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guess what @jimb!?

@EV I too was wondering if weakening iron ore prices might encourage the deal to close. They are after all now round about where they were at the time WE agreed in principle to the settlement terms proposed by the BANKS. Albeit shipping rates are significantly higher! DCE closed for a few days. Wednesday IIRC.

Appendix 2: TAXATION. Pages 63-65 of the Offer.

Indeed @EV. Two outstanding makes it all that more interesting. ;-)

Great @degsie. Perhaps @Kiran can get confirmation that the colours are correct in figure 8? It's perfectly possible they are wrong, with the Yangibana North JV not being intended to be mined until much later than indicated, which would be consistent with what they have previously stated.

Good quote @EV! We need to ensure our BoD understand what is coming. We know we persuaded them to investigate Tony Seba several years ago as evidenced in several presentations - I just hope the Lithium dip over the past few years hasn't soured their view of the exponential demand in battery materials, especially Lithium, playing out before our eyes!

Straubel says. “Somebody’s got to do this. In fact, we need at least four companies doing similarly aggressive, crazy things all in the same timeline.”

Absolutely! Oh, and I'm seeing a 11.36% HAS rise, not 9% ;-)

It does feel possible that CEZ taking 50% of the project could be THE equity element of EMH's CapEx contribution, meaning EMH only need contribute debt to the project. No (further!) large dilution, which often holds back a share on anticipation of it, necessary, as the hit has already been taken. Just my opinion of course...

Indeed @EV. They may not be in the latest "official" mine plan (although they are in the provisional later years) which now appears dated as page 26 of the July 26th/27th announcement they mention indicates they are, and from year 1 :-)))

That's my understanding @KLUCK. But what's more interesting to me is the: "Bacanora is a lithium development company focused on building, in collaboration with its major shareholder and offtake partner, Ganfeng, a 20,000 tonne per annum open pit lithium carbonate operation at its flagship asset, the Sonora Lithium Project in Mexico." It's great to see the 20ktpa (finally!) in writing - though it probably benefits KDNC shareholders, of which I am one, through their 30% JV with BCN (35%) & Ganfeng (35%) than it does BCN shareholders. ;-)

It's quite revealing/interesting that the only mining rate I could see mentioned in the offer document is the 20ktpa I quoted earlier:

"Offer Document"
https://www.bacanoralithium.com/investor-relations/ganfeng/
===[
Bacanora is a lithium development company focused on building, in collaboration with its major shareholder and offtake partner, Ganfeng, a 20,000 tonne per annum open pit lithium carbonate operation at its flagship asset, the Sonora Lithium Project in Mexico.
]===

I'm wondering if this is a slip up... Cats and bags come to mind. ;-) Their shareholders are led to believe the offer is based on 17.5ktpa/35ktpa - expansion plans being purely aspirational, to date ;-) If 20ktpa is actually the case, this lends more weight to the 50ktpa expansion that has also been mooted by their CEO. This can only benefit our 30% JV - I estimated making it at least 3 times more valuable than it is for the 17.5ktpa/35ktpa plans :-)))

Ob.

Page 8 is probably the latest: https://www.bacanoralithium.com/pdfs/Bacanora-Company-Presentation-September-2021.pdf

It'll be interesting to see what lithium prices do between now and then, and whether anyone is able to "control" them...

Reposting for convenience :-)))

22 Mar 2021 21:05 KDNC.PL
=====[
Ob@07 Mar 2021 10:16
===[
I wonder if it is fair to approximate the net present value of the 21.7kt LCE associated with KDNC in the current mining plan by multiplying it by a cash flow per kt of LCE and discounting by some factor. If I recall correctly we (the BoD) have previously valued our portion of the project (according to the current mining schedule) at $30m, so how does $3,000/t and 50% discount sound?

