Contrary to our resident troll, aka Randy, I'd say the market...

Contrary to our resident troll, aka Randy, I'd say the market picked up on the significance of the deal later in the day. Augurs well, I believe, for the immediate future.

Seems to me that ARL have got themselves into a position of strength, similar to the deal HRR struck with Inco all those years ago. And similar to that deal, it would seem ARL will retain all DFS materials should FID not be taken, as the JC-SPV will only have 35% ownership at that point in time. Significantly, the JC-SPV will only earn its 50% rights when it assists in optimising debt finance once FID is taken. I take this as reasonable assurance that the JC-SPV will be ultimately responsible for the debt financing - otherwise it may not earn it's full rights to 50%. That's the part I really like about this Cooperation Agmt.

What I don't necessarily like is that ARL have given the JC-SPV the 'tie-breaker' vote (see below extract), if there is a deadlock after FID is given - in certain circumstances? (obviously we probably won't know what these circumstances are even after the SH Agmt has been negotiated).

I can convince myself that position should be OK, because by that time the JC-SPV will have earnt it's 50% rights by optimising debt financing and it's the JC-SPV that has the knowledge and experience to take this project through to production. So it's probably fair enough they have the deciding vote after FID is taken.

And finally, which may end up being a twist in this announcement, is what if ARL puts in the hard yards and achieves a high percentage of the funding required through Aust and foreign export financing authorities? ASM (which is in a similar position to ARL with a long mine life, low SOI, high value critical minerals project located in Dubbo NSW) has already secured Letters of Intent to finance (below extract), from not only Aust's EFA ($200M), but also from Canada's Export Authority of up to $400M and the US EXIM for $US600M ($AU923M). Does that mean JC-SPV won't/can't earn up to 50%?

It's when the financing offers start coming in that we will likely see large, excited action in the SP. Well, that's my opinion anyway.

Finally, the other titbit I liked was that the offtake agmts won't be finalised until AFTER the DFS has been completed, which also means that final pricing for the OTA is more likely to be based on market values at the time. Means the JC-SPV can't really influence the numbers to secure cheaper offtakes, because that would then lower the DFS numbers. Much better negotiating from a position of final DFS numbers than 18 mths earlier and only guessing what mkt prices may be down the track! But they've probably already discussed a % discount on mkt prices (or an average mkt price so that both parties can benefit from mining price cycles).

But having the CO-Op Agmt outline the quantum of the OTA's and that the JC-SPV is interested in the lot will be invaluable when negotiating debt finance.

And before our clown/troll picks up on the 100% offtake point (that's if Randy has read this far) - it's NOT 100% offtake - ARL still has another 50% resource sitting on it's books OUTSIDE this agmt.

Great work IB, AP and the rest of Team Ardea, this is a fantastic starting point..