Member Info for observer842

@Bannor: "Obs .. as advised earlier they have clarified that it has nothing to do with HMRC rules but to the offer itself.". Must be frustrating! I suspect they'll slap themselves on the forehead when they realise that the offer doesn't stop you from buying the shares in an ISA account from funds outside of the account - so long as the deposited shares, which are just the same as any other share at this stage, are then immediately moved out of the ISA. The rules appear to allow for this particular situation. The offer of course has nothing to say about this movement as they are just ordinary shares at this point. Only trying to help - and interesting that it's not just HL that appears to be allowing this!

Personally I think they are confused between moving shares and moving rights. The rights can't move in this instance, but the shares you have bought can and must, why else would this line even exist in the rules if this were not the case?

https://www.gov.uk/guidance/stocks-and-shares-investments-for-isa-managers#rights-issues-and-other-offers-to-shareholders
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An investor may give an ISA manager sufficient cash to take up the offer outside the ISA, provided the ISA manager immediately transfers the investments to the investor to be held outside the ISA.
]===

The line isn't required for rights issues as they can move, so it is referring to offers that can't move. All IMHO of course! Maybe someone should contact HL, though doing so may put a spanner in their plans! lol.

Ob.

@Bannor. Might be worth pointing them to this from the HL page which now includes Cadence:

https://www.hl.co.uk/shares/corporate-actions
===[
Buying the shares in a different HL account

If your shares are in an ISA / LISA, you can buy the new shares either in that ISA / LISA or in an HL Fund and Share Account. If you hold shares in an ISA and want to buy the new ones outside of the ISA in an HL Fund and Share Account, please let us know in the further details box.
]===

@Bannor, for what it is worth I think your broker is confused. It is true that the entitlement can not be transferred on open offers (which also means to outside of an ISA), but that is not what is being done here, the shares are bought in the ISA using cash from outside of it, and then the shares are immediately transferred out of it. This IMHO is allowable under the rules as stated on the link I gave, and clearly from the links I gave previously HL are following this practice at the moment. I guess we'll have to wait to see if anyone reports it allowable for this particular open offer on HL/others!

From the horse's mouth:

https://www.gov.uk/guidance/stocks-and-shares-investments-for-isa-managers#rights-issues-and-other-offers-to-shareholders
===[
An investor may give an ISA manager sufficient cash to take up the offer outside the ISA, provided the ISA manager immediately transfers the investments to the investor to be held outside the ISA.
]===

@Bannor. Maybe point them towards this:

https://www.hl.co.uk/help/dealing/corporate-actions/introduction/a-share-in-my-isa-is-subject-to-a-corporate-action.-does-this-have-any-additional-implications

and:

https://www.hl.co.uk/shares/corporate-actions

If you are looking in for the first time I recommend taking a look at this:

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

I've attempted to summarise the upcoming news bit in a comment. Follow the links for better formatting and much more information:

https://www.reddit.com/r/CadenceMinerals/comments/smffyh/comment/hvx3ho6/
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I make the TL;DR on the upcoming news front as:

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

Sonora Lithium: Ganfeng's optimisation and expansion ambitions and how these impact KDNC's 30% JV's.

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

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 agreements.
]===

Indeed @Cartunehead, although we were all hoping and indeed expecting the 20% news to land before any potential raise for the 27% was initiated, the fact the funds have now been raised stands us in great stead going forward. As @EV says, and perhaps @Kiran hinted at, maybe we are now obliged to take the 27% simultaneously to the 20% if all of the preconditions are met? I know many may have held off topping up if they thought a placing was increasingly likely following that line of thought, but sadly not me! Still I'm fortunate enough to be in a position to take my 1:20 up, and some, as funnily enough I believe 20.5p is an absolute bargain...

Ob.

"TRADING UPDATES: Cadence adds to fundraise" (Fri 21:26)
https://www.lse.co.uk/
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Cadence Minerals PLC - London-based investor in mineral resources - To raise about GBP1.5 million through open offer of up to 7.4 million shares at 20.5 pence each, which will be offered at 1 open offer share for every 20 existing shares held. The open offer available to existing shareholders for "opportunity to invest on the same commercial terms" as placing announced earlier this week. Raises gross proceeds of GBP4.1 million from oversubscribed placing of 19.5 million shares at 20.5p on Thursday.
]===

For those new looking in, part of the raise is to "invest further in the Amapa Iron Ore Project ("Amapa Project" or "Amapa") increasing its stake to 27 per cent, as announced on 29 December 2021.".