21.7kt * $3,000/t * 50% = $32.5m

In which case my (apparently conservative! ;-)) scenario of, ~10% KDNC, 45% BCN, 45% Ganfeng, where total mined in the 19 years increases from 603kt to 890kt increases our NPV to:

890kt * 10% * $3,000/t * 50% = $133.5m

Another way of looking at this is that although the expansion plans are good for BCN shareholders they are potentially 4 ($133.5m / $32.5m) times as good for KDNC holders over the current plans :-))))

But is it a fair way of looking at things? And if so what about even higher mining rates and life of mine?
]===

Ob@07 Mar 2021 17:30
===[
Here are the workings for the more ambitious schedules - still only for 19 years, which is obviously conservative given the size of the resource, but makes comparison and discounting easier.

1. 603kt LCE (17.5ktpa 4 years, 35ktpa 15 years)
2. 890kt LCE (20ktpa 2 years, 50ktpa 17 years)
3. 1,590kt LCE (20ktpa 2 years, 50ktpa 3 years, 100 ktpa 14 years)
4. 2,390kt LCE (20ktpa 2 years, 50ktpa 3 years, 100 ktpa 6 years, 200ktpa 8 years)

One simple method for estimating an NPV value is to pick a realised cash flow per kt of LCE and discount it for the mining plan schedule. I used $3,000/t (consider it after all costs and taxes if it seems too low!) and 50% previously, but other values are available. ;-)

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

3. Assume 70% of the 700kt of additional LCE in 2 above is from the JV area.
KDNC 64.8kt + (700kt * 70% * 30%) = 211.8kt LCE (KDNC 13.3%, BCN 43.35%, Ganfeng 43.35%) KDNC value: 211.8kt * $3,000/t * 50% = $317.7m

4. Assume 90% of the 800kt of additional LCE in 3 above is from the JV area.
KDNC 211.8kt + (800kt * 90% * 30%) = 427.8kt LCE (KDNC 17.9%, BCN 41.05%, Ganfeng 41.05%) KDNC value: 427.8kt * $3,000/t * 50% = $641.7m
]===

Short term I believe our value will move from 1 to 2 as the plans are written down, but potentially as high as 3 medium term, or even 4 longer term.

Ob.
]=====

Before seeing it written in the Ganfeng offer document all we had was words:

"Bacanora Lithium | China Mining Club | EN" (21 Oct 2020)
https://youtu.be/FNjRt-HKa2s?t=928
===[
We can scale it up, we've looked at production profiles from 17,500 to 35,000 to 50,000 tonnes a year of lithium [carbonate] equivalent, and each construction phase is about 18 months. So we could go from, starting work to being a 50,000 tonne a year lithium producer within 4 years. And that is the plan. I mean obviously we're looking at the markets and how quickly they're growing, but, yes, Ganfeng has invested in us because they see us being one of the largest producers in the world within the next 5 years supplying a high grade product that will go straight to the Asian market.
]===

"China Mining Club - Bacanora Lithium" (19 Feb 2021)
https://www.youtube.com/watch?v=QnuOIfuEmOQ&t=930
===[
So we are going to start at a 20ktpa equivalent basis but we could easily expand to 50, or larger thousand tonnes a year.
]===

LoL @jimb. I take that as their rounding of the official production (at the time) of 17.5ktpa to 18ktpa, not how much they are expecting to receive.

It's in writing. It's official! :-))) "Bacanora is a lithium development company focused on building, in collaboration with its major
shareholder and offtake partner, Ganfeng, a 20,000 tonne per annum open pit lithium carbonate operation at its flagship asset, the Sonora Lithium Project in Mexico."

Get reading... https://www.bacanoralithium.com/investor-relations/ganfeng/

Latest presentation released this week: https://www.bacanoralithium.com/pdfs/Bacanora-Company-Presentation-September-2021.pdf

Inviting a counter?

And whilst we are talking about corrections: the project was valued at $660m in 2012, not $600m. And $1.2B in 2011. ;-) Additionally the exchange rate has moved significantly in our favour since those times. :-)))