whether we'll progress them will presumably be quite dependent on the outcome of BCN and in particular the status of our JV's!. 7am Monday RNS announcing funding? Certainly possible, but if not, I suppose we'll have to stay on our toes for the next few weeks/month or two in suspense! ;-)

Surely the San Luis permits will be granted in July? As announced recently we were ahead of schedule, I wonder when the tipping date is? i.e. the date by which if the permits haven't been granted we start to be behind schedule - a day, a day.

Ob.

I'd love to claim I made that typo on purpose to make a point, but alas! ;-)

@maddog. 50 sounds like 15. 60 sounds like 16. 70 sounds like 17. I could go on. No matter what you think you thought you heard - it is clear to anyone of sound mind that even if he did say 15 (which he didn't!) he meant 15. ;-)

@Huinhwa. You are wasting your time on @maddog. I've been over it with him many times and he appears incapable of understanding the difference between book value and market value. i.e. the books are what they are: we invested circa £15m and it is now worth around £24 million - by our reckoning (understandably the unlisted assets are harder to value than the listed assets); whilst the market cap is what it is - decided by those buying and selling shares: us! ;-)

As you said last night the share price was blown out of all proportion several years back on the hope and hype that we might be able to bring the Sonora JV's to production first, or indeed sell them to the likes of Tesla. But BCN had other plans... You'll see that from the PREM deal and the various interviews surrounding it, that we have learnt our JV lesson and appear to have been quite careful in setting the terms of the deal so as not to be screwed over once more. A little over $5m seems good to me - and is probably less than half of what the PREM market would have expected us to pay this time last year for pretty much the same options. They seem reasonably happy with the deal, as do I ;-) And we only need to find $1.5m in the next 2 months or so - assuming BCN doesn't bomb this really shouldn't be a problem!

Ob

Nice to see that Matt is still long EMH! Oh, and that contract prices are still significantly higher than those used in both the BCN and EMH studies. ;-)

"Lithium Junior Miner News For The Month Of June 2018" (Jun. 27, 2018)
https://seekingalpha.com/article/4184266-lithium-junior-miner-news-month-june-2018
===[
During June, 99.5% lithium carbonate China spot prices were down 3.10%. Global Lithium Carbonate Equivalent (LCE) contract prices are around US$16,000/tonne, and are up about 20% on 2017 prices. SQM recently reported its average LCE contract price in Q1 2018 was US$16,400/MT.
]===

Will they, won't they rise towards the end of this year and into next? Where's a chartist when you need one!? ;-)

Ob

Indeed @CHRH! It pleases me no end that we have seemingly convinced our BoD that the battery revolution we stand on the cusp of is real and now - and hopefully(!) means we won't let our Sonora JV's go too cheaply! Although a part of me likes the idea of transferring them for BCN shares, but I doubt the price we'd get would come close to our expectations at this stage - unless of course 70ktpa is on the table ;-)

I'm OK @ivybush, just thought I'd watch from the sidelines for a change ;-)

Great news the past week - with hopefully more to come! Roll on the San Luis licences "which the Board anticipates materialising quickly," to really get the ball moving and drawing ever more eyes our way! ;-)

Oh, and of course HAS, BCN, EMH, etc news could be imminent - as if we all didn't know what a critical few months we could be about to experience, one way or another, with more news this week clearly being on the cards!

Ob.

According to the lithium bull: "June 4, 2018 - #Lithium Rockin� in the Free World" http://www.libull.com/June_4-Rockin'_in_the_Free_World.pdf ===[ Nemaska�s full financing equates approximately to a 60/40 debt/equity split ]=== a 60:40 debt/equity split for Sonora's $450m fund raise would be $270m debt, $180m equity.

Flying to or from signing the deal of the decade perhaps? ;-)

It'll be interesting to see what excuse they give.