At the MoU stage vagueness should be expected. The actual quote is: " intend to establish a 50/50 Joint Venture (or other commercial arrangement) to construct and operate the bioenergy plant(s)". When they are yet to complete the feasibility study vagueness around exact commercial arrangements should be expected. There will be plenty of negotiating ahead should the feasibility study present something viable.
The good news is that either way DEL is making money from this whether it proceeds or not via consulting fees, so there is no real risk to DEL in the early stage. "Under the MSA, Delorean will undertake services for payment by Brickworks at market rates to enable the parties to assess the viability of the project including planning and development approval, detailed plant design, feedstock supply arrangements, digestive offtake, energy offtake and community consultation. "
My guess at this stage would be that the brickwork's wants to use a certain amount of gas for producing bricks and DEL will use the rest to produce electricity, so the exact split / agreement will likely depend on what size plant they decide to build, and how the gas is used. For example the brickwork's likely wants to consume gas on weekdays but electricity prices are lower on weekends (and at night/mornings). There are a lot of factors to consider on both sides when deciding what type of arrangement you want to have.
As an investor I'm very happy. They just keep bringing more and more to the table, remember they are also bidding on another 3rd party build in Victoria. Its only a matter of time until the market stops sleeping on this stock IMO.
DEL Price at posting:
19.0¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)