Member Info for observer842

Indeed @Barksy - shame many of those who understand the implications and true value are likely skint from the open offer! though I did top up yesterday ;-)

If you're new and looking in for the first time wondering what's the story, then I've got your back with a link to a decent summary of what's been happening of late and what's on our ever growing plate:

https://www.reddit.com/r/CadenceMinerals/comments/t8fg95/weekly_discussion_thread_upcoming_news_icymi/

Too long? Didn't read? Then here's my take - follow the link for better formatting and additional corroborating links:

https://www.reddit.com/r/CadenceMinerals/comments/t8fg95/comment/hzolwa1/
===[
Amapa Iron Ore: Fully funded to increase ownership stake to 27% of a project that had an estimated internal valuation of $3.2B in 2008 with anticipated news flow over the coming months in the run up to the PFS due in July.

Sonora Lithium: In conversation with Ganfeng regarding KDNC's 30% JV's. Details on Ganfeng's optimisation and expansion ambitions and impact 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.
]===

Steady on there @tomcat! $22/kg medium to long term is reasonably possible - I doubt today's spot is! But then again... lol

And what price when Ganfeng made their bid for Bacanora? Probably mooted and negotiated below $10/kg, and announced around $13-14/kg by my reckoning. Our hand has to be far far stronger!

https://fastmarkets-production-web.s3.amazonaws.com/brightspot%2Fba%2F5d%2Fc24ff2059fcc4b8651f0bba2a44d%2Ffig-1-lithium-spot-prices-chart-resized.jpg

And at $22/kg it's worth somewhere in the region £70-£100 NP8 by my reckoning. For such a small bit of the project. We play our cards right on this, and Sonora could be worth multiples of this to us!

Page 207 https://www.cadenceminerals.com/wp-content/uploads/2020/06/Bacanora-FS-Technical-Report-25-01-2018.pdf

And to think the circa £20-30m NPV8 of the tiny bit in the current mining plan associated to KDNC is based on $11/kg... Ganfeng have plans to expand and this will most certainly mean more is needed from our area and much sooner, and with today's prices... :-)))

Ganfeng must be chomping at the bit to get going. Both KDNC and EMH's negotiation hands will be increasing in strength..Litchfield assays due.

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

Hopefully gives Ganfeng confidence to get on with Sonora. All the best @Kiran in negotiations - I trust you'll do what's right for the company, oh, and your 29p options! ;-)

Excellent news indeed!

Indeed @Dallas, it's not 100% clear to me either. Par for our course I guess... Perhaps the true situation is more complex than binary tick boxes? lol.

Indeed @degsie. It's not clear to me if we'll take the 27% before or after the environment licences are issued. If after then presumably we must be optimistic they will be issued soon, in fact to the level that we were "concerned" they may have been issued before we had the necessary funds to take us 27% arranged if the narrative around the timing of the placing is to be believed. I presume this is what @Dallas is getting at?

Here's the link: https://ukinvestormagazine.co.uk/cadence-minerals-highlights-low-risk-high-reward-investment-strategy/

I transcripted the last section:

https://www.reddit.com/r/CadenceMinerals/comments/ta3p37/comment/hzybch9/
https://youtu.be/WCu8tifOjWk?t=339
===[
Keith, what's the 6 month pipeline looking like for European Metals Group?

So in terms of our news flow we usually break this into two categories. Firstly we have our Definitive Feasibility Study running which will conclude later this year and so from time to time we'll have updates about how that process is tracking - various test work that we'll do: lock cycle test work; pilot plant work, etc etc, but above and beyond that it's the strategic and corporate sort of activities that we're embarking on. Our key plan: we need to get this project funded and have that funding equation sorted by the end of the year so that involves discussions with European banks with European grant schemes, but also with off-takers. For a lithium project in order to get funded you need to have bankable off-take. As the market has moved in our favour in the last 6 to 12 months, those off-take discussions are improving and it's a key area for us over the next 6 months as well.
]===

For reference:

Cinovec's $1.938B post tax NPV8 is based on $17,000/t
Sonora's $802M post tax NPV8 is based on $11,000/t

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

Futures looking strong. Over double the JRP Fe62% $61/t out to Dec 2024 - $128.65/t, and $113.18/t out to Dec 2025.

https://www.cmegroup.com/markets/metals/ferrous/iron-ore-62pct-fe-cfr-china-tsi-swap-futures.quotes.html

Now reflected in the Custeel spot. 58% above $100/t, and 62% and 65% way above the $61/t & $80/t JRP figures used to demonstrate the project is viable.

http://www.custeel.com/en/csi.jsp
===[
Date Seaborne index 58% Fe fines Seaborne index 62% Fe fines Seaborne index 65% Fe fines
2022-03-07 104.50 160.70 190.10
2022-03-04 98.20 151.20 182.00
2022-03-03 98.70 152.00 181.20
2022-03-02 92.50 144.50 173.20
2022-03-01 92.00 143.70 172.50
2022-02-28 88.50 138.10 166.80
2022-02-25 85.00 133.40 163.40
]===

A reminder of what's in progress from page 17 of the January presentation:

https://www.europeanmet.com/presentations/
]===
Progress strategic partner/offtake discussions – in active discussions with leading global (batteries/autos).
Progress EIAs and permitting for mining and processing.
Complete Flowsheet optimisation testwork in FECAB and LCP
DFS and Front-End Engineering Design (FEED)
FEED programme to produce marketing samples.
]===

For instance that "$3.2B" in the weekly is a link to a research post which summarises with:

https://www.reddit.com/r/CadenceMinerals/comments/q56bac/anglo_american_annual_reports_detailing_the/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.
]===

It should be noted that the $1.2B is a multiyear DCF, but the $660m is a single year available for sale valuation, two very different methods: Cliff's reported $1.66B before reclassification. Page 77: https://d1io3yog0oux5.cloudfront.net/_38a41730af6954bd367fe4673ee99e86/clevelandcliffs/db/1110/9911/annual_report/CLF_AR_20130315_CONSOLIDATED.pdf

Mind bendingly boggling. lol.

I make the TL;DR on upcoming news as:

https://www.reddit.com/r/CadenceMinerals/comments/t8fg95/weekly_discussion_thread_upcoming_news_icymi/
===[
Amapa Iron Ore: Fully funded to increase ownership stake to 27% of a project that had an estimated internal valuation of $3.2B in 2008 with anticipated news flow over the coming months in the run up to the PFS due in July.

Sonora Lithium: In conversation with Ganfeng regarding KDNC's 30% JV's. Details on Ganfeng's optimisation and expansion ambitions and impact 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, corroborative links and much more info!