Although the offtake agreement is a good step forward, I'm finding it hard to get excited yet. Financing is at least three months away and, given AAUs history, probably quite a bit longer. A capital raise seems very likely before then.
The way the announcement is worded (e.g. identity of the counterparty ... the impact of the off-take agreements ... on the price or value ... not misleading by omission) makes me think that the offtake agreement, while a prerequisite for financing, is not increasing the probability of achieving financing all that much. It also covers their backsides when nothing substantial happens down the track.
The last paragraph says: "The mine is fully permitted, and the aim is to finalise the financing within the next 3 months to allow construction commencement, with commissioning 12 months later”. It is still just an aim, much like all of the aims in the past. Had a source of financing, a list of prerequisites and/or a schedule of events to achieve financing had been stated instead, then it would feel more real.
I think that after this initial spike in share price we have just seen, the share price is going to drop back within a few days or a week or two, if nothing significant is announced.
AAU Price at posting:
0.5¢ Sentiment: Hold Disclosure: Held
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