I don't think this project will have too many issues with funding, holders will be keen to see Capex debt funded for the lions share, but in reality we should expect equity to be included in the mix, what sort of D/E mix is anyones guess, so I will go with 70/30 guesstimate with a hope that holders receive some favourable treatment.
Kidmans Capex share is around the $370m, not a great deal when you look at 22,627 tonnes LiOH annual production from what looks like a very low cost operation, people who have looked at this with more experience than I have indicated they expect this tonnage to grow while costs can be further optimised. This is a very attractive multi decade asset, buying in around these prices will look amazing in a couple of years IMHO.
As with all nice liquid stocks with no income and a project to build we should expect the market to enjoy it as somewhat of a traders play, but even so the macro tends to be the major influence on solvent projects, you can't have a 50 percent Lithium price correction snapping a multi-year winning run with constant commentary of the looming over supply and expect much good to happen, in fact 2018 was an annus horribilis.
I believe 2019 will be a totally different story.
Cheers Phil.
KDR Price at posting:
$1.25 Sentiment: Buy Disclosure: Held
