what are the chances of a capital raising?, page-85

Hi @dgb99.94,

Here's how I came to those numbers.

GXY planned to do a modular construction at GXY six years ago. Here's an extract from the 2014 annual report:



The following extract is from the updated SDV DFS dated 15 May 18:



I know I'm taking an incredibly basic approach here, but there's three stages planned, and stage 1 is approximately 1/3 of the planned 25ktpa total for the operation. The 2014 estimate for stage 1 was US$120m, which I feel is still pretty accurate given that the original estimate was for a 6-8ktpa battery grade carbonate operation, and GXY are now aiming for an 8-10ktpa technical grade carbonate operation.

We know GXY has identified some efficiencies and simplified the circuit, so let's take it down from US$443m to say USD$400m total (around 10% lower than the last updated DFS). Divide that by 3, and you've got USD$133m or thereabouts per stage. I know that this is a very simple way of looking at it, but I feel it's pretty accurate. I think GXY's comments regarding being able to fund it themselves also points to this price range. When we had USD$169m cash on hand, they said they could fund it themselves. Now we're down to USD$143m, and there's a funding gap. They obviously wouldn't have planned to use all of their COH for SDV stage 1, they would probably have been reserving USD$20-30m as contingency; therefore, my estimate is between USD$120-150m for stage 1.

Taking my total estimate of USD$400m for all stages, minus stage 1 costs comes to USD$250-280m to complete stages 2 & 3.

As far as JB goes, you may well be right. IMO, JB only holds potential to either sell or JV. Even with a JV though, it still requires a convertor there to be economically viable, meaning it needs ~$USD1b CAPEX. So even if we entered a 50/50 JV, GXY would still need to come up with around USD$500m just to get it going. Call me a pessimist, but I just don't think that's possible until well into the 2030's.

Regarding MIN's shipping, the are still shipping because they have a 50/50 JV with Gangfeng for Mt Marion. Big partner/customer = big shipping, simple as that. We've got a number of small convertors as offtakes and they're struggling. Gangfeng isn't.