Member Info for Strangerstill

I have just run a back of fag packet calculation for Tavsan using following parameters
Gold $1,500 per oz
Siver$18 per oz
Gold production 30,000 oz pa
Silver production 60,000 oz pa
C1 cash cost $650 per oz (Ariana’s figure $630 per oz)
Capital costs £25 million (Ariana’s figure $20 million)
Assumed loan repayment over 2 years and 8% interest

The figures come out at
Year 1 (2023) Net cash $4 million Profit $14 million
Year 2 (2024) Net cash $5 million Profit $15 million
Year 3 onwards Net cash $18.5 million Profit $16 million
Ariana gets 23.5%
On top of this in 2023 Apliki should come into production. As the plant only needs moving to the site there will be little capital expenditure so pretty well full cash flow and profit straight away. Ariana gets 25%. We will have to wait and see what the feasibility study shows to get estimates of the cash flow and profit.
Then there is the little matter of the payment for all the exploration work that Ariana is doing for the JV at Kiziltepe & Tavsan and the potential sell in at three times exploration costs of Kizilcukur.
Things from 2023 onwards look very exciting.

Tavsan and Apliki
By my calculations (see below) both Tavsan and Apliki should be in production by the end of 2023 giving the share price a good boost. Hopefully as the construction of Aklipi and Tavsan goes ahead there will be a steady rise in Ariana’s share price up tot 2023.

Tavsan
Ariana has received EIA approval for Tavsan and is now seeking the final approvals and the JV is discussing the loan funding of the plant with the banks in Turkey. Once these steps have been taken then it should be twelve months from the start of construction to production. Assuming that the final permitting and fund raising does not take more than twelve months Tavsan should be in production by late 2023.

Apliki
Venus Minerals and Hellenic Copper Mines (HCM) are establishing a joint venture to develop a new copper mine at Apliki outside Nicosia.
The two companies have completed a binding Heads of Terms agreement for a 50-50 Joint Venture to develop the fully permitted Apliki Copper Mine, which contains a significant copper resource.
Venus Minerals will operate the project, and a definitive agreement concerning Apliki is expected to be concluded by mid-November.
The Joint Venture will draw upon local mining, civil engineering and heap-leach expertise gained over many years of successful operation of the nearby Skouriotissa Mine by Hellenic Copper Mines.
All government permits and licenses have already been granted, and construction is expected to begin in February 2022.
Kerim Sener.
“The results have yielded several high-grade copper intercepts within an overall envelope comprising mineralisation which appears to be represented by dominantly oxidised material containing secondary sulphides.
“This bodes well for the proposed hydrometallurgical recovery of copper from the Apliki area utilising the same processing plant which was previously located at the nearby Skouriotissa operation.”

As the existing plan is being used the construction phase should not take long, eighteen months at most, so production should start in the second half of 2023.

I know that investors are unhappy about the selling off of 50% of Ariana’s holdings in the JV and view this in terms of the lost profit stream from the JV; however this is not the only source of income and profit for Ariana Resources. There is the prospecting work for the JV, the agreement states that ‘Ariana Resources will be responsible for exploration across the Joint Venture, which will be reimbursed at cost plus a bonus of two times the exploration cost for increases to project resources of over 10% or following the vend-in of new projects.’
This is not very clear is it;
will be reimbursed at cost for all the exploration work, plus a bonus of two times the exploration cost for increases to project resources of over 10%, or
will only be reimbursed at cost plus a bonus of two times the exploration cost if there are increases to project resources of over 10%?
However whichever the actual interpretation it is obvious that Ariana Resources should get a substantial payment for the exploration work at Kiziltepe and Tavsan based on the drilling results so far when the resource estimates for both are revised.
Ariana now gets paid for the prospecting work at Salinbas instead of having to fork out around $7 million and gets a free ride on the development of Salinbas, on top of this the JV deal has freed up a lot of resources for Ariana to pursue more strategic options such as Venus Minerals.
When Tavsan comes on stream Ariana’s profit stream from mining will double and when Salinbas is developed will double again.
I do not know why investors value Ariana at such a low price, what is there not to like?

