Well, it's a quick reminder that the old mate T.E.P was happy to tell everyone he exited QPM a few months ago at 15-16c range and "subtly" promote a potash play at 13.5c.
I hope not too many followed him considering that potash play is now sitting at 5c.
Now he is making posts as if GM should have invested at NPV level instead of market cap. Which is absolute non-sense as this has never happened for any company in the history of the stock market. Equity investments are paid relative to market cap, plus premium or discount.
No one will ever pay the value of a yet-to-be-built project over 30 years.
Regarding the ann, I'm very happy with GM being the 3rd offtaker considering their existing relationship with LG, the recent Inflation reduction act and the media exposure we will be getting from that partnership.
To play the devil's advocate though, I think we went all-in too early and for too cheap. If we consider phase 1 + phase 2 total production over the 30 years life of the projects, we just committed 90% of our Ni/Co for what's likely to be 6-8% of the capex necessary for phase 1 only (1.4-1.8bn$ au range estimated here).
And that 6-8% Capex came in equity form, at a slight premium. (16.6c real value when taking free options into account using a Black-Scholes model), therefore dilutive in nature compared to a prepayment or debt.
Now the big question is the rest of the financing considering we don't have many bargaining chips left except a few by-products.
I hope the good Dr has a solid plan and the rest of the financing lined up. Getting firm offtakes for full production from three tier 1 companies before the DFS is even out is an incredible achievement. Hopefully, the company's roadmap is now impressive enough to secure the rest of the financing at favorable terms.
QPM Price at posting:
17.5¢ Sentiment: Buy Disclosure: Held
