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newbie2016

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20/04/17

00:54

Post #: 24154605
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Originally posted by Sukurio ↑

The question raised previously revolves heavily around how the US$376M is going to be funded. I know Airconditioner has raised some points on this. Here is a brief take from my perspective.

A couple of variables.
1) Debt financing 50%-65%. This is a fair range so I would like to see confirmation of which this percentage leans to.
2) CR completed 16%
3) Free cash flow from MC. Assuming only free cash flow from 2017 project we can assume 120kt at 5.5% content is in the bag so if operation drains $400/T would bank US $51.6M minimum and up to US $80M for 160kt at 6% content. Range 14%-21%
4) The shortfall is between 0 after 12 months (max debt, CR and max MC) and 20% (50% debt, CR and min. Existing contracts).

The question is with a possibility of a 20% shortfall or 12 month wait is there motivation to run another CR in the next 12 months? Or protect the shareholders by:
Producing longer
Selling a stake
Taking on 65% debt level
Finalising deals for additional 40kT of Li concentrate.

I do like the idea of a consolidation for increasing value to new influential shareholders. I also
would like to get an assurance that if a subsequent CR to accelerate SDV or minimise debt becomes considered that shareholders get a say.

Of course these figures are conservative and any reports confirming cheaper costs and higher cashflow are welcome.

Expand

It takes more than two yeas, maybe three years for SDV, I think 376M is three years cost.

GXY Price at posting: 41.0¢ Sentiment: Hold Disclosure: Held
1 Upvote

0 Great analysis

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