Hi johnpwh

Have really enjoyed our chats on the forum. I hope that everything goes ok in the future for you. Maybe we will meet up on the forums of some other companies such as AAU, FXPO, WRES (holding on out of sentiment and not really worth selling now) and maybe LAC in the future.
Cheers

Tony

When for a test drive in an MG5 and loved it, looked at all the reviews. It is a well built car packed with extras with a seven year warranty and is about £6,000 less than the nearest comparable competitor.

I know that investors are unhappy about the selling off of 50% of Ariana’s holdings in the JV and view this in terms of the lost profit stream from the JV; however this is not the only source of income and profit for Ariana Resources. There is the prospecting work for the JV, the agreement states that ‘Ariana Resources will be responsible for exploration across the Joint Venture, which will be reimbursed at cost plus a bonus of two times the exploration cost for increases to project resources of over 10% or following the vend-in of new projects.’
This is not very clear is it;
will be reimbursed at cost for all the exploration work, plus a bonus of two times the exploration cost for increases to
project resources of over 10%, or
will only be reimbursed at cost plus a bonus of two times the exploration cost if there are increases to project resources of
over 10%?
However whichever the actual interpretation it is obvious that Ariana Resources should get a substantial payment for the exploration work at Kiziltepe and Tavsan based on the drilling results so far when the resource estimates for both are revised.

Ariana now gets paid for the prospecting work at Salinbas instead of having to fork out around $7 million and gets a free ride on the development of Salinbas, on top of this the JV deal has freed up a lot of resources for Ariana to pursue more strategic options such as Venus Minerals.

When Tavsan comes on stream Ariana’s profit stream from mining will double and when Salinbas is developed will double again.

I do not know why investors value Ariana at such a low price, what is there not to like?

Sold all my Bacanora shares. Invested most in LAC a few weeks ago cost me £56,055 now worth £71,580 and increase of 27.7%. The balance of the cash from the sale will buy me a new MG% EV. Whatever the future holds the problem is that Ganfeng have a negative hold over Sonora Lithium. The Board at Bacanora did the deal with Ganfeng with no safeguards for Bacanora shareholders. LAC has a deal with Ganfeng for the development at Cauchari-Olaroz but the deal has a lot of protections for LAC and minority interest shareholders.

In August switched £31,000 from BCN to LAC now worth £43,000, whatever the long-term outlook for BCN there are better bets out there at the moment in the lithium sphere.

I do, I just don't know which Christmas.

Back in May I sold 10,400 FXPO shares for £50,786 at an average price £4.88 as FXPO had become too large a % of my portfolio and now the price is £3.04 per share and dropping. The reduction in steel production in China will be temporary for the duration of the winter and the rest of the world is planning to invest in infrastructure so in the medium term the price of iron ore will rebound although maybe not to the highs that we saw earlier this year. Investor must also consider that FXPO tends to fix long term contracts (at least 6 months) and is not as affected by the sharp swings in iron ore prices. FXPO also produces high grade pellets which will be in demand as they are less polluting to refine, China’s cut in steel production is targeted at the mills that are the most polluting these are the ones that are being shut.
Now is a good time to invest in FXPO and I will be reinvesting some dividend income over the next few weeks back into FXPO.

Publication of the Offer Document

On 25 August 2021, the board of directors of Ganfeng International Trading (Shanghai) Limited ("Ganfeng") and the Bacanora Independent Directors announced the terms of a recommended cash offer (the "Offer") for the entire issued and to be issued ordinary share capital of Bacanora Lithium plc ("Bacanora") not already owned by Ganfeng, to be effected by means of a takeover offer within the meaning of Part 28 of the Companies Act 2006.

