70% increase ownership in IM3NY.pros vs cons, page-60

First 60 Last

Share
Profile

Follow
TopSahara

7,761 Posts.

514

20/07/23

14:12

Post #: 68889077
Share

Originally posted by Amorga: ↑

Con's of increased ownership of iM3NY
- Primarily, it is the illiquid nature of the investment. While Magnis is seeking to develop Nachu and the AAM facility in the US, they are incredibly restricted to accessing funds to develop these projects.

Pro's of increased ownership
- increased ownership stake was at a discounted valuation, realising additional equity for Magnis
- They stand to benefit more from any of the project earnings as well as stand to gain more from any financing associated with the project (where the valuation exceeds the valuation Magnis converted the loan to Equity)
- Conversion of debt to equity clears the liability from iM3NY accounts. By Magnis accepting additional equity, this removes a debt liability of approx $18M from the iM3NY books. Clearing this liability may greatly assist in iM3NY's current intentions to gain additional finance via the DOE/LPO, other financer or potential equity partners.

Considerations
I would say that Magnis' conversion of loan to equity is indicative of current negotiations for iM3NY finance/expansion.

- Loan was made on 31 March 2023 with a 24 month term. Interest of 10% paid annually in advance.
- Loan did not stipulate any principle repayments, suggesting MNS had a 2 year option to convert the Loan to Equity
- Loan converted to equity on 3 July 2023 (just 4 months into the 24 month term)

Magnis Placement of $10Mill on 17th July (2 weeks after accepting equity)
- Cashflow for March Quarter showed approx $13.5M in operating costs
- The $10M is not a significant amount relative to the ongoing cashflow requirements, assuming similar ongoing operating costs and assumptions revenue still not being realised

This, to me, suggests that magnis is expecting in the near term access to funds to assist in developing it's projects. This could be Finance for Nachu or the AAM facility, or (what I believe to be more likely) accessing funds through a Finance/Equity agreement with iM3NY.

People can obviously speculate what they wish, but this is how I am interpreting the actions

Expand

We all know how easy it is for them to access funds, don’t we.

MNS Price at posting: 12.0¢ Sentiment: Sell Disclosure: Not Held
2 Upvote

0 Great analysis

Reply

Top Stories

WC8

Leia pegmatite pulls up recoveries of 84% lithium for Wildcat in WA

VTM

Victory Metals boasts Australia's largest indicated REE JORC-compliant resource

Week 28 Wrap: ASX hits all time high; CBA shares' two realities; US inflation hits 3% ahead of China plenum

I88

Infini soars 50% as company reveals it could’ve just made uranium history – redefining what it means to be “high grade”

EOS

Electro Optic Systems inks 92% revenue growth for 1H CY24

There are more pages in this discussion • 9 more messages in this thread...

First 60 Last

Add MNS (ASX) to my watchlist

(20min delay)
Last 4.2¢		Change 0.000(0.00%)		Mkt cap ! $50.37M

Open	High	Low	Value	Volume
0.0¢	0.0¢	0.0¢	$0	0

70% increase ownership in IM3NY.pros vs cons, page-60

Leia pegmatite pulls up recoveries of 84% lithium for Wildcat in WA

Victory Metals boasts Australia's largest indicated REE JORC-compliant resource

Week 28 Wrap: ASX hits all time high; CBA shares' two realities; US inflation hits 3% ahead of China plenum

Infini soars 50% as company reveals it could’ve just made uranium history – redefining what it means to be “high grade”

Electro Optic Systems inks 92% revenue growth for 1H CY24

Featured News

Featured News

70% increase ownership in IM3NY.pros vs cons, page-60

Top Stories

Leia pegmatite pulls up recoveries of 84% lithium for Wildcat in WA

Victory Metals boasts Australia's largest indicated REE JORC-compliant resource

Week 28 Wrap: ASX hits all time high; CBA shares' two realities; US inflation hits 3% ahead of China plenum

Infini soars 50% as company reveals it could’ve just made uranium history – redefining what it means to be “high grade”

Electro Optic Systems inks 92% revenue growth for 1H CY24

Featured News

Featured News