Member Info for observer842

Indeed. That Dispatch Conclusions has been sat there for over a week now...

Thanks @Mer!

Indeed @jimb. I used to have a soft spot for tidal due to its predictability, but that was before Tony Seba hit it home that the transmission costs are key. So nearby generated and stored energy, trickle topped up/down (balanced) from further away is likely the future = batteries = lithium ;-)

Indeed @ivans. To my mind the BoD made their beds by what looked like accepting their bonuses in the form of options at 29p - one of the reason I've been happy to add all the way up to that share price, and especially at these prices! :-) FUD all around today ;-)

LoL @Cartunehead. That is exactly what might be happening now. You only need a few sellers on a lightly traded company to move the market. Let's hope the shares are moving into stickier hands. :-)

Lot of fear and greed out there today, mostly the former! Iron ore prices still over 50% higher than that used in the JRP... :-) Not one to miss out on a top up opportunity ;-)

Indeed @EV. In the light of increasing lithium prices an update related to: "Given the progress being made at the Finniss Project, we will be reviewing the targeting and fieldwork studies carried out in 2019 to determine if it is worth pursuing further exploration in our joint venture areas." wouldn't go amiss at this point. In my view we have a valuation as if we still have the millstone of the convertible loans round our neck. Yet we don't! :-)))

@Mer In you reply from @Kiran on Wednesday, I'm curious to know what word or phrase @Kiran actually used to describe how close we are to settlement with the banks? ;-)

Indeed @EV. Where I (mostly) moved from to invest in here between 20-30p is significantly more down than KDNC. So yes, I'm happy - overall! ;-) We know news is imminent here. Two court cases still have dispatch conclusions open, which is quite unusual to say the least... :-))) Perhaps later today/this week/month/year? LoL.

Indeed @EV. I've been tending towards thinking we will get the concentrate premium.

@EV: "As I understand it the 65% Pellet Feed product from Amapa can be used as direct feed to the blast furnace without sintering."

I'm happy to be corrected, but my understanding is that the 65% product that we intend to produce will be suitable to produce pellets. i.e. it is the "feed" (iron ore) which goes to produce the pellets which are then used in the blast furnaces. The pellets attract a premium to the 65% price. Currently $53 according to Custeel.

"MMX signs 20-year supply deal to GIIC pelletizer [UPDATE]" (September 20, 2006)
Here is some research to back up this view: https://www.metalbulletin.com/Article/1804128/MMX-signs-20-year-supply-deal-to-GIIC-pelletizer-[UPDATE].html
===[
Brazilian iron ore miner MMX has signed a 20-year contract to supply Bahrain's pelletizer Gulf Industrial Investment Company (GIIC), an MMX official confirmed

The pellet feed will be supplied from MMX’s Amapa deposit in the far north of Brazil, which is expected to start production in Q4 2007 with its nearby port facilities to open by Q1 2008.
]===

@EV. Interesting alternative approach to my extrapolation of the estimates in the fairly conservative WHI report! Another approach is to use the sensitivity graphs on page 21 of the updated PFS report from 2019: https://www.investi.com.au/api/announcements/emh/8d4b608b-40d.pdf which indicate that for every $1.2/kg the hydroxide price rises above the baseline of $12/kg the NPV8 post-tax $1.108B rises by $237m ($1.345B - $1.108B). The current hydroxide spot is $20.5/kg which is $8.5/kg above the baseline, meaning the post-tax NPV8 rises to:

$1.108B + (8.5 / 1.2) * $237m = $2.787B

EMH has 50% of that associated with it and we have around 10% of EMH, meaning $140m attributable to us or £100m. This is before the expansion plans, and doesn't take into account Tin credits increases which would then naturally approach your figures and my extrapolated WHI's de-risked figures of circa £10/sh for EMH, £1.20/sh KDNC , but should be taken with a large pinch of salt as it's unlikely the price will remain this high for life of project, although China is currently significantly higher and rising, so you really never know - on average it might not be far off in practice! Supply could be tight for years to come. :-)))

Ob.

It's a decent read too (pinch of salt with the FUD though!): https://ejatlas.org/conflict/proyecto-sonora-lithium-en-sonora-mexico but they really shouldn't allow themselves to be confused (as some media outlets were!) by resource, reserve, LCE, ROM, Lithium estimates. It's not that difficult to understand the difference! LoL. Or is it...? ;-)

Figure 4.3.4: Project Plan. Page 25 of the DFS: https://www.bacanoralithium.com/pdfs/Bacanora-FS-Technical-Report-25-01-2018.pdf

Interestingly according to "Table 22.1.4: Sensitivity Analysis – Post-Tax NPV8% ($ million)" on page 207: https://www.bacanoralithium.com/pdfs/Bacanora-FS-Technical-Report-25-01-2018.pdf for every $1.1/kg rise in the lithium carbonate price above $11/kg the post-tax NPV8 rises from $802m by $209m. $19.5 is an $8.5/kg rise meaning the post tax NPV8 would be:

$802m + ($209m * 8.5/1.1) = $2,417m which is almost exactly 3 times higher.

For information carbonate spot is currently $19.5/kg. Hydroxide $20.5/kg, though in China they've both converged to 165,000/t = $25.5/kg :-)))

https://www.fastmarkets.com/commodities/industrial-minerals/lithium-price-spotlight

Just thinking about the impact of higher lithium prices on the Sonora NPV. Page 207 of the DFS has the sensitivity tables, and indicates likely greater than 3x post tax if today's spot of $20.5/kg were used instead of $11/kg. In terms of my previous estimates of the VERY (IMHO!) likely value to KDNC (See: 15 Sep 2021 21:06):

===[
1. Percentage of the 603kt LCE associated with the JV is 11.95% (page 138 of the feasibility study), which is 3.6% to KDNC, 21.7kt LCE. (KDNC 3.6%, BCN 48.2%, Ganfeng 48.2%). KDNC value 21.7kt * $3,000/t * 50% = $32.5m

2. Assume 50% of the 287kt of additional LCE in 1 above is from the JV area.
KDNC 21.7kt + (287kt * 50% * 30%) = 64.8kt LCE (KDNC 7.3%, BCN 46.35%, Ganfeng 46.35%) KDNC value: 64.8kt * $3,000/t * 50% = $97.2m
]===

We could be looking at greater than 3x these for today's spot. That's $300m for the likely 20ktpa start and probable 50ktpa expansion (20ktpa confirmed in the offer document). Additionally, this conservatively assumes only 50% of the additional ore comes from our area - it could be higher than this, 100% even. Depends on the to be announced updated mining plans.

If lithium prices continue to rise I can see Ganfeng offering more than $100m for our JVs, perhaps much more. :-)))

Ob.

Anyone feel up to reproducing and updating for the latest spot on here my EMH Sat 10:02 post? With 15 recs there is obviously interest. @EV? Would be nice to know my calculator hasn't hiccuped! ;-)

https://www.lme.com/Metals/EV/Lithium-prices
===[
Lithium hydroxide weekly price
Fastmarkets MB lithium hydroxide monohydrate: min 56.5% LiOH2O battery grade, spot prices CIF China, Japan and Korea, $/KG.

Date Price (US$ per kilogram)
16 September 2021 20.50
09 September 2021 19.25
02 September 2021 17.75
26 August 2021 16.50
]===

LoL. How about if I put a dollar in front of it and a /kg at the end?