Ganfeng is pleased to announce that the offer document containing the full terms and conditions of the Offer and the procedures for acceptance (the "Offer Document"), together with the related Form of Acceptance, is being published today. The Offer Document, the Form of Acceptance and this Announcement will be made available on Ganfeng's website at www.ganfenglithium.com and by Bacanora on its website at www.bacanoralithium.com/investor-relations/ganfeng/.



Action to be taken by Bacanora Shareholders

Details of actions for Bacanora Shareholders to take are set out in the Offer Document. Any Bacanora Shareholder requiring assistance should telephone the Receiving Agent, Link Group, on 0371 664 0321 (from within the UK) or on +44 (0)371 664 0321 (from outside the UK) between 9.00 am - 5.30 pm (London time), Monday to Friday, excluding public holidays in England and Wales.

There is many a slip betwixt cup and lip just ask investors in WRES and WLFE. Just because a process works in the lab and the pilot plant does not mean that it will scale up without teething problems. It is a new process and there is always uncertainty about scaling a process up.

As for Thackers Pass the judge has rejected the applications of both the Native Americans and the environmentalists. The next hurdle is the claim that Trump's administration acted ultra vires when it approved the project in January. This case will be determined early in 2022. Even Biden acknowledges that the USA must be as self sufficient for raw materials and Thackers Pass is currently the largest lithium deposit in the USA. Even if this goes against LAC there is always the appeals process and ultimately the supreme court which has a majority of Republicans on it.

As for Thackers Pass being as dead in the water as Sonora I must agree. Sonora will be built by Ganfeng, just when will depends on how much control Ganfeng has over Bacanora. Both Sonora and Thackers pass will ultimately be built.

Just seen the ruling by the judge in favour of LAC

Hi BorderBob

I am aware of the possibility of the mine being blocked but at present it still has the go ahead for the archaeological survey. Time will tell but the USA needs the lithium.
July 24 (Reuters) - A U.S. federal judge has ruled that Lithium Americas Corp (LAC.TO) may conduct excavation work at its Thacker Pass lithium mine site in Nevada, denying a request from environmentalists who said the digging could harm sage grouse and other wildlife.
Gangfeng would not send the lithium to China as it has a contract to supply Tesla in the USA and could supply direct from Thackers Pass.
The point I am making is that Ganfeng could learn from the commissioning of Thackers Pass to ensure that Sonora's commissioning goes ahead as smoothly as possible.

The deal benefits Ganfeng and Ganfeng have strategic control over Bacanora. The information document re the offer states ‘Ganfeng already owns 50 per cent. of Sonora Lithium Ltd, the operational holding company for the Sonora Lithium Project, and 28.9 per cent. of Bacanora, which provides Ganfeng with significant influence over the strategic direction and progress of the Company, even in the event that the Offer does not complete.’

Ganfeng may be in no hurry to develop Sonora for the following reasons;
Ganfeng already has lithium due to come on stream from its joint venture with LAC at Cauchari-Olaroz which will produce 40,000 tonnes of lithium carbonate from next year with plans to boost production to 60,000 tonnes. Ganfeng also produces spodumene concentrate form its mines at Mount Marion and Pilbara in Australia, Ningdu in China and has an exclusive sales agreement with Altura in Australia. The spodumene concentrate is refined in China.
Ganfeng may well be able to get an offtake agreement with LAC for the lithium carbonate that will be produced from Thackers Pass which is owned by LAC and is fully funded for the stage 1 development (30,000 tonnes lithium carbonate). Construction of Thackers Pass is expected to start in 2022. If Ganfeng can get an offtake agreement for the lithium carbonate from Thackers Pass this will allow it to increase its access to lithium carbonate as well as learn about the extraction of lithium carbonate from soft rock (clay) from the process that LAC uses. Ganfeng can then develop Sonora and avoid any pitfalls and ensue that the process is as efficient and effective as possible from day one.

Hi johnpwh

I do not know what the default is , we will have to wait for the Formal Offer Document. I suspect the default will be not to accept the offer.
Best to keep an eye open for the Formal Offer Document and let everyone on here know as soon as one of us is aware that it has been published.

