I very much doubt we'll have only 2.2-2.3bn SOI when construction is done.
We have 1.75bn SOI at the moment, plus 140m options and performance rights. Some of the performance rights will lapse, so let's say approximately 100m options and rights.
That's already 1.85m SOI, fully diluted. Now, if we hope for a Capex downgrade to 1.9bn$ (which is a fair assumption IMO) and with 75% debt funding, that leaves 25% equity or 475m$.
If that's the go, that's still another 1.6bn shares @ 30c or 2.4bn shares @ 20c, which would propel us to 3.45bn SOI or 4.25bn SOI respectively.
Now, if they accept another 250m$ in funding, that would reach almost 90% from debt and it is a much better scenario from a shareholding perspective, which then only put us at 2.6bn SOI and 3bn SOI respectively. (Still for 30c and 20c raises)
But that would raise a few questions :
- What is the acceptable debt limit from current financiers for this project ? You can't pile up debt without limit, the package has to make sense risk-wise and be accepted by all parties involved.
- Why management kept bringing up 60%/40% in interviews if they intend to go with 90% debt ? Just say "We are working on the best possible package that minimize shareholder dilution". Then you don't scare away potential investors with a looming 800m$ equity raising.
Overall, I'm a bit confused at their communication around the funding.
Anyway, as someone said earlier, even if we end up with 4bn SOI, this is still a good investment proposition considering the TECH project - stage 1 should be contributing to ~4bn$ in market cap once in steady state I reckon.
This second half-year will be the most interesting one since the inception of the company for sure.
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