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Alan Green: "KDNC over the past year has developed all of its assets, their progressing well. And £31m doesn't even reflect the value of the Amapa project, let alone any of the other investments, and I still think KDNC is hugely undervalued and I think the market will come to realise that in the not too distant future"

So much on our plate that could land any day it's really quite remarkable to be able to buy in this low, almost half the price of the BoD's 29p options. If you are new looking in, take a look at this now rather long summary of recent developments and anticipated upcoming news!

https://www.reddit.com/r/CadenceMinerals/comments/tj1wj7/weekly_discussion_thread_upcoming_news_icymi/

These words from our chairman continue to play through my head: "Even now, the value of this transaction is only starting to register with the markets, something I truly believe will change dramatically in the coming years."

It's not hard to see why the value of Amapa is simply stunning. For example, compare page 7 of:
https://www.cadenceminerals.com/wp-content/uploads/2022/02/Cadence_PPT_Feb2022.pdf
with page 1 of:
https://macarthurminerals.com/wp-content/uploads/2022/03/MMS-NR-FS-Results_TSXV-21-March-2022-FINAL.pdf

Perhaps it will take an analyst or the PFS to spell it out for the market to register this? I make the Amapa around a third of the CapEx, a third of the OpEx, and over 1.5x the production per year - and we have avenues to expand the mine life.

Reminds me of when various posters on here figured out the value of EMH in the early days, but it wasn't until WHI spelt it out that the market moved. :-)))

"KDNC over the past year has developed all of its assets, their progressing well. And £31m doesn't even reflect the value of the Amapa project, let alone any of the other investments, and I still think KDNC is hugely undervalued and I think the market will come to realise that in the not too distant future"

Couldn't agree more. This could be spectacular for an AIM minnow!

Very hard to value us at this time, but doesn't stop me trying! lol

https://www.reddit.com/r/CadenceMinerals/comments/teo9dk/due_diligence_lsekdnc_cadence_minerals_asset/

My thoughts exactly @Zoom!

It really is quite incredible how attractive Amapa is in comparison @EV! A third of the CapEx, a third of the OpEx AND more high quality ore produced per year! Not surprising really given how much was previously spent on the infrastructure!

VERY interesting! In addition, an investigation is underway into optimisation opportunities and potential cost savings in the transportation of the iron ore concentrate, particularly in the areas of transhipment and movement of ore from the mine to the rail loadout."

I make the TL;DR of upcoming news as:

https://www.reddit.com/r/CadenceMinerals/comments/tj1wj7/weekly_discussion_thread_upcoming_news_icymi/
===[
Amapa Iron Ore: First right of refusal to increase ownership stake from 27% to 49% of a project that had discounted cash flow valuations of $1.2B Anglo & $1.66B Cliffs and an initial valuation when purchased by Anglo of $3.2B in 2008 with anticipated news flow over the coming weeks in the run up to the PFS due in July, including: shipping commencement; rehabilitation progress; financing & off-take.

Sonora Lithium: In conversation with Ganfeng regarding KDNC's 30% JV's. Details on Ganfeng's optimisation and expansion ambitions and potential mpact on KDNC forthcoming.

LT/LS Lithium: assay results on KDNC's 31.5% JV being assessed to identify potential drill targets to earn-in up to 49% through £700k investment.

Yangibana Rare Earths: whether Hastings plan to officially bring KDNC's 30% JV forward in the mining schedule from years 12-15 as suggested in July 2021.

EMH Lithium: partner/offtake announcements for phase 1 of the project.
]===

Follow the link for better formatting, corroborating links and much more information!

Nice @degsie!

"Shares Investor Evening (London) - LIVE EVENT - 6 Apr 2022"
https://www.sharesmagazine.co.uk/events/event/shares-investor-evening-london-0604

Thought I'd have another go at estimating the impact of possible Ganfeng Sonora expansion plans on KDNC - unfortunately a bit hard to summarise here, suffice to say our fortunes are very much dependent on their plans!

https://www.reddit.com/r/CadenceMinerals/comments/teo9dk/comment/i1a1f9v/
https://www.reddit.com/r/CadenceMinerals/comments/teo9dk/due_diligence_lsekdnc_cadence_minerals_asset/

It's hard to underestimate how reassuring this news is. Very :-))) today.