I have not seen the Formal Offer Document which is required in order to accept or reject the offer. Please let me know if anyone is aware that the formal offer document has been published. I do not believe that your broker can ask you to accept or reject the offer until the Formal Offer Document has been published and until individual shareholders have had the chance to read the formal offer document.

The information document states
'The formal Offer Document containing full information relating to the Offer, including its terms and conditions, together with the Form of Acceptance, will be dispatched to Bacanora Shareholders as soon as reasonably practicable, and in any event within 28 days of the date of this Announcement (or such later date as may be agreed with the Panel).
A circular setting out full details of the Reduction and the Zinnwald Distribution and convening the Bacanora General Meeting will be posted to Bacanora Shareholders as soon as reasonably practicable.
Important information
This Announcement is for information purposes only and is not intended to and does not constitute, or form part of, any offer or invitation to sell or purchase any securities, or the solicitation of any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the solicitation of any vote or approval in any jurisdiction, pursuant to the Offer, the Resolutions or otherwise nor shall there be any sale, issuance or transfer of securities of Bacanora in any jurisdiction in contravention of applicable law. The Offer will be effected solely through the Offer Document which will contain the full terms and conditions of the Offer. Any vote, decision in respect of, or other response to, the Offer should be made only on the basis of the information contained in the Offer Document. Each Bacanora Shareholder is urged to consult its independent professional adviser immediately regarding the tax consequences of the Offer applicable to them.'

If you owns shares directly (purchased through a broker) you should receive the offer documents direct. If you hold through a nominee account (SIPP or ISA) you may need to contact your provider direct to instruct them as to how you want to vote.

My suspicions are that this is a done deal. M&G obviously believe that this is the best that they are going to get. I suspect that other institutional shareholders are going to follow suit and accept the offer. Bacanora no longer have control over the strategic direction of Sonora Lithium as stated in the offer announcement.

Ganfeng already owns 50 per cent. of Sonora Lithium Ltd, the operational holding company for the Sonora Lithium Project, and 28.9 per cent. of Bacanora, which provides Ganfeng with significant influence over the strategic direction and progress of the Company, even in the event that the Offer does not complete.

I have been a long term holder in Bacanora and will just about break even. I feel gutted and believe that the Board have made some bad decisions and have not looked after shareholders' interests. I also believe that holding on waiting for something better is very risky and may end up with shareholders getting a worse deal. Ganfeng can hang on and watch the share price flatline. I believe that the best thing is accept the deal and invest the proceeds into shares that will give a better return.

Ok it should be Sonora. The Board 's function is to deliver shareholder value, I think that they have failed to do this because of some very bad decisions. Letting Ganfeng gain control of the development of Sonora Lithium is one, trying to raise the capital to build the mine whilst the price of lithium was plummeting was another.

Also the parties have agreed to terms by which Ganfeng will provide Lithium Americas the Project Debt Facility of up to US$125 million, with security over 70% of Lithium Americas’ interest in the Cauchari-Olaroz project, which will be used to fund a portion of the Cauchari-Olaroz construction costs.
The Project Debt Facility has a six-year term, and will carry an 8.0% interest rate for the first three years, 8.5% in year four, 9.0% in year five and 9.5% in year six. The terms are that during project construction and commissioning, there will be no repayments of principal, and Lithium Americas is entitled to refinance the loan without penalty at any time after the first year. Ganfeng’s 70% Offtake Entitlement is conditional on satisfying all funding installments under the Project Debt Facility.
Ganfeng needs the project to be built so that the loan can be repaid. The mine is nearly complete and once it is complete Ganfeng will have to pay full market rate to take control of the mine.
LAC has sufficient controls are in place to ensure that, whilst Ganfeng is an important partner, Ganfeng cannot take control of the Cauchari-Olaroz project without having to pay a full market price in contrast to Bacanora where Ganfeng got effective control of Sonara for a knock down price.