I can’t see the immediate need or benefit from a near term CR, with $25 mill from Nissui having just gone in. As I have said previously, unless there are unforeseen major problems causing SP reversal, I really can’t see any future CR at less than 10c given that Nissui just paid that amount and they won’t want to be selling their stake at a discount ( even though they have the option to top up to keep 15% stake). This should effectively put a floor under the SP at around 10c and with volume going through above 10c last few days this is reinforced.
My understanding is that when SFG go to seek funding for the PSD work, they will not necessarily dilute SFG, but rather sell a % of the PSD subsidiary company to other partners, with attached offtake agreements. When they get a price for that, we can then extrapolate value back to SFG. Impossible to value PSD or SFG until that mix is known, but in my view it’s a lot higher than current SP so I am looking for this re-rating to continue, no doubt there will be some speed bumps though
SFG Price at posting:
11.5¢ Sentiment: Buy Disclosure: Held
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