Share buyback or Special Dividend, page-36

In the last sentence the directors say "The financial flexibility afforded by the transaction may also enable the company to consider future capital management initiatives". In other words, a share buyback.

I agree that potential cost overruns need to be considered although the first $50m is covered. Tax liabilities also need to be considered and managed. It is a balancing act to get the right mix. A $50m dividend might give each investor 5.7 cents per share (taxable) however the share price might also fall back a little. A $50m buyback over time at an average $0.65 buying back 77m shares to clear short term overhang might add say $0.20 to share price as well as enhancing future share price growth.

Whatever they do, I trust management will do the right thing. They plan on being in production in less than two years generating significant cashflow that they don't need, other than for dividends. Bank finance can be cheaper than cash, assuming the cash is applied as a buyback to earn say 50% versus lower interest cost. If a little cash is required at the end why not borrow as interest could be a cheaper option and could be paid back quickly.

I am sure management are considering all options and come up with the best strategy for shareholders as they personally also have a lot of skin in the game. Being cashed up is an enviable position to be in and certainly opens the door to a lot of very good options and I think these guys are smart enough to capitalise on it.