Member Info for observer842

@Tradecraft, it occurred to me it might be possible to estimate the 58%, 62% & 65% quantities in the stockpiles if we assume the first 2 years in your spreadsheet are from the 1.39Mt stockpiles and the 62% is sold for $61/t and the 65% for $80/t as in later years.

Dollar revenues from your spreadsheet:
58% = 8,710 * 2 = $17,420k
62% = 23,516 * 2 = $47,032k
65% = 15,231 * 2 = $30,462k

62% quantity = $47,032k / $61/t = 771.016kt
65% quantity = $30,462k / $80/t = 380.775kt

Therefore 58% quantity is 1,390kt - 771.016kt - 380.775kt = 238.209kt

Which means that by this estimation the price per tonne of the 58% Sinter used in the JRP is:

$17,420,000 / 238,209t = $73.13/t

call it $73/t, not that it matters much, but you did ask ;-)

What's probably more important is now that we know the split between the different types it's possible to get an improved estimate of the value of the stockpiles using today's spot:

http://www.custeel.com/en/csi.jsp
===[
Date Seaborne index 62% Fe fines Seaborne index 65% Fe concentrates premium Seaborne index 65% Fe fines
2021-04-02 166.50 7.80 196.50
]===

We don't know the sale prices for each type, but I'm happy to use the following in my estimation:

62% Spiral = $166.5/t
65% Pellet Feed = $196.5/t + $7.80 = $204.3/t
58% Sinter (Estimate halfway between the two) = $185/t

Going with these broad estimates the revenues from each type in the stockpiles would be:

58%: $185/t * 238.209kt = $44,068k
62%: 166.5/t * 771.016kt = $128,374k
65%: $204.3/t * 380.775kt = $77,792kt

Totalling $250,234k call it $250m. Compared with $82m using the, what has now transpired to be conservative, prices in the JRP. :-)))

Just my own estimates. Please let me know if there are any logic or calculator errors! ;-)

Ob.

LoL @tomcat, I suppose we (!) should clarify that we (I!) believe that the $27.5m is the equity element and the $85m is the debt element of the Amapa project funding. 1:3 is fairly conservative and more achievable than a more ambitious 1:4. My understanding is that the use of the word "Cadence" in this instance was shorthand for the JV partners, and not specifically us, though as discussed it is possible that if we want (and are given the opportunity) to go to 49% of the project we may have to provide an additional $24m in addition to the $3.5m to take us from 20% (which we don't yet own) to 27%. But we don't know for sure. And we also don't know for sure who is responsible for organising the debt element. I presume the JV partners, but perhaps not, perhaps we will be organising that? Once we get to 20% there will be many wanting to know the details of the contracts which will hopefully contain answers to these questions!

Ob.

Initially we were expecting $60m from ore sales not the stated $30-$40m (which surely is a gross underestimate now!), so the total would have been $85m + $30m + $60m = $175m which would have covered the estimated $168.3m http://irservices.netbuilder.com/ir/cadence/newsArticle.php?ST=REM&id=2887382 after the $2.5m and other aspects not included in the $168.3m is deducted.

That's the best understanding I've heard to date @EV_Bull. I'm with you on that! :-) In terms of the corporate presentation mentioning $140-$150m is that not simply the $85m debt + $30m equity + $30-40m in ore sales - which hopefully will be much larger in practice!

If anyone is interested the first part of my post I was quoting said this:

"Amapá iron mine to resume operations in 2021" (3 Sep 2019)
https://www.pressreader.com/brazil/valor-economico/20190903/281827170443994
===[
“Cadence will enter as an investing partner and there is a schedule for payment of installments that will be applied to the operation. In all, it will be $ 115 million to reactivate the operation. IS It is important to emphasize that the debt will be paid with the income from the operation ”, armed Sodré. The lawyer added that he will have two more installments that Cadence will pay for the project, one of R $ 27.5 million and another of US $ 85 million, resources that will be fully reversed to put the operation up.
]===

Which of course makes perfect sense now we have seen the JRP document. :-))) The $85m is the DIP C debt element. The balance of the $115m total and the debt is the $30m DIP A + DIP B equity element, which is $2.5m + $3.5m + $24m. The $24m is mentioned in the corporate presentations and some believe this is what will take us from 27% to 49% of the project. And the "R $ 27.5 million" was simply a typo. It's the $30m - $2.5m in USD not BRL...

Well that's my enlightened explanation which I remember scratching my head quite hard over at the time! :-))))

Of course it could be nonsense. DYOR! IMHO! ;-)

Ob.

