@scombley I think there is big potential around Egyasimanku Hill, but drilling it now doesn't assist getting a DMS plant running, doesn't clarify resources within a 2-3 kilometers of proposed plant and may not fit within the $17m Regional exploration and DFS budget that Piedmont is funding. I'm certain it's something Atlantic wants to do, but at the moment they are needing to prioritise cash and the Piedmont funded drilling budget. Drilling Egyasimanku Hill may therefore require Piedmont and Atlantic to have cash resources beyond that necessary to get the DMS plant running. At the moment they don't and the equation is US$70m from Piedmont, US$27.5m extra from Piedmont and US$27.5m extra from ALL for an estimated US$125m.
A11 will have more clarity on funding when they announce what is happening with the other 50% off-take and when they know whether the sovereign wealth fund is investing or not. Assuming essentially all the value from A11 is in Ghana and the market is already factoring in the Ghanaian government 10%, the project is worth A$900m at present ($900m*45%/605m shares = $0.67). It's unclear what value Atlantic/Piedmont may agree with the Sovereign wealth fund for a 5% stake but it may be a discount to the current share market implied value. Assuming A$800m is or has been agreed, a 5% stake in this would inject A$40m (US$28m) into the holding company. The funding shortfall reduces to US$13.5m each (plus a bit for expansion beyond 255kt plus a bit for working capital).
Atlantic had A$23.4m (US$16.4m @ 0.70) so with the Sovereign wealth fund the project funding equation is tight. There are also some options issued by Atlantic and if they are exercised, Atlantic gets cash but shares on issue increase from 605m.
Egyasimanku Hill may be among the first drilling that occurs when funded by production proceeds or earlier if Atlantic decides to do a Core and do a A$100m capital raise when near production, just when shareholders thought everything was fully funded. There were a lot of disgrunted HC comments about that capital raise.
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)