Ann: Paradox Lithium Project DFS Confirms Outstanding Economics, page-257

I know there has been a bit of talk about “being wary of a cap raise” given the project metrics announced this morning.

Have a good read of Section 9– Project Funding in the DFS.

“As disclosed in Section 8, project specific funding ofUS$495m (excluding working capital, finance costs, sustaining capital andcorporate costs associated with project development) is estimated to achievethe first stage of production.

Anson plans to fund the Paradox Lithium Project capitalrequirements through a mix of conventional equity and project finance. However,additional funding options such as offtake funding or strategic investments maybe considered at the time of final investment decision and based on conditionsof the equity capital markets and debt capital markets at the time.

Anson has engaged leading independent corporate advisoryfirm BurnVoir Corporate Finance to undertake a competitive debt funding processwith reputable finance lenders. Debt process planning has been ongoing sincethe start of the DFS. Modelling of the Paradox Lithium Project Stage 1demonstrates a debt carrying capacity that is supportive of project financing.A number of factors make the Project attractive for project financing,including:

• Tier 1 jurisdiction of theProject

• Strong ESG credentials andcontribution to EV transition

• High project margins andstrong lithium price outlook.

The project financing process will be formally launchedfollowing completion of the DFS.

In advance of the DFS, a select group of leadinginternational banks, export credit agencies and credit funds have been engagedand provided a strong indication of interest in providing project financing.Additionally, the Anson has had preliminary engagement with the US Departmentof Energy (DOE) in relation to funding availability to support the US domesticEV industry. Discussion with DOE is ongoing.

It is anticipatedthat debt funding agreements will be finalised in advance of Final InvestmentDecision.

At the date ofthis announcement, the Company has a market capitalisation of around A$300 million,no debt, and an established track record of attracting new capital.

Based on the above, the Company has formed the view thatthere are reasonable grounds to assume the likelihood of successfully raisingfinance to sufficiently cover the estimated capital and working capital costsfor the Project, as and when required.”

So from the above we can see:

1. Capex = $US495M

2. Funding not required until FID – When is FID? – Q2 2023!

3. Funding options such as conventional equity (Cap raise), Project finance, Debt capacity, US Dept of Energy funding (preliminary discussions)

4. Cash at hand (End of last quarter = $A5.7M with a A$15M Drawdown facility available. (From the last 1/4ly)

I feel that at worst 1/3 of total project funding to come from equity so say around US$150M raised at hopefully between 50c-$1.00 – minimal dilution if the remaining finance comes from one of the several options above. We have another 3-5months before it is required.

So for me I can’t see them needing to raise cash for a little while and if they do Im sure it will be enough to keep them going rather than the full $500M. Given the sp being closer to 50c from today what will it be once the CC results are in? The level of dilution at 50-70c means than even raising $10M at 50c means another 20M shares out of 1.03B – a very small dilute. I would be very happy with that.

Not sure what people’s thoughts are on this but hopefully it will promote a bit of discussion until the company confirms finance.

Good day today – enjoy a cold bevvy tonight people…