"Cadence Minerals excited as first phase of Amapa Iron Ore Project completes (Interview)" (February 8, 2022)
https://www.reddit.com/r/CadenceMinerals/comments/sngah2/cadence_minerals_excited_as_first_phase_of_amapa/hwcyu42/
===[
Q4: Just in terms of your projects, I know there are many, but have there been any significant developments that you’d like to mention?

A4: I suppose the most two significant developments this year and the tail end of last year were firstly, Ganfeng had finalised its takeover of Bacanora Minerals. Ganfeng are now Cadence Minerals’ JV partner on a small proportion of the asset so we have a JV on one of the licenses, particularly the Fleur license which is the most important one. That JV stipulates the current rates of planned production from Bacanora’s bankable feasibility study in 2019 shows that that will be mined from year 8 to 19. So, it’s quite far out, but we are a JV partner now with Ganfeng on a 30% basis for us and 70% basis for them on that area. Of course, we’ll see where Ganfeng want to take this and yes, if they want to increase the production, that will probably mean that our mine plan will come early. At the moment, they’re settling in and they’ve priorities that need to work on with that asset and we are in conversations with them so we’ll see what happens.
]===

And in case you missed it, I've produced various valuation scenarios related to Sonora for KDNC at:

https://www.reddit.com/r/CadenceMinerals/comments/teo9dk/due_diligence_lsekdnc_cadence_minerals_asset/

That is fantastic news @EV! Thanks for sharing.

Iron ore futures now over twice that used in the Judicial Recovery Plan ($61/t) out to end of 2025:

"IRON ORE 62% FE, CFR CHINA (PLATTS) FUTURES - QUOTES"
https://www.cmegroup.com/markets/metals/ferrous/iron-ore-62pct-fe-cfr-china-tsi-swap-futures.quotes.html
===[
DEC 2022 157.85
DEC 2023 145.20
DEC 2024 135.95
DEC 2025 123.55
]===

Indeed @jimb2. What value Sonora to KDNC today? £4m? £17m? £22m? £105m?

https://www.reddit.com/r/CadenceMinerals/comments/teo9dk/due_diligence_lsekdnc_cadence_minerals_asset/

Tomorrow? £80m? £240m? £425? £900m?

I've no doubt whatever the asking price, Ganfeng could afford it.

What value Amapa today? £4.5m? £10m? £20m? £55m?

https://www.reddit.com/r/CadenceMinerals/comments/teo9dk/due_diligence_lsekdnc_cadence_minerals_asset/

And tomorrow? £90? £170m? £450m? £1,200m?

If you've not seen it before, some history here which concludes with:

https://www.reddit.com/r/CadenceMinerals/comments/q56bac/comment/hlt8945/
===[
This is purely my own interpretation based on reading through the annual reports and coupled with KDNC presentations and reports. Anglo bought Amapa with the intention of doing it up and selling it on as part of a package of assets. This proved harder than expected, with almost $500m of additional CapEx going into the project to scale up the operation towards 6Mtpa. At a time of unfavourable exchange rates and low iron ore prices they impaired the project significantly from earlier valuations of $3.2B to $1.2B to $660m and due to a major geological event ended up selling for between $134m and $264m, which with outstanding debt of order $233m likely valued the project around $500m - which isn't far off the $660m for sale valuation once port repair estimates of $135m are included.

