AUZ announcement, page-563

Auz will have to raise new shares. You can't grant an option for 19.9% of  a company's stock and hold existing shareholders to have to sell. With an option, SK needs certainty and the only way to get certainty is through an undertaking from the company to issue new shares, not sell existing ones...

Secondly, the effective price per share is not 12 cents. You have to understand the maths; that SK will own 19.9% of the company after the dilution.  To work out the number of shares issued, the maths goes:

(Current shares on issue / (1 -less SK shareholding)) - Current shares on issue.
((2,676m / 0.801) - 2,676m.
665m shares.

At ~$65m, the cost per share is 9.8 cents per share.

In transactions like this though, the option holder should be buying in on an 'as is' basis, i.e. not having to pay up for the value they generate by agreeing to the off-take. Therefore the 9.8 cps issue price bears no indication of the inherent value of the company. That is more your traditional discount cash flow value (but with a few adjustments to reflect the much higher cash flow certainty this deal has brought, and a higher share register to reflect all SK's options being exercised). The former will out-weigh the latter significantly.

The last part of the equation is the cash. ~$65m. Well, that comes into the company's coffers and in my mind will provide (part / most of) the cash equity lenders will require to develop the plant.