Yes, having a clear funding plan is highly recommended, though...

Yes, having a clear funding plan is highly recommended, though not strictly mandatory, when submitting a Pre-Feasibility Study (PFS) to the Australian Securities Exchange (ASX). Here's why it is important:

1. Compliance with ASX Requirements

• While the ASX does not explicitly require a detailed funding plan in the PFS itself, clear financial and funding assumptions are essential for complying with the JORC Code (2012).
  • The JORC Code requires disclosure of material assumptions underpinning production targets and financial forecasts.
  • If the viability of the project relies on securing funding, a clear plan helps demonstrate that the company has considered how the project will be financed.

2. Market and Investor Confidence

• The absence of a clear funding plan can raise concerns among investors and the market about the feasibility of the project.
• A well-defined funding strategy reassures stakeholders that the company is taking a realistic and actionable approach to financing project development.

3. ASX Queries and Delays

• If the funding plan is vague or omitted, the ASX may request clarification or additional information, delaying the PFS announcement.
• For instance, if a project's capital expenditure (CAPEX) is high and no financing details are provided, the ASX may question how the company plans to proceed.

4. Past Examples

• Companies have faced delays or investor criticism due to unclear or overly optimistic funding assumptions. For example:
  • Case A: A company announced a PFS with significant CAPEX but provided no details on potential debt or equity financing, leading to ASX queries and skepticism from investors.
  • Case B: Another company addressed funding explicitly, outlining debt facilities, joint venture arrangements, or equity raises, which helped avoid delays and improve market reception.

Best Practices

To avoid issues, companies should:

1. Include High-Level Funding Details: Outline whether the project will be funded through equity, debt, joint ventures, or other mechanisms.
2. Provide Realistic Assumptions: Ensure assumptions around funding align with the company’s market position and financial capabilities.
3. Engage Early with ASX: Discuss potential funding disclosures during the pre-lodgment stage to address any concerns upfront.

In conclusion, while a specific funding plan may not be explicitly mandatory, it is a critical component of a robust and credible PFS submission to ASX.