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I presume they've messed up @Bannor. [Head in hands emoji]

I forgot the quote re other off-takers! "Lithium miner Bacanora prepares for substantial fundraise" (01 Mar 2018) https://www.sharesmagazine.co.uk/article/lithium-miner-bacanora-prepares-for-substantial-fundraise ===[ �We were looking at them for stage two production; other parties have expressed an interest so we don�t see a problem if the NextView deal doesn�t happen,� he adds. ]===

Great @Fukurokuju79. I've had a look around too, and that is the only article I can find that mentions the debt to equity split. The proactive video interview is the one I transcribed earlier. ;-) Here's the relevant quotes from the article you linked to: "Lithium miner Bacanora prepares for substantial fundraise" (01 Mar 2018) https://www.sharesmagazine.co.uk/article/lithium-miner-bacanora-prepares-for-substantial-fundraise ===[ Chief executive Peter Secker says $200m of the $450m target will come from debt financing. The remaining $250m will come from issuing new shares to investors in exchange for cash. Secker is confident that half of the equity component will come from existing major shareholders including Igneous Capital, BlackRock, M&G and Japanese commodities trader Hanwa. �The rest of the money should come from investors in the US, London and the Far East,� he says. ]=== Note the author didn't quote the equity split, so it's possible the $200m debt, $250m equity was given as an example to the interviewer or something he (potentially incorrectly) deduced. I found this 7 minute interview whilst hunting around, which is certainly worth taking another listen to! ;-) "Bacanora Minerals - An Introduction" (19 Dec 2017) https://www.brrmedia.co.uk/broadcasts/59e74b6f6963e76d8bed566b/bacanora-minerals-an-introduction In the interview Peter Secker mentions the potential to scale to 50ktpa (and by implication beyond!) should the demand be there ;-) I'm surprised the market hardly blinked at today's news - if that doesn't help secure a good debt deal I don't know what will! Oh wait, yes I do - another off-taker ;-) Ob.

Indeed @coopgare. It's a headscratcher on what price the equity might be raised at. If existing holders weren't going to contribute, then it follows that they should wish the raise price to be as high as possible. If all existing shareholders were allowed to partake, then those that could afford to contribute their maximum would want the share price to be as low as possible, whilst those who couldn't afford to contribute should want it to be as high as possible - (I think that logically follows!) We are led to believe that the cornerstone investors will be invited to partake, and possibly new UK and US investors, but possibly (probably?) not existing small private investors, or even the likes of KDNC (who couldn't contribute much anyway), and then Hanwa has a right to increase to 19.9% which they have expressed an *intention* to do so. So what is the optimum debt to equity ratio and at what equity raise price? And optimum for who? Beats me! I'm hopeful that maximum debt will be raised, with the market promptly realising its pricing folly re-rating to something more in-line with BCN's peers (e.g. on an in-ground basis, or NPV8 basis), followed by the remaining funds being raised at whatever the share price settles to on anticipated future returns knowing the remainder of the equity which must be raised - you know: how markets should work... ;-) Ob.

It's apparent from the feasibility study that stage 2 of the project is funded organically from proceeds @$11,000/t LCE from stage 1. However, we know LCE Q1 contract prices were around $16,400/t according to SQM (care of Matt Bohlsen). Perhaps a deal is being negotiated with Hanwa to sell the first 5 years guaranteed at around this price to enable large low interest debt to be secured against this contract? This would mean an additional $5,400/t LCE before tax profit. Looking at "Table 22.1.2: Project Annual Cashflow Summary" of the FS, it would mean for each of the first 5 years there would be additional profit available to pay back the debt as below: Year 1: 11.6kt * $5,400 = $63m Year 2: 19.4kt * $5,400 = $105m Year 3: 19.8kt * $5,400 = $107m Year 4: 19.3kt * $5,400 = $104m Year 5: 30.1kt * $5,400 = $163m Those sorts of numbers could very well mean that the project could be financed through $300m debt, perhaps a little more even, which could be paid back, with interest, in a comparatively short period of time. Wow! ;-) If it plays out like this, that 365m shares was one helluva curve-ball! Ob.

