for shites and giggles I poked around some old Tanzania DFS...

for shites and giggles I poked around some old Tanzania DFS documents. My question was is a sale of these assets even under duress sales, deliver enough cash to maintain Coburn?

Morgans have ascribed a "risked valuation" of A$35m and A$147m to Fungoni and Taijiri respectively. This represents about 50% of NPV estimated by maybe Morgans or a product of one of STA's studies. Regardless, in view of their recent track record, you would think these valuations would be "sellers valuations" and need a little more 'refined' discounting.

The Fungoni DFS is an interesting read and I have no doubt, will feed the readers most cynical appetite for sadly what look like estimates and attitudes repeated in Coburn DFS document. Certainly cringe-worthy reading. I think the Fungoni DFS was done before the 16% free carry deal with the government and maybe key pricing assumptions might now be a little more bullish so some not so faint hearted adjustments might need to be made. Certainly, any land compensation amount in Fungoni DFS was not as obvious as the A$12m in the recent qrtly.

Nonetheless, is a sale worthwhile?

A transaction based on Fungoni alone would not work.. doubt it could raise anything meaningful : A$10m maybe. Maybe BSE could make it work pre Toliara. But if there's a neighbour 23yrs life, then hard to imagine anyone not looking at that. So a bundle it is I suppose.

If the purchaser:
- could maintain the documented relationship with the government;
- could fairly quickly understand and articulate legacy project risks (including legacy sovereignty risks); and
- was ready to move,
then maybe a deal could be done.

However, I suspect STA lenders will want a lot, if not most, of any proceeds so that they can reign in their debt exposure commensurate with their geographically narrower security parcel. Maybe not a lot of working capital would necessarily be released.

Looking at it this way then, IMO they'd need at least a clean A$70m+ to calm the lenders and avoid (... er minimise ...) drowning current shareholders in a CR abyss.

I think BSE paid US$75m for Toliara and it would be fair to says its development possibly not as mature as Fungoni and Taijiri.

Possible I suppose. Tough gig, but just maybe a good path.

Have a great day