Ann: Equity Capital Raising Presentation, page-30

I'm standing on the shoulders of others here on HC, but I'll give this a crack and welcome corrections.

Dividends are driven by free cashflow (FCF $), the proportion the BoD agrees to return to shareholders (Return %) and the number of shares on issue (SoI).

So, dividend per share (DPS) per year as calculated from the DFS based on SC6 sales (pre the Hydroxide plant)…

DPS = (FCF per year X 70% return) / SoI

DPS = ($530,434,783 x 70%) / 1,911,178,382

DPS = $0.19

Note I’ve assumed 70% return to shareholders but the company will need a billion for a Lithium Hydroxide mine, so that 70% may be optimistic.

Today’s announcement doesn’t change the FCF or estimate of Return % but increases the SoI and if my sums are right, dividends now look like this…

DPS = ($530,434,783 x 70%) / 2,208,120,806

DPS = $0.17

Strictly by the numbers it looks like this capital raise loses existing holders 2c a share/per year. I would love to see some offtakes that meet and beat the SC6 prices assumed in the DFS thus increasing the FCF and reducing the dilution impact.

So if you’re thinking about the share purchase plan, at a purchase price of $1.65 with a 17c annual dividend (maybe) that is a 10% return with tax already paid - hello franking credits!!!