i always find it helpful to cut n paste and reduce this stuff to...

i always find it helpful to cut n paste and reduce this stuff to understand it better.

Reset off take extensions are (give or take) 23 July for VINSOM and 8 September for GUNVOR, therfor inside Q3. So the removal of this stage and its timetabling is reliable.

My observations include;

to complete the FEED you must have your site settled on or you dont know your construction site. Also EIS must be granted to enable fixed costings. So FEED while a stage in itself in reality invludes completion of EIS and aggreement on construction site

To enter into a binding aggreement to purchase the site and start turning dirt at the mine TNG will have cirtainty on future finance or have made a placement perhaps. I doubt current funds could cover ongoing expences together with an unconditional site purchase, unless covered by NAIF or some Govt fascility. As SMS is completing the FEED and tender process together there will also be binding tender documents in the background creating aditional financial obligations if breached.

SMS are offering product and production guarantees in reality to provide debt finance confidence. The guatantees are offered with the FEED and tender process as costings are nailed down. So all of this is really tightly linked to the grant of debt finance. KfW have given strong signals that the current BFS is bankable and a positive outcome all but cirtain. In my mind the completing of the FEED strongly indicates finance is on track

The same can be said for the equity raise and debt raise. No one would make an equity contridition unless debt finance is a given and vica versa.

At the point when debt and equity finance is a announced (or soon after) the MC should be in the $500 mill arena.

So while the stages are logically seperate milestones there is huge overlap and later milestones like finance may be well advanced or near conclusion but waiting for earlier milestones to be concluded, like FEED, EIS and site aggreement. (Long winded route to here, sorry)

Also at what point is some update regarding the NAIF submission due, does it come in the debt funding stage or do we see a market teaser early announcing a conditional facility?

The big question (which is probably rhetorical), at what point does the market see a green light? This is fundamental to the SP at the point of equity raise. If the market doesnt see a done deal till the deal us done we will be swamped with dilution.

The earlier modelling at 70/30 ratio and at 15 cents saw an issue ($270 to $300 mill equirty contribution) saw an issue of 1.8 bill shares taking the total shares on issue post finance to c 2.8 bill shares. The reality is that on a concluded FEED couple with the binding guarantees from SMS the project is a given and the SP should be way north of 5 cents, 15 cents or even 25 cents. A SP of 25 cents pre equity raise (MC of c$300 mill ) would see the equity dilution reducted to the issue of 1.2 bill shares but at current SP it would require the issue of 6 bill shares.

The market needs to get a clear message that it is stage A, FEED and Tender conclusion, that is a strong signal that the finish line is in sight. To me this is fundamental to a re rate pre finance

Im all for performance incentives. I would hope that there be no issues untill after all the stages including the MC provision is met.


Just my thoughts. Would be good to hear others views.