A summary of upcoming news, some imminent, can be found below, follow the links for better formatting and additional links:

https://www.reddit.com/r/CadenceMinerals/comments/sgqi0d/weekly_discussion_thread_upcoming_news_icymi/
===[
Amapa Iron Ore: 20% ownership of a project that had an estimated internal valuation of $3.2B in 2008 due in the first two weeks of February. 27% to follow shortly.

Sonora Lithium: Ganfeng's optimisation and expansion ambitions and how these impact our 30% JV's.

LT/LS Lithium: assay results on our 31.5% JV being assessed to identify potential drill targets.

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

EMH Lithium: partner/offtake agreements.
]===

Thought I'd do a more considered calculation that demonstrates in July 2021 the plan was to mine our 30% at some point in years 1-12. Follow the link for better formatting and links! Corrections/comments always welcome.

https://www.reddit.com/r/CadenceMinerals/comments/si79az/comment/hv9c5tm/
===[
According to the latest publicly available plan from July 2021, figure 8 indicates that all of Yangibana North (30% KDNC) & West (0% KDNC) is mined in years 1-12, which, if you add the green bars up, comes to approximately 57kt of MREC.

It's unclear how consistent the contained TREO percentage is across mining areas, but assuming it is consistent, and that it is in fact the NdPr ratio that varies, then using what was stated on page 13:

• The Yangibana plant has a design capacity of 15,000t of MREC per annum.• The MREC, when further processed and separated, results in TREO of 8,500t per annum.

57kt of MREC contains 32.3kt of TREO.

Page 23 states:

This financial evaluation includes the production targets based on all deposits incorporated in the mine plan for a Proved and Probable Ore Reserve of 16.70Mt.

Table 2 states:

Deposit Mt %TREO %Nd2O3+Pr6O11 Nd2O3+Pr6O11 as % of TREO
Yangibana North 3.42 1.31 0.34 26
Therefore in terms of reserves the total TREO is: 3.42Mt * 1.31% = 44.8kt TREO.

However, page 12 notes:

The Life of Mine average metallurgical recovery for all deposits is

96.0% TREO recovery though ore sorting;

87.6% TREO recovery in the beneficiation circuit;

86.3% TREO recovery in the hydrometallurgy circuit; resulting in

an overall metallurgical recovery of 72.6%.

Therefore the 44.8kt of total TREO reserves in Yangibana North/West translates to 44.8kt * 72.6% = 32.5kt of recovered TREO contained in the MREC.

This 32.5kt demonstrates that the estimated 32.3kt deduced from the graph is likely correct, meaning the plan in July 2021 was for KDNC's 30% JV to be mined at some point in years 1-12.
]===

And of course, if it is years 12-15 then figure 8 is incorrect...

Thought I'd have another look at that. Assuming(!) I added up the columns correctly to 54kt of MREC, then I'm not sure how I got to 36.6kt of TREO. It's 54kt * 8,500 * 15,000 = 30.6kt TREO. 30.6kt is still less than the 23.973kt of reserves in the 100% side (West), but I'm now much more inclined to accept @Kiran's understanding that it's years 12-15!

Regardless, the NPV8 discount of years 12-15 is a bit more than a third of NPV0. And a third of something large is still something large! ;-)

@Kiran believes years 12-15, and he should know, but note this post of mine shortly after the latest presentation:

Ob@17 Jan 2022 09:35
===[
Indeed @Mer. I've watched/read that interview several times now, and I must say I remain VERY impressed by it. Not sure what the sellers here are on, but this remains a very strong buying opportunity IMHO. Under the sofa it is ;-)

The only thing I disagree with, and I've now had the time to take a closer look at is Kiran's instance that given the information we have been told that the mining of our share of Yangibana North is from years 12-15. If Figure 8 below is correct, and I believe it is, then that is actually impossible given what is stated earlier in the document. But maybe he has more information than we do? Or maybe I'm just wrong. lol.

