Morning BW and others and Happy New Year I hope 2023 is full of health, happiness and prosperity for all.
As promised I am responding to your post you took the time to put together last night. I have tried to respond in the same style you use (i.e. quoting particular extracts from the original message)
"My comments relating to DYOR don't have any negative underlying message about Transomine, they've been around a long time"Thanks for clarifying I and others had made an assumption you though the deal with Transamine SA was a negative one. I was aware they had been around for a long time and were a well established non ferrous metal trading house. I will note that they can only be successful if the companies that supply commodities to them stay afloat.
"They hold the upper hand as CYM's future depends on them, research them"I agree they hold the upper hand if they are the only ones willing to do a deal with us for an offtake. Maybe there were other suitors with even worse deals? I don't suppose we will ever know with the exception of Glencore which was apparently a worse deal. I'd also say the upper hand is one thing but it needs to be a mutually beneficial deal and profitable for both parties.
"... and look at this from their point of view, what's in it for them. It's the hardest debt to get. Then do the same for those who might provide senior debt secured against assets, a little less risk for them."I think its pretty simple what's in it for them. Guaranteed access to 140,000 Tn of Copper over the next few years in what most are predicting will be a bull market with a shortage of global supplies...Isn't that why we are all invested in Copper? In addition they get somewhere to park some capital and make a return on it via the loan of $35M USD.
As for those who will provide senior debt (which none of us know who they are) I'd say, they get somewhere to park some capital and make a return on it via the loan of ~ $200M AUD. I think the fact they are willing to loan us the money (if they do come through is a positive as they are confident we will stay in business and be around to repay it...I'm sure they prefer that to have to get mixed up in recovering the loan via an asset sale or similar.
"After CYM have their $50mil and assuming they'll get the senior debt we’re now in a position where we could run a cashflow forecast broken up into three monthy terms, even six monthly terms and compare that with the various milestones, production, financial, equip purchases, labour etc out to the end of calendar year 2026 and see how they match up along the way."I agree, it would be awesome if you were willing to share yours here and might go some way to getting other posters to respect your inputs and analysis if you were willing to share rather than just comment at a generic level.
"You can forecast and update their profit as you go, apply a PE and a risk percentage depending on where they’re at in the life cycle of going from explorer to producer. The risk percentage gets closer to 100% the closer you get, there's info on this. The numbers are now there to do this."
Again I agree, however I don't normally use a PE ratio until they reach production and have actual CF so at this phase while we are still essentially a developer I'm using a % of project NPV that increase towards 100% the closer we get to production, hence why securing finance is so critical.
"Baz mightn't come out so bad in the scheme of things when you're sitting in the chair of the financiers! ... which is what this is all about really."
Not sure I understand what you're getting at here in regards to the comment about Baz and sitting in the chair of financiers...however agree as per my comment above this is all about the finance at the moment.
My only other comments would be I'm assuming the interest on the offtake would be around 12% or ~$5m AUD per annum (subject to USD / AUD FX rate) which obviously drops off pretty quickly as we pay off the facility over the short term being around 6 years.
The senior debt I agree will be 10% or thereabouts so if we take $200M AUD then $20M AUD per annum is a decent hit to the bottom line but it is what it is and the only way we can get the project going so not sure what other choices we have. Again "if" Cu prices end up were we all think and outpace other OPEX costs we should be able to start getting stuck into reducing it. I'm unless unsure in commercial loan arrangements if an "offset" type facility can be used, given we know a decent chuck of the loan is for working capital we may be able to offset some interest initially if this is the case.
I know you probably don't care but pleas take this as genuine and authentic feedback, I think the reason other posters get the yips with you is that one post seems to be bullish and the next bearish to suit the agenda (a classic example in this thread is your bullish response to Sector and then the very next post being the apparent bearish one about Transamine SA, which started this whole discussion) and sometimes rather than take another posters point of view on board and consider it, you go hard on the defensive and it just creates conflict.
Anyway hope you have a good day and looking forward to seeing your CF analysis if you are willing to share.
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