Hi 1357.al.toh, an interesting question to ponder...
IMO they would wise to take as much debt as they can get their hands on, be that the OzGov Critical Minerals Facility (via. Export Finance Australia) or corporate, possibly from a new strategic partner secured by presales as part of an HMC offtake agreement...we had one of the founders of Lomons Billions invest $7m $.54/s back in May, maybe LB Group would be willing to provide some funding to secure a long term source of HMC? Though LB caused all sorts of grief over at IMA trying to get control of their HMC output, and lots of debt = lots of risk!
The equity component is awkward IMO, as any PRC based keystone equity investment would risk kyboshing possible OzGov/CMF loan funding. SFX ended up selling down half of their Thunderbird HMS project (via Kimberley Mineral Sands - KMS) to Yansteel, who also agreed to offtake all the ilmenite and still managed to secure a $160m NAIF loan, however Thunderbird does not have a substantial monazite component and therefore doesn't carry the strategic RE baggage that Donald does.
40% of $400m equates to $160m in new equity that will have to be raised, or around 200% of ATR's current market cap. No chance of raising that from their extremely thin shareholder base, so IMO Tiger B. would need to be looking for a strategic partner (preferably Aussie, maybe Yankie, anything but Chinese...) who is looking to get a foothold in an advanced RE developer with HMC credits. Our W.A. based billionaire I.O. entrepreneurs have all had a dip into RE's recently, Gina R. is heavily invested into Arafura, Twiggy has snared HAS and possibly NEO in a cunningly structured con note and Chris Ellison was a pre IPO investor in our competing WIM developer VHM and still holds +9%...which has lost 65% since floating at $1.35 in January 2023- ouchy!
If Ellison has not been too burnt by his experience in VHM and still interested in WIM projects he might consider a stake in ATR and/or Donald, particularly if his braintrust has done some due diligence in comparing DFS's and coming to the conclusion that (as I did here, Post #:67825348) the Donald DFS is based on far more conservative assumptions and therefore the headline financial metricise are inequitably skewed in favor of VHM. Ellison is a renowned deal maker who has built MIN from the ground up, with no Forrest or Hancock family bankroll to help, and would be no walkover. To catch a big fish such as Ellison, Tiger B. would have to be willing sell down his controlling interest, if not in ATR then Donald, as SFX did in Thunderbird.
As for a FID CR price, they seem pretty set on the .54c of the last SPP in Nov 22, same as the strike price for the $6m CSAM con note ($5m +$1m capitalised interest) maturing in Feb 24, same as the $7m in equity raised from Mr Tan Ruiqung in March 23, and $2.68m from sophs @.56c last month, with all CR's subsequent to the SPP at a premium to the prevailing shareprice.
So for a potential ATR capital structure at FID in 2024: 149,641,362 current shares @ .54c = $80.8m in market cap, CSAM con note conversion in Feb 2024; $6m @ .54c = + 11.11m shares $160m FID CR @ .54c = 296.3m shares (includes an SPP/rights issue for current holders) All up 457m shares at FID @ .54c = $246.8 market cap + loans of $240m would give them an EV of $487m, with a debt/equity ratio of .97/1 Against a Donald phase 1 NPV8 of $852m, it would appear to be viable.
DYOR &GLTAH!
ATR Price at posting:
52.5¢ Sentiment: Hold Disclosure: Held
(20min delay)