Good question @bluegrass! In EMH's PFS they state: "Based on this experience the board believes that a traditional debt: equity ratio of 70:30 is potentially achievable for the Project based on the PFS results. This would result in a capital and working capital contribution of approximately A$175m which is in-line with the Company�s current market capitalisation." As for BCN, I take the recent authority to issue up to 365m new shares, as a backstop for a 100% equity raise at around 90p or so. But depending on how strong our hand is, it could very well be the other way round to what I suggested. e.g. it could be $300m debt, $150m equity. Now that would be interesting, and might very well put a rocket up the share price ;-) Anyone got any memories or evidence of the sort of debt to equity ratios that have bandied about for Sonora? Ob.

I stand corrected. $450m has been on the cards for some time: "Bacanora Lithium advancing Sonora debt and equity financing" (12 Apr 2018) https://www.youtube.com/watch?v=ujeomaTId6c&t=1m5s ===[ ... we are going to finance it through a combination of debt and equity. Existing shareholders - very supportive and then we already have Blackrock on the register, we have M&G on the register, Igneous Capital on the register, Hanwa, the off taker on the register, Capital group on the register. So we have a strong supportive shareholder base. We are looking for new investors to come in, out of the UK obviously, and some out of the US. So those discussions are going well and are ongoing, and we are talking to debt providers. So this will be a combination of debt and equity. The debt I would think within the next couple of months and then equity will follow after that. And in total you are needing $450m correct? Capital cost of the plant is $420m and we need $30m of working capital, so a total of $450m. ]=== It'll be interesting to see how the share price responds to the debt announcement! ;-) Ob.

I agree @Fukurokuju79. I'm going to put my finger in the air and take a guess at $300m equity - $150m debt. What do you think? Will Hanwa end up owning 20% of BCN post funding I wonder? Have they kept up their side of the agreement which gives them that right? According to various BCN announcements they own less than 10% (9.2% on BCN's AIM Rule 26 page), but shouldn't they have issued an announcement if they have fallen below 10%? Perhaps they never owned more than 10% in the first place? In fact I think I concluded they were 1 share short... Corporate fun and games with a large helping of misdirection at play no doubt! ;-)

I see, well if you like reading between the lines... ;-) "Third Quarter Financial Statements" (24 May 2018) http://ir.euroinvestor.com/Solutions/BacanoraMinerals/2482/newsArticle.aspx?storyid=13931058 ===[ The current FEED schedule is to have designs, cost estimates and process guarantee scopes completed in Q2 2018 with orders for long lead items being placed at the end of the FEED process in Q3 2018 The current timetable for the plant construction is subject to completing the US$420M project financing strategy and final Board approvals - schedule will be updated at the end of the FEED process ]=== Notice the Q3 and $420M Today's announcement: "Positive Progress at Sonora Lithium Project" (4 June 2018) ===[ The current FEED schedule is to have designs, cost estimates and process guarantee scopes to be substantially completed by end Q2 2018, with orders for long lead items being placed at the end of the FEED process in Q3 2018. The current timetable is based on a planned commissioning of the project in Q1 2020 and lithium carbonate shipments commencing subsequent to commissioning. This schedule and final project go ahead is subject to completing the US$450 million debt and equity project financing strategy and final Board approvals. The schedule will be updated at the end of the FEED process. ]=== Same Q3, but the raise has increased by $30m to $450M And from the corporate presentation which looks like it was updated recently - today going by the date of the filename. "Developing the World�s Next Major Lithium Project" (June 2018) http://www.bacanoralithium.com/cms/wp-content/uploads/2018/06/BCN-Presentation-June-2018-no-management-slide-04.06.18.pdf ===[ Construction of Stage 1 17,500tpa plant scheduled to commence in H1 2018 ... 2018 H1: Detailed design, project debt and equity financing, site access preparation ... Moving to construction phase in H1 2018 ]=== Clearly they are in discussions as we type, and it wouldn't surprise me to hear an announcement for some, if not all of the funding any day really - assuming it's coming! ;-) Ob.

