Bacanora Lithium Share Discussion Threads

[tidy 2] 01/7/2019 11:08

Its due now it was mentioned in the May interview I'll have to check but think it was the PFS.

[marvelman] 01/7/2019 11:08

Bacanora board must have have been in a very bad place to have accepted these terms. Anyway, as a PI these days we can only pick up the crumbs and leave the Chinese to have the main loaf for their toast and butter. Time to move on for me as I cannot see much more upside from here. Regards to all

[emhaigh1] 01/7/2019 11:03

What's the next news expected re Zinnwald? Thanks.

[steeplejack] 01/7/2019 10:50

The 20th May RNS is more explanatory.To determine the 25p buy in price they used 20 day share price averages.They paid just over £7.5m for a 22.5% stake in Sonara but the price paid was referenced to the valuation being applied to Bacanora as a whole and the 25p paid for the 29.99% interest.This makes sense,BCN has other interests not just Sonara.The price that Ganfeng might pay for a further 27.5% of Sonara will probably be determined by the same formula.If you used,purely to provide an example,that same formula in say a months time and the BCN price averaged around 55p for twenty days,then a 27.5% slug of equity might cost Ganfeng around £18m ie the average price at 55p would be 2.2x the 25p average used before plus they’d be buying 5% more than previously.So there’s an incentive for all and sundry to push the BCN price as high as possible so the Chinese have to pay up!


"GFL has an option to increase its interest in SLL to up to 50% within 24 months at a valuation based on the share price of Bacanora at the time of subsequent investment"#

I’m not sure what that means,Marvelman.Hopefully it does mean capital investment someway down the line.




As part of the Strategic Investment, GFL would subscribe for a 29.99% equity interest in Bacanora for a cash consideration of GBP14,400,091, being 57,600,364 new ordinary shares in the Company (the "Private Placement"), at a price of 25 pence per share, representing the volume weighted average price ("VWAP") on AIM of the Company's shares over the previous 20 trading days at the time of negotiation. Subject to the completion of the Private Placement, GFL would have the right to nominate one director to the main board of Bacanora. GFL would also be granted pre-emption rights in relation to new share issues proportionate to its interest in Bacanora.

In addition, as part of the Strategic Investment GFL would be granted the right to acquire an initial 22.5% interest in a subsidiary of Bacanora which holds the Sonora Project ("Project Level Company"), for a cash payment of GBP7,563,649, equivalent to a price of 25 pence per share on the same basis as the Private Placement (the "Project Level Investment"). Subject to the completion of the Project Level Investment, GFL would have the right to nominate one director to the board of the Project Level Company. GFL would also be granted an option to increase its interest in the Project Level Company to up to 50% from 22.5%, within 24 months of the completion of the Project Level Investment. The valuation of any additional investment in the Project Level Company by GFL would be based on the share price of Bacanora at the time of the additional purchase. paragraph,you’ll see they paid around £7.5m for 22.5% of Sonara.

[tidy 2] 01/7/2019 10:40

I like the 100k delayed buys filtering through. So the mms have orders.

[tidy 2] 01/7/2019 10:39

Ticked you up there. Good post.

[tidy 2] 01/7/2019 10:36

Thats at the project level at Sonora not in BCN.

[steeplejack] 01/7/2019 10:31

That's true but perhaps a takeover wasn't going to be entertained by BCN at this price.They'd have fought it all the way.They recognise that the market valuation is fatuous.Would Horizonte say entertain a bid at a 50% premium to its recent low?....highly unlikely but it might have to entertain an offtaker with the cash to assist project finance to take an opportunistic slug of equity for starters.A lot of junior miners are highly vulnerable to being hoovered up at a fraction of their long term worth because paralysis in banking finance and ineffectual equity markets mean the best laid plans are coming to nought.

[marvelman] 01/7/2019 10:27

Steeplejack...good to see a respected investor giving your input. I must admit to being uncertain as to the terminology used in what could be seen to be a rather ambiquous RNS. What is your interpretation of "subsequent" in :-

"GFL has an option to increase its interest in SLL to up to 50% within 24 months at a valuation based on the share price of Bacanora at the time of subsequent investment"#


....does that mean the capital investment of circa £450 million?

