SDL (ASX) Ann: Project Update

Originally posted by pe981: ↑

To me Market Caps at this end of the market are often hard to determine or justify. You can do all sorts of analysis on project values etc, however the path to their projects are never straight forward and anyone that invests in these speccies knows all to well how many times they are asked to put their hands in their pocket and the eventual dilutive recapitalisation that often takes place! ANS obviously provided some confidence for shareholders when they previously relisted and recapitalised which translated to current MC, right or wrong.
They have certainly had a rocky road over recent times and hard to work out where it is headed. Oakajee requires large capital investment as it is whole mine, port, transport which is obviously proving difficult to progress. It does have a nice tax loss ($70m odd I think), however again the project must be unlocked. SDL these days is mine only however they have an even bigger tax loss brought forward (some $400m) which may be harder to use for some - perhaps a clue?
One of the common misconceptions is when an Investor of Chinese origin puts up some money, shareholders are somehow comforted that the Chinese wouldn't invest unless it is a winner
The fact is, the ASX is littered with Companies that Chinese investors have lost plenty (as have most nationalities)
As I have said before the WAPRC deal is hard to fathom as it is purely a control event. The $100m allows that control event however means nothing to SDL in assisting renew the Mbalam convention as it only provides $8m working capital. It should also be noted that the Noteholders were only too happy to take a significant haircut to get some cash back with some equity retained just in case.
The real question has always been, can WAPRC bring to the table actual cashed up backers who can support the capital requirements to develop the projects (which they will commit to) and if so how will these investments be structured? Not some airy fairy deal which is very sketchy on how they intend progressing anything
If the Cameroon Gov are intent on pushing hard to get firm commitments then I guess we will find out soon enough, although perhaps they have to do some wheeling and dealing also for their own slice of it!!
(Sorry, went off on a tangent from original question.)
All just my rambling thoughts as I watch with interest...………………………..

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It is an interesting observation about Oakajee. If they got the attention of the Chinese (Sino Iron) instead of the Japanese this project would have gone ahead. Another poor decision by the then WA Premier. Instead the Chinese went with the worst possible IO deposit in WA to build a magnetite processing plant, that has cost them $10 billion+ with little return on their investment.