With good planning, execution and fortune, former valuations could be achieved, perhaps even exceeded.
]===

We now own 27% of a project which Anglo bought its 70% stake for $1.9B...

https://www.ft.com/content/395c4b48-5651-11e2-aa70-00144feab49a

Indeed @Mullins: https://www.lme.com/en/metals/ev/lme-lithium-hydroxide-cif-fastmarkets-mb#Price+graph

I'm fairly comfortable using $22/t in my Sonora valuation estimate given spot is over 3x this! Follow the link for better formatting...

https://www.reddit.com/r/CadenceMinerals/comments/teo9dk/due_diligence_lsekdnc_cadence_minerals_asset/
===[
Totals
Asset Date Cost/Market Market/Sale/NPV Sale/NPV NPV Potential
Sonora 2022-03-15 £4-17m £22-105m £80-240m £425-900m

Breakdown
Sonora Estimate date: 2022-03-15
Cost/Market Lower: Estimate of spend to date from accounts. Upper: Ganfeng's offer values BCN's current 17.5/35ktpa mining plan at circa £230m. KDNC has circa 3.6% of the current mining plan associated with it from its 30% JV's. Ganfeng's offer for BCN's 48.2% values the 3.6% at £17m. Value unlocks: Favourable resolution of Mexico's Lithium nationalisation plans.

Market/Sale/NPV Lower: Post-tax NPV8 of the 3.6% in the current mining plan associated to KDNC based on $11/kg. Upper: Ganfeng's offer values BCN's reserves circa £230m. KDNC has 18.58% of the reserves, meaning BCN has 40.71%. Value unlocks: Ganfeng makes an offer for the 3.6% or the full 30%.

Sale/NPV Ganfeng's offer likely mooted when lithium prices were below $10/kg, and announced when around $13-14/kg. Prices currently $67.86/kg. Lower: Post-tax NPV8 of the 3.6% in the current mining plan associated to KDNC based on $22/kg. Upper: Conservative estimate of 3x this as a consequence of expansion plans meaning KDNC's 30% JV being required sooner and in greater volume. Value unlocks: Ganfeng make a reasonable offer based on their expansion plans or a favourable toll processing/royalty agreement is reached.

NPV Potential Ganfeng set up another 17.5/35ktpa operation in the south of the Pit, fully contained within the JV area. Lower: 30% of NPV8 $802m + £240m from the north pit . Upper: 30% of NPV8 $2.9B at $22/kg + £240m. Value unlocks: Long term hold with decent toll processing/royalty agreed.
]===

Bit of a surge towards towards the close: http://www.dce.com.cn/webquote/chart_en.jsp?symbol=i2205

https://www.reddit.com/r/CadenceMinerals/comments/teo9dk/due_diligence_lsekdnc_cadence_minerals_asset/
===[
Summary
I've broadly split the valuations into categories, but because I find aggregating the valuations useful there is overlap in the tables below:

Cost: I find cost useful for highlighting lower end value for unlisted assets, but pretty meaningless for listed ones, where market is more appropriate.

Market: For unlisted assets this is determined by recent contributions to increase our stakes or actions and agreements by others.

Sale: What we might expect to realise in a sale of asset.

NPV: Net Present Value based on current mining plans, ranged with low, high product sales, and likely expansion plans.

NPV Potential: Potential expansion plans.

But what about the market cap today I hear you ask? The market decides that, and I'm not suggesting it should be deciding £1-2B, nor I doubt anyone informed would suggest £25m is reasonable either - so somewhere in between! Very roughly and assuming most things go our way my best guess is:

Short to medium term: £50-200m

Medium to long term: £200-500m

Longer term: £1-2B

Totals
Asset Date Cost/Market Market/Sale/NPV Sale/NPV NPV Potential
Amapa 2022-03-15 £4.5-10m £20-55m £90-170m £450-1,200m
Sonora 2022-03-15 £4-17m £22-105m £80-240m £425-900m
Yangibana 2022-03-15 £3.5-7.5m £7.5-15m £17-50m £50-100m
LT/LS 2022-03-15 £0.8-1.3m £0.5-2m N/A N/A
EMH 2022-03-15 £9m £9m £30-45m £50-100m
Passive 2021-06-30 £698k £698k N/A N/A
Cash 2022-03-15 £2-4m £2-4m N/A N/A
Total 2022-03-15 £24.5-49.5m £62-191m £220-500m £1-2B
]===

Thought I'd open up my best guess asset valuations for discussion. Contributions/corrections most welcome!

https://www.reddit.com/r/CadenceMinerals/comments/teo9dk/due_diligence_lsekdnc_cadence_minerals_asset/