Of course I prefer the company bringing a JV partner.
In the case of 500mil-600mil tons resource, if management is to bring in a JV partner after we have signed up a few off-take agreements I believe sp would be over $3-$4. The JV partner would pay us roughly 40% of our MC to participate in the JV which is roughly 40% of $2.2bil-$3b = $880mil-$1.3bil which is more than enough us to contribute towards 60% of the equity part of the CAPEX.
If CAPEX is $3.5bil, and debt-equity is 70%-30%, then the JV needs to have 30% of the CAPEX or around $1.1bil cash component.
60% of that cash component is our contribution = $660mil.
We receives $880-$1.3bil from the JV partner. That is more than enough for HIO and we don't need to do a CR.
The benefit to HIO share holders is absolutely compelling. We have a strong JV with operational experience and we have the dividend to collect each year.
HIO Price at posting:
61.5¢ Sentiment: Buy Disclosure: Held
