In a nutshell Ski. Some are getting wound up on the SPP to...

In a nutshell Ski. Some are getting wound up on the SPP to provide cash guarantee etc until equity completed and are not celebrating the huge debt facility or even fully understanding the flexibility ahead.

1. Management are going after a substantial USD713 million in equity - trying to achieve that advised 50-50 split thereabouts. Yet very IMPORTANTLY they are looking to remove a significant 4 layers of debt facility totaling some USD417 million AND the EFA USD200 million standby liquidity facility. The flexibilty is in should they fall short of the ambitious USD713 million target - the backstop is in place with debt facilities locked away.

2. How many actually know how much product remains available - going off their advised quarterly presentation there is a whopping 1530T remaining - that is IF they wish to retain the 20% for spot market - again this where flexibility is there and they may reduce that 20% back to the 15% or even 10% over first 5 years of full production - IF it is going to accommodate that substantial USD713 million they are seeking - each 5% is critical = to 220T particularly given some 2815T is already in advanced offtake discussions with EU and US and a further 1925T is in discussions with Asia and EU - this is why I suggested yesterday US - DOD or a large auto - the possibilities of those are many indeed AND with such want for product as Birch regularly advises and the company presentation clearly advises - there appears quiet a healthy position for substantial equity participation for that remaining 1530T plus perhaps another 5% of 220T.

Yet the simple feature here is flexibility. If they secured the full USD713 million and please forget discussing terms - premiums people and leave it to the very well paid financial brokers engaged - then they have significant dilution of course (for which a share consolidation down the track as Lynas did 10:1 could occur) - however management have removed USD717 million from the debt sheet which would then see debt of around 350-400 USD million - and with a consolidation some 700-800 million SOI and cashflow going to expansions - stage 2 not being swallowed up by debt payments.

FLEXIBILITY people. So lets presume another scenario in which management secure a sensational USD513 million in equity - short of the substantial 713 which is ONLY guidance folks - we could get as little as USD300 million in equity and still make the FID - this is where it sits and how crucial the debt package is and of course the extremely favorable average 12 year term and rates from export import agencies. As little as USD300 million people - then we go to market again in 5 years for stage 2 funding - this sensational debt facility has provided highly favorable FLEXIBILITY that I believe many are not seeing or understanding - listen to Darryl's confidence in saying "we will commence construction immediately on equity - FID".