Ann: DFS Delivers Compelling Economics for Cabinda Project, page-197

It's amazing how much of a big deal HC poster's have made of the delays we had through the last two years which by other company's standards were probably relatively minor in the covid period. MNB only won the rights to the deposit as manager around 2 or 3 years ago so I think they have done very well to get to this point in that time frame in the covid environment. Now investors or traders are fretting over a relatively minor ($15mill) cash shortfall which is a very small fraction of the base case NPV of $203mill or spot case US$399 million. That will be a short term issue. We can be very glad that our capex was so low to start with considering the effects of inflation over the last couple of years.

Compare to TNG below. They were supposedly close to construction 3-5 years ago and had their DFS completed more than ten years ago if I remember correctly. Today they announced what looks like will be a capex blow out in the hundreds of millions from the most recent update in 2019 (they don't even know how big a blowout yet). I think we will see that over many more large capex projects.

" The previous capital expenditure estimate released by the Company in September 2019 was for pre-production
capital expenditure of A$824 million (noting the TIVAN® Processing Plant was located in Darwin at that time) (see
ASX announcement of 11 September 2019, and incorporated detail from the updated feasibility study
announcement of 20 November 2017). This figure assumed that additional capital expenditure for certain areas of
equipment and plant totalling $491 million (previously $562 million as at 20 November 2017) would be funded by
third parties under “Build-Own-Operate” arrangements (and corresponding lease payments were included in
operating expenditure estimates as noted in the 11 September 2019 announcement).
As has been previously advised, Clough’s ability to progress updated equipment pricing and the capital expenditure
estimate for the Project have been adversely impacted by unprecedented market conditions, largely driven by the
ongoing impact of the post COVID-19 pandemic, the escalating armed conflict in Ukraine, congested supply chains,
labour shortages and the general global macro-economic environment as previously noted by the Company (see
ASX announcement of 22 June 2022).
Clough has advised TNG that while this work is ongoing and in progress, the estimates of equipment pricing received
to date are significantly higher than anticipated, but are (in Clough’s opinion) unreliable and not accurate or
reflective of likely future market conditions. As a result, Clough has further advised it is not yet in a position to
provide TNG with a definitive overall pre-production capital expenditure estimate for the Project and further work
is required to complete this, with a completion target of mid-2023.
Notwithstanding this, the Company thought it prudent to confirm to the market (including on the basis of the most
recent discussions with Clough) that current indications are that capital expenditure (both for the Company’s own
pre-production expenditure and for any equipment and plant provided by third parties under “Build-Own-Operate”
arrangements) is likely to be significantly higher than estimated in 2019, although it is too early to determine the
extent of any capital expenditure increase until the Project’s capital cost estimates are completed. This is not
surprising given the changes in macro-economic and other conditions noted previously. "

Makes our funding requirements look pretty damned good.