On the surface it is a good deal for TSO, but, there is...

On the surface it is a good deal for TSO, but, there is definitely more to it and i don't think we will get an answer.

Under the original purchase option agreement the Vendor owns 30% of the project up until 17 Jan 2022.

If TSO achieves milestone 4, TSO moves to 80% ownership and the Vendor's interest in the project ceases to be free carried. Which at this point TSO could have negotiated to acquire the remaining 20%, or, the vendor needs to contribute or be diluted.

TSO Mentions the timing risk of not being able to deliver a FS to achieve milestone 4. IMO, in Feb, with 11 months from the date the shareholder meeting was held until the 17/1/2022, IMO that is more then enough time to put together a Stage 1 PFS. Yes i understand that it will grow and change but that is no different to every other project, it is a fairly common situation. Bit too early to flag that as a timing risk this far out?

So in the event that TSO does not meet the requirements for stage 4, the vendor retains a free carried 30% ownership of the project. A deal is a deal, if i was the Vendor, I'd tell TSO to get f*ed and it isn't my problem. Using another real estate anology, if a builder f*ed up their tender, under cooked their programme, entered in to a contract and now is seeking an Extension of time 99.99% of the time the client would tell them to get f*ed. That is the reality.

But, the strange thing is now the Vendor is paying us $2.28 Mil to retain 30% ownership until 11 Feb 2022. & will need to contribute more money for future works beyond that that. LOL. Now remember, they already had 30% ownership up until 17/1/2022... So, instead of TSO paying the vendor $50K USD, the Vendor now pays us $2.28 Mil to retain the 30% ownership for an extra 3 weeks?Also losing all protection he had under the old purchase option agreement? Man, He must be the dumbest c* in the world or there is more to it....

IMO, I think the risk was us actually achieving that milestone and the vendor losing the 10%. Question is, why is he so desperate to retain the additional ownership for a meager 3 weeks extra? Also, open himself up to the risk of contributing a large amount of money in the future or risk dilution?

So the Pros & Cons are

Pros

• If TSO proceeds with the developing the mine and the vendor cannot contribute, TSO secures more ownership
• If the Vendor Contributes, TSO requires less capital for future works

Cons

• If there is a sale of the Asset, TSO's share of the asset is slightly smaller

The question is really for the Vendor and not TSO and because TSO isn't the Vendor, i don't think we will be privy to the real reason why this was done.

In the meantime, doesn't really change anything and the team on the field still needs to deliver the biggest resource possible to generate the most value.