Grateful for your thoughts

[tidy 2] 01/7/2019 10:27

Imo its a solid deal. o GFL shall appoint one Director to the Board of SLL -- Additional long-term offtake at a market-based price per tonne o 50% of Stage 1 lithium productiono Up to 75% of Stage 2 lithium production-- GFL will complete a review within six months of the EPC engineering design and capital costs of Sonora Lithium Project with a view to reducing costs and accelerating the timetable-- GFL will provide a plant and process commissioning team to assist Bacanora in delivering first production in 2021Plus Hanwa have an off take deal in place and will commit to a further 25m investment in BCN. So production capacity is accounted for for stage 1 and stage 2 already.

[tidy 2] 01/7/2019 10:22

I suppose it boils down to beggars cant be choosers if you like but think of it another way. Ganfeng are supporting BCN where they could have easily taken them out.

[tidy 2] 01/7/2019 10:10

So they will have 30% of BCN and 50/50 of Sonora with BCN. Plus 150m to capex and free expertise and efficiency enhancements.

[steeplejack] 01/7/2019 10:08

Clearly....ordinarily the price which Ganfeng will pay for a further interest in Sonara will be determined by the average share price prevailing in the 15 days PRIOR to the deal being struck.

[tidy 2] 01/7/2019 10:07

Nice steady rerate.

[tidy 2] 01/7/2019 10:05

As bluegrass states on LSE. Garfeng will own 30% of BCN. They are not going to be satisfied with the terms of a finance deal put together by a junior explorer. Also they will not want their equity diluted by further dilution. The deal with Garfeng changes everything for BCN including mine development costs, timescale, expansion and finance.

[tidy 2] 01/7/2019 10:03

GFL has an option to increase its interest in SLL to up to 50% within 24 months at a valuation based on the share price of Bacanora at the time of subsequent investmentSubsequent means at the time of increasing not at the price of the original.

[tidy 2] 01/7/2019 10:01

I don't think it says prior to making the deal. More like based on the share price on BCN

[cudmore] 01/7/2019 09:56

Astonished this hasn’t taken off and at the amount of sellers. Think the mm’s are playing a blinder getting stock from weak holders. Broker rerated this to £1.14p. Holding my stock for the gains coming.

[steeplejack] 01/7/2019 09:54

"GFL would also be granted pre-emption rights in relation to new share issues proportionate to its interest in Bacanora."More than likely they'll be an equity issue at some juncture as this extract from the RNS in the 20th May implies.By the by,the fact that Ganfeng will commit to providing project finance for Sonara of x million can't be translated into an implied BCN share price.The market capitalisation of the company and the capital outlay involved in bringing Sonara to production are two totally different things.Ganfeng have triumphed buying in to 29.9% of Bacanora at 25p.Read the statements and they have an option to further increase their stake in the Sonara project to 50% at a price determined by the Bacanora share price in the period prior to making a deal.Buying an equity interest in Sonara is one thing,the capital outlay another.

[danielinnes74] 01/7/2019 09:15

should be an interesting few days at least... Another 30p to go until my original investment in this breaks even...

[tidy 2] 01/7/2019 09:11

For perspective, the size and quality of Sonoro is enough to provide high grade 99.5% lithium for 250 +yrs at the stage 2 level production. Hence Ganfeng are fully committed for success and now funding is sorted Hanwa will commit to a further $25m BCN investment.

[tidy 2] 01/7/2019 08:55

Ganfeng are buying at 25p but they are also buying 30% of a 460mil investment so another 150mil on top. If you convert that to a share price they are paying about £1.50 per share.Ive doubled up on the gap fill. Paying premiums now. Had to NT myself.

[cudmore] 01/7/2019 08:54

52p paid but 51p on the offer. Mmmmmmm

[dplewis1] 01/7/2019 08:38

It's probably Cadence selling their remaining few shares ;)