Even if Anglo don't go ahead with the deal, is it such a big risk? It would be ideal if Anglo stayed on especially for the future HISMELT opportunity, but for the DSO product, I don't see funding as a big risk.
MGU can still sell on the spot market which is currently at $167. MGU is using Panamax ships of 60kt-75kt and at US$150, that's US$9m, which is around AU$12m.
MGU only needs prepayment of one month's/one ship worth of iron ore supply to be able to fund the Capex.
They could even borrow at ridiculous payday loan rates of 20% p.a. and still be able to repay all of that back within the first month.
The beauty of this project is the extremely low start up Capex.
MGU Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