LoL. If we owned 20% today I'd be all in if I could buy @25p with iron ore prices as they are! But I didn't come on here to post that, I came as it occurred to me that many may not realise that shortly after the JRP was ratified in August 2019 one of the parties was quoted as saying there is opportunity to double production to 11Mtpa. It took me a bit of digging through my old posts (and oh my I have a learnt a LOT since then!), and here is part of what I posted on 13 Sep 2019 10:41:

"Amapá iron mine to resume operations in 2021" (3 Sep 2019)
https://www.pressreader.com/brazil/valor-economico/20190903/281827170443994
===[
The mine has a reserve of 251 million tons of iron ore and in the first year of operation is expected to produce 5.3 million tonnes. In a second moment, according to with Sodré, could be expanded to 11 million tonnes.
]===

My understanding is that "Sodré" is "Eduardo de Abreu Sodré, a partner at law firm Donelli, Abreu Sodré e Martins Advogados, which helped draft Zamin's recovery plan"

I wonder if expansion possibilities will be included in the scoping study, and whether we are actively developing plans?

Ob.

One for the photo album:
https://pbs.twimg.com/media/Ex4NxuAW8AMgUaf?format=jpg&name=medium

This was discussed very late on 29 Mar 2021.

I just spotted that 25p was (practically!) paid yesterday on Aquis :-)

https://www.aquis.eu/aquis-stock-exchange/member?securityidaqse=KDNC
===[
Date & Time Volume Price
01/04/21 | 16:25:50 20037 24.9975
]===

25p to 30p is the price range I thought (hoped!) we might be in after shipping commenced (or higher, as this is AIM!) which then forms a good springboard for when we take 20% of the project. Let's keep that good news flowing @Kiran :-)

Iron ore prices looking great:

http://www.custeel.com/en/csi.jsp
===[
Date Seaborne index 62% Fe fines Seaborne index 65% Fe concentrates premium Seaborne index 65% Fe fines Seaborne index 65% Fe pellets premium
2021-04-01 166.50 7.80 196.50 64.30
2021-03-31 164.50 7.50 194.20 59.80
2021-03-30 165.50 7.50 195.50 59.80
2021-03-29 167.50 7.50 196.50 59.80
2021-03-26 161.40 7.50 190.50 59.80
2021-03-25 160.00 7.50 188.50 59.80
2021-03-24 160.70 7.50 188.80 53.50
]===

Premiums increasing :-)))

Ob.

Indeed @Legalease, I was VERY pleased to see that, as I'm sure @Bannor was, though we knew it was coming of course... :-)))

@EV_Bull avert your eyes! LoL

1 this month, 2 in May. That will make a total of 4. Plus 1 in June. All preliminary!

@observer842:
===[
That's what I believe @Nick, but I'm also confident that some holders think they can (part) sell and buy back below 20p. And maybe they can, one last time. But maybe they can't. They've been able to every time to date. What makes this time so different? ;-)
]===

Looking increasingly unlikely as word spreads and news flows...

@FreeBuffett - DEV only, U are interspersed, also on pier 1.

IMHO it's no coincidence another ship was slotted into the schedule today, the same day the inaugural ship set sail: Not only have DEV, Sino and KDNC proved to themselves they are capable, they have also proved it to the small creditors, the court, the port, and hopefully to the banks! ;-)

@tomcat - it's like I said, my view is that it's $10m net they can ship and DEV are reasonably confident the deal is going to close so they are booking slots while they are available. Cancelling is easier. It's "only" 5 I see as that's as far out as it goes... If this view is correct we'll see more booked in the coming weeks, though hopefully it'll be fairly moot soon when we take our 20%... :-))))

That's what I believe @Nick, but I'm also confident that some holders think they can (part) sell and buy back below 20p. And maybe they can, one last time. But maybe they can't. They've been able to every time to date. What makes this time so different? ;-)

Schedule updated: R (C) 29,31,05, TP (C) 02,05,09, NLLH (U) 07,09.14
DEV currently has 4 scheduled: 1 in April, 2 in May, 1 in June - in addition to the 1 leaving today :-)))

These are preliminary and will almost certainly change.

4 slots. Good point, but I'd seen that as indicating high confidence by DEV that completion was imminent. Easy to cancel a slot with a few weeks notice, not so easy to book one!

https://blog.powerscore.com/lsat/bid-153449-lsat-quantity-terminology-some-few-several-and-many
===[
By definition, several means three or more
]===

LoL. But of course you know that. I'd be very surprised if 4 ships are required to net $10m unless there's a LOT of start up costs that need factoring in, so several covers 3, which is what I'm expecting, or 2 and a bit if we use some of U's holds.