For those wanting to do their own research. Add up the bars. Convert that 54kt MREC to 36.6kt of TREO. Compare with "Table 9 Yangibana North M09/160, 100% Hastings" of 36.2kt total. About the same, until you remember reserves are always less than resources, and in this instance the total resources to total reserves (proved + probable) from all of the Yangibana North/West region is 81,702kt:45.157kt. Reserves in their 100% being 23.973kt, which is significantly less than the 36.6kt, which means some of the ore MUST come from our areas in years 1-12 if figure 8 is correct.

https://www.investi.com.au/api/announcements/has/01aac881-001.pdf

Anyway, not looking to disrupt/upset any apple carts, just don't like the thought of HAS pulling the wool over @Kiran's eyes!

Ob.
]===

Indeed @Ivy. My opinion is that this share needs improved REACH to the masses, as I'm sure there are many out there that would be piling in at these prices if they knew we existed, and especially so if they had a good UNDERSTANDING of our proposition and could see that fellow shareholders had a strong BELIEF that the BoD was about to deliver on a project with staggering value for the company!

REACH: Maybe come off AIM with a fanfare? Maybe name change to something a little more obvious who we are, what we do? Cadence EV Metals? Cadence New Energy Metals? Heck, Cadence Lithium and friends would draw more attention than our fairly nondescript name. LoL. I like the ticker (KDNC), and see no reason why we can't keep that but get a better more descriptive name - I guess in practice it'll depend on what direction the BoD want to take us.

UNDERSTANDING: The Amapa PFS, accompanied by some decent freely available analyst reports should help in this regard, though I suspect it won't be until Ganfeng/HAS make it clearer what they are planning, or a deal is struck, that the market will recognise fair value in Sonora and Yangibana.

BELIEF: Finally taking 20% of a company that by my reckoning was once valued at $3.2B will go a long way towards this in the books of many current and potential shareholders, certainly mine!

Onwards and upwards - hopefully by the end of next week, or perhaps very early the week after...!

Ob.

https://www.reddit.com/r/CadenceMinerals/comments/rugni1/due_diligence_lsekdnc_cadence_minerals/

LoL @MBW although as recently evidenced by EMH, placing before/during good news and stifling any share price reaction to it is possible, I'm fairly confident we won't do that so I'm happy to continue to add on any weakness from those who perhaps think we may, especially since an updated PFS is hardly in the same category as FINALLY taking 20% of a project that was once valued at $3.2B! IMHO... :-)))

"Anglo sells Brazilian iron ore stake" (JANUARY 4 2013)
https://www.ft.com/content/395c4b48-5651-11e2-aa70-00144feab49a
===[
Anglo acquired the stake in Amapa for $1.9bn in a $6.7bn two-part deal whereby it took full control of the promising Minas Rio iron ore project.
]===

"Anglo American annual reports detailing the profitability and value of the Amapá iron ore mine during their ownership."
https://www.reddit.com/r/CadenceMinerals/comments/q56bac/comment/hlt8945/
===[
2008: Anglo acquired its 70% stake for $1.9B and Cliff's noted on page 150 of its 2009 annual report that at the end of 2008 the project had approximately $493m of debt. Meaning on a 100% basis the project was valued at: ($1.9B / 70%) + $493m = $3.2B
]===

But I could be wrong - this is AIM after all... ;-)

Ob.

Indeed @MBW. Even mentioning the possibility on AIM is spreading FUD. Even mentioning, mentioning the possibility is too! This too. lol

LoL @degsie. Personally I'm seeing it as a buying opportunity from the impatient, assuming we don't place before or during the 20% news, which I should say is now imminent... ;-)

Indeed @degsie - and the books appear much healthier than (I!) realised... :-)))

Not forgetting just how terrible the end to end efficiency of hydrogen cars are (~25-35%) compared to EVs (~70-90%):

https://cdn.motor1.com/images/custom/battery-electric-bev-or-hydrogen-fuel-cell-fcv-source-volkswagen.jpg
https://insideevs.com/news/406676/battery-electric-hydrogen-fuel-cell-efficiency-comparison/