Ann: $18.8 Million Royalty Financing, page-57

There are comments on here that I tend to agree with about Dave's language that tends to hype the underlying message. However, in Dave's talk there is obvious pride and confidence in what AW1 has discovered. Also, you can't fault his work ethic and deals like this royalty show a preparedness to explore alternative funding when the market is heavily discounting the underlying value.

I want to see some robust drilling results too and I'm certain that Dave is desperate to tell a positive story. Like last year it will probably come in a rush starting in July. And tbh it really needs to because the company is counting on the oppies being converted for that extra equity funding going forward.

About the royalty, I read it quite positively as not only a vote of confidence about the quality of what we have and it's further prospectivity, but also as stated by @Giovanni33, the time frame to, and also the likely quantum per annum of production. The model used to determine the valuation and prepayment risk capital has to accommodate those issues.

There is still going to be a decent chunk of new capital needed to get to production and that will drop out of the upcoming feasibility studies. I mentioned in earlier posts about the need to stockpile production in months when there is no seaway access and that will require a lot of working capital financing and is probably a reason for the style of royalty. The deduction of such costs for financing the stockpile and transportation would be significant.

In my view minimal time to production of our DSO product is the key factor that will deliver robust shareholder returns. If our drilling program this year delivers, then this non-diluting deal will look clever as new raises can then be done at a much better price.

Regards

DF