While superficially changing capex from $125m to $185m looks like its going to increase the size of the probable capital raise/dilution to get this project operation, it may not!!
Under the $125m variant there was a small gap but working capital wasn't allowed for in this total and would have also been many ten's of millions, particularly as you need to plan for the possibility of commissioning issues.
Under the DFS, capex is up at $185m but as per the graph below there is 40kt of Spod in 2025 (and circa 25kt of spod in the first half of 2026). If prices are high and this Spod has a $2kt margin it would bring in $80m of cashflow during the 2025 year. Across 2024/2025 there's now $60m more Capex and potentially $80m more net cash inflow prior to commissioning of the DMS. From a pre main DMS production viewpoint, its almost as if capex reduced to US$105m (on strong pricing scenarios).
If there are DMS commissioning delays for the Main DMS, the project still has the modular DMS providing cash flow so this reduces the working capital contingency required to cover larger than contingency cost overrun's &/or commissioning delays. On upside Spod price estimates, there may not even be a capex gap that needs funding, however Atlantic would obviously need to plan for downside scenarios. IMO this significantly increases the chances of an offtake partner that is prepared to provide something like a 2-3 year US$100m loan finance facility to Atlantic. GM did a US$85m loan deal with E25 recently. Ford did a $300m loan deal with Liontown. Deals like this are now occurring and should be easier to strike than getting them to invest equity.
A11 Price at posting:
61.0¢ 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)