Member Info for Sjb777

Zarro, extract from last set of accounts

Additional information for number one.

The facility may be drawn in three tranches of US$25 million, US$50 million and US$75 million, subject to certain Conditions Precedent, including, but not limited to: various matters in respect of the execution, registration and perfection of certain security and the granting of listing consent by The International Stock Exchange, a minimum equity raise of US$200 million, energy and engineering contracts executed. All drawdowns under the RK Mine Finance debt facility will be pro-rata across the two Eurobond instruments. In July 2018, the Company drew down the first US$25 million of the RK debt facility.

On number 3, having looked at accounts yes you are again correct equity raise but price has not been stated.

Zarro, thanks for the feedback.

1. Hope you are right on this point especially as they have just signed the legal documentation but referring to the last set of published accounts they state $25 was drawn down from the RF mining facility.

2. Thinking about it you are right on this point, which does not help.

3. I hope you are wrong and they are loans.

Do you know what the last terms of the Hanwa or Oman deals were?

I can but hope that Bcn do not do an equity raise at this price or the dilution will be too great

PS states " that GFL will follow their money in the next equity raise and fund 22.5%" . About a minute in on the proactive video.

Zarro, it seems clear to me from the PS proactive video that equity raising will be required. As per my analysis posted here on the 18th August.

Finance position. Sonara using tier one providers from Europe and America is $420m.

The company have secured the following:-

1. RK mining $150m but have drawn in July 18 $25m.
2. Hanwa $25m
3. Ganfeng 22.25% is $94.5m
4. Ganfeng share 29.99% and sonara 22.25 % purchase is $24
5. Assuming still can get SGRF investment $65m.

So have 125-94.5-25-24-65=$333.5m.

Hence shortfall of approx $86.5

In terms of reducing this would suggest the following:-

1. Suppliers from China rather than Europe and America will in my opinion yield a 10-20% saving. Hence reduce shortfall by between 42-9.4= $32.6 and $65.2
2. Float Germany lithium mine
3. Ganfeng take up 50% of mine and then no shortfall.
4. A rights issue when the price is more favourable.

But consider one alone and shortfall between $53.9 and $21.3m

If the SGRF investment is not renegotiated and no proceeds from German mine then between $86.3 and $118.9m.

So between £70m and £100M in my opinion worse case scenario. So let's say it is a 100% dilution taking the market cap to circa £200M ( assumes they raise money when price more favourable).

How do the project numbers look at 17500tonnes. Price 10k and cost 4K =$ 6k profit, 13k tonnes attributable to Bcn. Ebitda is $78 (£60m approx). If after tax profit is £30-40m and trade at PE of 10, then could secure a 50 to 100% increase over a 2 year period but this is depend upon the lithium price and demand.

Please critic the above, as based on a number of assumptions.

Finance position. Sonara using tier one providers from Europe and America is $420m.

The company have secured the following:-

1. RK mining $150m but have drawn in July 18 $25m.
2. Hanwa $25m
3. Ganfeng 22.25% is $94.5m
4. Ganfeng share 29.99% and sonara 22.25 % purchase is approx $20.
5. Assuming still can get SGRF investment $65m.

So have 125-94.5-25-20-65=$329.5m.

Hence shortfall of approx $90m.

In terms of reducing this would suggest the following:-

1. Suppliers from China rather than Europe and America will in my opinion yield a 10-20% saving. Hence reduce shortfall by between 42-9.4= $32.6 and $65.2
2. Float Germany lithium mine
3. Ganfeng take up 50% of mine and then no shortfall.
4. A rights issue when the price is more favourable.

But consider one alone and shortfall between $57.4 and $24.8.

A fair amount of assumptions in the above so feel free to critic

https://www.investing.com/equities/ganfeng-lithium-a-balance-sheet.

There balance sheet at the 31/3/19 has 400 million pounds of cash approximately. Conversion from CNY to pounds approx 8 to 1.

Viveka, thanks for you post. This would imply that the probability of get all three approvals is high, it is just a case of being patient.

There is a risk and reward scenario with any share. If consider the investment case:-
1. They have a mine with a low cost of production, approx 4000 dollars.
2. A long life mine
3. A major player to potentially partner with.
4. Analyst have a price of at least one pound.

If consider why not to invest:-

1. Still two approvals to go
2. There is still a finance short fall, do not know how much until Ganfeng do their assessment ( September I believe).

If any body else has a view on investment analysis would be interested to hear

Chinese enterprises need approval from The following to invest in foreign companies.
1) the National Development and Reform Commission (NDRC)
2) the Ministry of Commerce (MOFCOM)
(3) the State Administration of Foreign Exchange (SAFE)

We currently have number 2, I have no idea how long it would take for the other two approvals.

But would add in my view the selling is due to profit taking, KDNC selling, and concern about the share price falling. If there were any news good or bad would not company not have to inform us via an RNS.