Generally positive, obviously with the extra $400m Ausgov. + $214m ILU + $150m contingency in the funding package the Eneabba R.E. refinery will be built, and therefor the Wolverine offtake remains a goer. The market doesn't like it though, ILU down 13% as I type...
Looking at the three RE feedstock scenarios ILU presents, Scenario B (Eneabba, Balranald, Wimmera + Wolverine + third parties) gives the best utilisation of the refinery and therefore the best financial metricises; IRR 43% & NPV (8.25) $1.94b at the 10 year historic NdPr price of US$84/kg, IRR 51% & NPV (8.25) $3.37b at the Adamas forecast of US$108/kg NdPr. That's $3,366,000,000...not a bad potential return for ILU shareholders given the Great Australian Taxpayer is taking most of the risk!
This is pure speculation on my part, but I would be surprised if ILU has not had to give the government a firm commitment to support the Wolverine/Browns Range project as part of the funding deal. That's Wolverine/Browns Range but not necessarily NTU. I suspect the rationale behind the monster NTU capital raise was in part to provide a contingency fund to cover the $15m ILU con note maturing on 31/12/24 if ILU played hardball and decided to call it in. No way they will convert at 6cps, so they will now probably kick it down the road and give NTU a 12 month extension and see how they are travelling post Wolverine DFS.
IMO (as a former NTU holder!) the best case for our nation would have been for ILU to put NTU to the sword via the con note and force them into a Scheme of Arrangement, giving the current (predominantly Chinese) shareholders a bigtime haircut, and restructure the capital so that the Browns Range project is controlled by Australian aligned interests rather than by the Dragon. However our Chinese friends have put that scenario to rest by their generous support of the recent NTU capital raise...I do love the way the Dragon just holds back a little from rolling the NTU board (49% of votes) to show them who really is in control of NTU without upsetting the Australian Government!
Everything now hangs on the outcome of the Wolverine DFS, at least with the pre-release reviews by all the inside parties it should be extremely robust. GLTAH & DYOR!!
NTU Price at posting:
2.3¢ Sentiment: None Disclosure: Not Held
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