Very understandable to assume AVL is only getting ore from TMT in this merger and nothing else, given the value of the offer..
But rest assured there is a bit more crossinf the fence to give you a better feeling about the increased share register.
I'll just dot point a few notable things IMO:
- TMT proved up around 6 to 7 years of saleable titanium byproduct from Yarrabubba that garnered considerable interest from Sinosteel. TMT have since drilled out more of that area and have a reserve update pending, so that could increase. Shortly after AVL saw the potential and drilled their section of that orebody.
Combining these has potential to extremely improve project economics in the first 5 to 10 years (maybe more), lower the payback period considerably, and honestly this is potentially how a project gets off the line vs looks mediocre and no one will fund it.
- TMT have completed a DFS, flow sheet, FEED study, kiln design for their onsite processing plant.
At worst AVL can take the IP regarding the early titanium processing/recovery and incoeporate it quickly into their plant, to gain said improved early stage economics.
- I can't give an actual timeline as who genuinally knows with the EPA, but it's a resonable guess that TMT were around 1.5 to 2 years more advanced towards final approval of a processing facility. There are rumours EPA plan to reform and start fast tracking, but until there is evidence of that we can only go by what's in front of us, so advancing a non-income venture by up to 2 years saves a huge amount of $. Add up the corporate and running costs for AVL for 2 years, and there is half your money back (if they take advantage of the EPA application).
- AVL proposed the offsite processing for a few reasons (trucking ore 600kms to process it isn't automatically a good idea, so there were reasons for it), and this I believe was a big contributor to winning the $59mil gov grant, so props there. But this was Vince's plan, and whether RCF or Graham still believe it's a better option than onsite, who knows... But buying out TMT has given a backup plan..
We can do it to death which is better/worse, maybe that's what the integration team are doing right now, but they now have a completely open door to do that assessment and lose basically nothing if they need to scrap the offsite plant.
By doing that they also advance the EPA timeline.. We will know though that both plans which each team committed to to the hilt on their own, can now go direct head to head and we will get the best parts of both and THE best plan to advance this project. period, that is a good thing whatever the outcome.
- EKF provided a tentitive approval for $150mil export credit finance. I believe this would still be available for the merged entity.
To me just the above is half of the value of this deal, maybe all of it, regardless of how much Graham plans to take advantage of it.
As to RCF finding TMT was a dud and joined AVL to bail themselves out, again we could argue to death on that point but it's a done deal now and RCF won't be telling us..
So not even worth the air to go into that one.
We can see how much AVL takes or leaves of what TMT has brought to the table. That can be our hint as to RCF's motivations.
I know previous TMT shareholders would be upset if the ore is the only thing that is kept, but that's the plan they'll need to sell us, so we can only wait and see.
I beleive I kept this pretty neutral and just presented the potentials of what AVL might have purchased on top of the ore. No TMT vs AVL nonsense.
In a few days there will only be one... AVL... the quicker we all accept that, the better it will be for more constructive analysis and discussion.
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