@coopgare "Financing pushed out to Q3 which is disappointing but I'm not too concerned." Where does it say that? I see they've upped the declared amount to $450m from $420m. An announcement could be forthcoming any day IMHO. The June corporate presentation is available by the way.

I think you might misunderstand what I'm trying to achieve @tomcat - which is to arrive at a spread of estimates of the likely worth of our Sonora JV in relation to the current value of BCN, whatever that may be. I know many of us here just "believe" they are worth into the triple digit millions to us, me included. However, I'd like to get a feel for when the rest of the market might start to come round to the same point of view... ;-) For instance, page 40 & 41 of the Edison report is quite revealing. It shows that unlike certain other metals, the market is currently not willing to associate the full circa $200/t in ground LCE average reserve value to the Sonora reserves. @$200/t the Sonora 4,515kt LCE reserve is worth $903m. We have claim over 839kt of that which comes out at $168m. What needs to change for that value to be recognised in both BCN's and our share price? Funding to demonstrate the clay is viable at scale? Actual production at stage 1? Stage 2? Stage 3??? Currently our JV is contributing 0 to our share price. This will change, but what will be the trigger? It's an interesting discussion point, and one well suited for these discussions boards IMHO! ;-) For instance I would say by looking at figure 15.4.1 on page 130 of the feasibility study it's likely that somewhere between 50% and 100% of the ore mined in years 20-39 would come from the JV areas. What's your estimate? And if you are having a hard time contemplating years 20-39, think of it like this: what happens when we have orders in place for up to 70ktpa of LCE, 100ktpa?. It should happen by the mid 20's if the demand follows and S curve take up as some are predicting! ;-) Ob.

I just hope our BoD do it properly and place a true present value on our JV if they are considering selling it - much greater than the $30m (before tax) @Kiran mentions IMHO. From that point of view it's in BCN's interest to only consider a mining plan of 19 years, to the detriment of KDNC shareholders. Out to 40 years (which other feasibility studies consider) sees our NPV increasing substantially from the $30m, their's not so much. Of course if BCN gets funding it's likely they'll be mining a lot more than 35ktpa mid-decade than currently planned, and we'll see the $30m NPV increased substantially in the first 19 years. It's worth reading the Edison report I linked to earlier. Sonora is significantly undervalued on a total resource basis - because it is unproven, same for Cinovec = plenty of upside ;-)

@tomcat "you know very well that double 42% is 100%" ;-)

@tomcat you never confirmed the likely additional NPV if the mine life is extended out to 39 years ;-) ob ===[ $184.5m / (1.08^20) + $184.5m / (1.08^21) + ... + $184.5m / (1.08^39) = $39.6m + $36.7m + ... + $9.2m = $420m ]=== And I was all ready to give you top marks had you said: $184.5m * (1.08^-19 - 1.08^-39) / 0.08 = $420m ;-) And for reference, a few other years: 10 years: $184.5m * (1.08^-19 - 1.08^-29) / 0.08 = $287m for ever: $184.5m * 1.08^-19 / 0.08 = $534m Considering from year 20 isn't too important for BCN as it doesn't add much to their value, but it's clearly quite important for us! ;-) Ob.

Wow. Over double 42% now! "Global electric car sales - April global electric car sales were up an amazing 93% year on year."

