Great news, and puts a fullstop on what has been in discussions...

Great news, and puts a fullstop on what has been in discussions for some time. The pipeline of new projects is really starting to look good, and Yarra Valley Water puts them squarely in the large-scale bioenergy sector of the market. To my mind, this only expands their opportunities and lengthens their growth runway.

However, I think the discussion about the market cap misses a key point that the market is picking up on. Delorean will have 250m shares outstanding after the SPP and including all options - so at the current price of 17c, that's a market cap of $42.5m (not the reported $35m you see on your app). The shareholder update with the SPP didn't go much into the details of it unfortunately.

Secondly, I'd just note that they are looking to expand their debt financing by up to $200m. If one takes the current project pipeline as potential future debt (i.e. $45m Yarra + $26.5m SA1 + $17m VIC1) then it's likely Delorean will have ~$85m of debt by the end of CY23. That would place them close to 10x EV/EBITDA, which isn't too bad considering it does not factor in their growth runway and pipeline.

While it's possible that they could get the $85m of financing without needing another cap raise, they also have QLD1 ($33m), NSW1 ($25m?), NSW2 ($25m?), and VIC2 ($20m) in the pipeline, which would be more than the $200m Planum is seeking. Regardless, I find it very unlikely that the debt markets would allow Delorean to have a 5x leverage ratio ($200m debt and $40m equity). Either, significant cash flow from operations need to start coming in to improve the equity, or more likely they will need to do further cap raises (hopefully at higher prices rather than lower!). Brickworks' model of a joint venture de-risks this to some degree.

P.S. I added more at 16.5c below the SPP price, but I am also very well aware that the risk-reward here is not new contracts, but the capital structure they are able to put in place.