Where is the value now? Right and critical question for all...

Where is the value now? Right and critical question for all holders or traders salivating at a stock now trading at basically net cash + capex invested in Yangi ($110M + $90M = $200M MC) considering ignoring the ~$70M shortfall between Wyloo con-note debt and value of the 20% NEO stock. I feel for shareholders, not so much Charles who has made some poor decisions and mislead investors a merry dance along the way (while still getting paid well it has to be said).

I'm keen to breakdown the new 2-stage DFS numbers to see what is really going on behind the very slick update presentation. You just know it's not as rosy under the hood as presented, but I'll let the facts speak for themselves. For example though, Stage 1 NPV8% post-tax $538M excludes $90M of capex sunk since Feb'22. You can't do that... everybody spends some capex early before FID, that is counted as 'equity' when lenders consider what gearing level they will lend up to, and that $90M equity is obviously part of the capex that needs to be covered by future free cashflow. Fact is, for a $470M capex ($770M all up geared investment) the NPV = $448M, which isn;t great even at the price assumptions made (which I will tease out from the limited data provided).

Anyway, point of this post is to say where to and what value from here is almost entirely reliant on politics. It's been obvious for a while Yangi was uneconomic and unfindable without serious government subsidies, which started at $140M NAIF, jumped to $220M, followed up by EAF with another $100M. Still needs another $60M debt and $190M equity on re-read, which says the NAIF and EAF loans are sensibly limited to a 50:50 debt:equity funding ratio. HAS needs these funds to stick around even if they pivot to selling China a mon-con, and/or some government bankrolls a new mon-con cracking plant for 35,000t Yangi con +/- others.

In short, unless the Stage 1 plan is actually economically fundable with another $200M risk equity (spoiler alert, I don;t think it is) HAS needs the recent multi-government subsidy talks to back up with even further off-take price subsidies and third party toll-treating hydromet plant subsidies to get up ex-China, probably even selling into china. There is no shortage of subsidy seeking companies around the globe all salivating at the chance for an ILU like soft loan come grant to build a potentially profitable downstream RE business with government risk money. Capitalism never changes right, love a 'free-market' but especially when you can capitalise the gains but socialise the losses...

Might take me a while to work through the new Yangi plan, but i'd rather do it right the first time than risk impacting reader's sentiment with rushed analysis with major errors. I don;t hold, never held, never shorted, but damn I must be a nerd because the thought of running my knuckles over a Yangi re-do spreadsheet is the most interesting thing to happen this week

GLTAH