It is very interesting no one is talking about the hinted suggestion that EMH may be diluted at the project level in Geomet .
Suggested , off takers to take a stake with prepayments , Also ERBD wont want any more shares in EMH , I would certainly think they too will want to be in at the project level . And they all will want a board seat to oversee their investment .
What does that mean , at least the share holder agreement in Geomet quantifies both partners will be diluted equally .
Now , when you get say two players that want to give you $100 mil each . How many shares do you give them ??????????
At the moment there will probably only be 100 shares in Geomet , 51 for CEZ and 49 for us . That doesn't sound like enough shares to go around ?????? The whole trick here is GEOMET will need to be independently Valued to asses what the $100 Mil each would be in terms of precentage of the whole value of the project . I am thinking we can reverse engineer a value and a percentage that we may give away . I am liking the 5% figure below , we dont want to give away too much .
| Cash Input | | Geomet Valuation | | |
|---|
| 1 | $200,000,000 | | $1,000,000,000 | | 20.00% |
|---|
| 2 | | | | | |
|---|
| 3 | $200,000,000 | | $2,000,000,000 | | 10.00% |
|---|
| 4 | | | | | |
|---|
| 5 | $200,000,000 | | $3,000,000,000 | | 6.67% |
|---|
| 6 | | | | | |
|---|
| 7 | $200,000,000 | | $4,000,000,000 | | 5.00% |
|---|
| 8 | | | | | |
|---|
| 9 | $200,000,000 | | $5,000,000,000 | | 4.00% |
|---|
| 10 | | | | | |
|---|
| 11 | $200,000,000 | | $6,000,000,000 | | 3.33% |
|---|
| 12 | | | | | |
|---|
| 13 | $200,000,000 | | $7,000,000,000 | | 2.86% |
|---|
| 14 | | | | | |
|---|
| 15 | $200,000,000 | | $8,000,000,000 | | 2.50% |
|---|
| 16 | | | | | |
|---|
| 17 | $200,000,000 | | $9,000,000,000 | | 2.22% |
|---|
| 18 | | | | | |
|---|
| 19 | $200,000,000 | | $10,000,000,000 | | 2.00% |
|---|
But then hey PRESTO the project now has a valuation out side of any international broking platforms .
I wander how the share price will then perform in each international duristriction after this . We all know stockmarkets can get it all wrong . On the point of the offtake based on above , I would certainly be happy , to get the project further down the line ie CRMA Critical Raw Material Status etc to create that whole value in Geomet B4 an offtaker flashed some cash at us .
The higher the Geomet Value the less dilution . And then add Geomet will mostly be funded with loans , grants and others . EMH will not only get diluted by a small amount in Geomet , but will not also be diluted as EMH as we may not need any cash for capex .
The kicker here in my example above EMH will still own 46.5 % of the project valued at $1,860,000,000 Or $8.96 aud a share . Even halving the value it is still monumentous . Oh how the stock markets get it so wrong .
