Ann: Investor Presentation - Equity Raising & Growth Strategy, page-18

Hi Hiepn2_2005, I don't think your correct, the deal as I read it is;

SFX advances RMG an unsecured loan (interest rate ?) of up to US$2.5m, for which it is granted an option (dated July 2024) to acquire 20% of RMG (100% owner of the South Atlantic Project) by converting the loan to equity and paying a further US$12.5m.

RMG are also committing to contribute between US$3m - $5m to fund 'de-risking activities' (JORC/DFS/Licencing etc.) for a total project expenditure of between US$5.5m -$7.5m by July 2024.

After converting the 20% option, if SFX completes all 'subsequent' stages, including project funding and commencement of project construction, they "may earn up to at least 80% of RMG with further option to acquire remaining 20%"

If, may and up to at least are all non specific terms that would be frowned upon by any decent contract lawyer, so would I assume the 80% - 100% ownership agreement is still to be finalised, hence the lack of detail in the release.

So, SFX provide RMG with a US$2.5m unsecured loan to be spent on progressing the South Atlantic project and are granted an 18 month option to acquire 20% of RMG for a total of US$15m, valuing RMG at US$75m.

Being a loan, if SFX were not to take up the option to convert to equity they would undoubtedly demand repayment by RMG of the US$2.5m, but they would have no ranking claim on the South Atlantic Project or any other RMG assets as they are unsecured creditors. If RMG failed to repay the loan in these circumstances, SFX's only recourse would be via legal action against RMG in Brazil, and as RMG is controlled by MSP who appear to be a well established Brazilian conglomerate, this might prove to be a difficult task.

It would have been better if SFX had tied up RMG in convertible notes secured by the assets of South Atlantic project (as CSAM did for ATR, A$5m +$1m interest secured by Donald), but I suppose it is better than providing a 'non-recourse' loan. Anyway, for a reasonably small investment SFX have gained a toehold in a promising project that may give our management another job once TB is built and commissioned, so we need to trust that Bruce G. is on the ball.