Apologies all, the information provided was inaccurate I and have requested the post to be removed. Explanation below.
The FS released on 22nd July 2019 incorporates an anticipated interest-bearing loan of 3.25% over 5 years. It also incorporated the full anticipated royalty equivalent payments applicable to Abra at 3.5%. Post this, on 4th December 2019 an ASX announcement was released confirming the cancellation of a 1.125% royalty payment with expected savings in excess of $40M over the initial life of mine. As such, The Taurus deal (and reinstatement of the 1.125%) doesn't impact the current FS numbers as much as first thought for the project NPV as it was already modelled into the FS with payments included.
Thus the net effect on the interest payments in a vanilla exercise increasing to 8% or $32.3M (Taurus) in lieu of 3.25% or $14.5M (FS) is ~$22.77 million extra repayments over the full loan term of 6 years. This doesn't include any other arrangement fees etc.
In the present scenario, G1A has already locked in $42M in Taurus Debt and cannot be changed. If alternative financing is arranged for the outstanding $100M Capex requirements (ie a 'mixed' scenario) this won't trigger the royalty reinstatement, the project stands to save approx $40M, and then save by not paying the higher interest percentage on $100M over 6 years = ~$14.2M
Thus the scenarios are as follows;
1. July 2019 - FS Base Case 100% Funding @ 3.25% = NPV $381/500M SOI = 76cps
2. December 2019 - FS Base Case 100% Funding @ 3.25% + Royalty Cancellation = NPV $421M/500 SOI = 84cps
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3. March 2021 - 100% Taurus Capex Funding @8% = NPV $355M/500M SOI = 71cps
4. (DESIRED) by July 2021 30% Taurus @8% + 70% Alternative @3.25% = NPV $410M/500M SOI = $82cps
Thanks,
- Forums
- ASX - By Stock
- G1A
- Ann: Half Yearly Report and Accounts
Ann: Half Yearly Report and Accounts, page-6
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