I believe the current situation with Tesla is still this: "Bacanora Board Changes and Corporate Update" (24 November 2016) http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=1986506 ===[ Bacanora and Rare Earth Minerals plc (AIM/ISDX: REM; OTC REMMY), together advise that the financing condition in the conditional lithium hydroxide supply agreement ("the Agreement") previously announced on 28 August 2015 has not been met under the terms of the Agreement. We advise further that we have had extensive discussions with the customer as to the feasiblity of securing project specific financing pursuant to the terms and conditions of the Agreement, that those discussions have now concluded, and therefore we are discontinuing further efforts to secure project specific financing pursuant to the Agreement. ]=== Because the financing condition was not met, the conditional supply agreement is no more. There is a slight ambiguity as to whether the discussions with Tesla that have concluded took place before the declaration that the financing condition was not met, or after. If after, then it is unclear what the outcome of those discussions were. On balance I'd say during, which means it's likely that Tesla are no longer in the picture. However, if they are no longer in the picture, I would have thought we could mention the word hydroxide now? Can we produce it or not? And if so, at what cost? That announcement certainly didn't win the announcement of the year 2016 for clarity! No doubt, those without a conspiratorial bent think it's perfectly clear ;-) Ob.

@tomcat - a bit old but this might be up your street: "Mining overview: Unlocking the price to NPV discount" (06/12/2017) https://www.edisoninvestmentresearch.com/edison-tv/clip/mining-overview-unlocking ===[ Every year, Edison produces a mining review in which it updates its in-situ values of resources for explorers and re-runs its gold price analyses. This year it has supplemented this with an analysis of the key price/NPV ratio for developing projects and an in-depth look at project NPVs, IRRs, grades, size and jurisdictions, etc and how these affect company valuations. In this interview, Ian McLelland asks the author of the report, Charles Gibson, to describe this year�s conclusions. ]=== "Mining overview: Unlocking the price to NPV discount" (16/11/2017) https://www.edisoninvestmentresearch.com/?ACT=19&ID=19909&dir=sectorreports&field=19 ===[ Equity investors are well aware of the returns achievable in mining when markets get behind an early-stage story. This can drive share prices quickly in often wildly different directions, depending on a range of criteria, ie the size and stage of resource, commodity type, listing country, etc. For the last few years Edison has published its annual mining sector report, which assesses how markets consider and potentially value these different criteria. The analysis is not simple and we attempt to normalise for anomalies (of which there are many in mining) to develop a suite of tools that investors can use to assess the plethora of different investment options out there. Our analysis throws up interesting observations that can help companies and investors alike understand where there are opportunities for value creation, and where there are risks of value traps. ]===

I went back through a few tweets. Just noise... I either missed this, or ignored it as I didn't realise it was written by @kiran. Worth a read! "SQM's New Deal - Positive for Markets and Critical to Adoption of EVs." (January 26, 2018) https://www.linkedin.com/pulse/sqm-new-deal-positive-markets-critical-adoption-evs-kiran-morzaria I tried to check back on here to see whether it was discussed at the time but it seems our history only goes back to the end of March. And my personal KDNC history to the beginning of April, which is a very poor show LSE! Same for other posters I checked by the looks of it. What's going on...? Ob

I'm sure everyone reading this follows Matt, but if not - here is the link: https://seekingalpha.com/author/matt-bohlsen/articles#regular_articles Some great EV lithium miner analysis published the past few days covering some of our assets.

Indeed @Bannor - circumstances change, in the case of Yangibana, RE prices fell and our JV got pushed into the second decade of mining with a question mark on it. Circumstances can change again. Valuations can go down as well as up, and up as well as down - and for good measure: sideways! ;-) And in the spirit of keeping it real, that �10-35m is based on an assumption that the HAS share price is around double that of today. So if we were to sell today at a fair risked based NPV valuation, we are likely talking �5m-�15m, call it �10m. But these things change (!). Let's see what is announced today/tomorrow and how the HAS share price reacts... ;-) As I understand it, we are only delayed by a month on the Argentinian plan. But if the permits haven't been granted by the end of June it's an additional months delay per month, and at that point I wouldn't be surprised to see us announce another similarly structure venture if we haven't has reassurances the permits will be issued imminently! I'm OK with this. You on the other hand... ;-) Ob.