The major difference is not whether a Co has a BFS or DFS, but it' that KNL has had their BFS go through an independent Engineer company which was appointed by KfW bank, that independent Engineer company was tasked by KfW to find ant weaknesses in KNL's BFS...the original BFS was using 40ktpa production matrix...IMO the independent engineers suggested that the project's output needs to be increased by 50% to make all the project matrixes show a secure enough proposition for the ban to finance using the most conservative scenario.
After extensive work, the independent Engineer confirmed that Epanko is robust enough to be considered for bank finance.
To give you another example of a rare Co which is also pursuing German Gov loan Guarantee is ATC, brilliant project, but their original BFS was overly optimistic on everything going on the optimal side...so once KfW requested their independent Engineer be appointed to verify their BFS before the loan process can continue...the result was in a back-breaking increase in CAPEX and major adjustments to the projects matrixes.
Other examples of projects which looked brilliant from their own DFS/BFS without being scrutinised by an Independent Engineer;
* SYR * AJM * PLS * MMI
just a few to look at but you will get the point at why myself, the CBA and a few others place so much value on having a project claimed figures independently tested.
Why do you think most projects don't make it past commission stage or need years to turn a profit. The Directors will never 'tweet' the risks...they are happy to pump the project towards construction phase, if they are successful, that will mean high wages are secured for at least another two years and lots of free shares coming their way, then if they decide to leave or get asked to leave, they are free to sell all those free shares...Tolga (ex SYR) is a brilliant example..great salesman...rode into the sunset
The other big factor is the $$$ savings to be had by the project if it can secure Bank Finance is that the terms are far superior then any other form of Debt option out there...again very easy to compare interest rate % differences from projects that received KfW funding and projects that had to get funding elsewhere...the difference is phenomenal.
All IMO
...you quite rightly point out it is a lot more rigorous but you haven't got finance yet...
Again, you are leaving out the reason why we don't have finance yet...hint...same reason as to why no one else in Tanz has finance...hint...as per last announcement those reasons have now been resolved and KfW is proceeding with required paperwork...hint...looking at upside potential for both, from CURRENT SP, IMO a no brainer...
All IMO
KNL Price at posting:
14.5¢ Sentiment: Buy Disclosure: Held
