Grieve is the main game for ELK and it has been a long road for the faithful. Grieve does need $20M for the phase 1 development and the business plan is to obtain a JV partner to fully fund this cost for 50% of the entire field. Cash flow from phase 1 will be used to develop the remainder of the field. If a JV cannot be found, then a combination of project or more expensive mezzanine debt could be used. I understand that ELK have spoken to at least one US bank regarding this option. The final alternative as you correctly point out is a combination of equity and debt. I am hopeful that we get a clearer picture of these funding options Thursday week at the AGM.
Surtek are the world leaders in chemical flooding and have taken a very deliberate and scientific way in conducting the radial core testing. While this has taken a lot of time it should give us confidence in the recovery rates. If you go through the past announcements, Surtek have successfully worked on the Thompson Creek field and have had great results. (refer case study)
Im not sure on the environmental approval process and I will ask about this at the AGM.
Hope this helps
DJ
ELK Price at posting:
18.5¢ Sentiment: Buy Disclosure: Held
