While the analysis is quality, it is still big 'guesses' (dont...

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Tassy3

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26/04/24

00:14

Post #: 73514565
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Originally posted by nkat2007: ↑

Thanks for the breakdown of the loan @djm3001. Agree it's expensive, especially if it is fully drawn down and extended beyond 4 month term. Then again finance is not cheap across the board with interest rates where they are atm.

So yes, it could be a "hail mary" loan, but also looking at flipside, why is it set at only 4 months? PC and Asimwe must be confident that they will be receiving some grant funds in this period. And if that's the case, loan facility could be wound down with a small cost, yet without significant dilution to SH and no capital raise (which many have been predicting).

So the downside is, there's no grant funding arriving whatsoever and the loan is extended, and along with it the fees/expenses increasing and the issuing of additional options (which ultimately results is dilution if exercised).

But there is surely upside too, because one would think of the A$150million sought across 4 grant options there would be a likelihood of partial success in these applications... Which makes a $1m loan with some fees attached not look so significant in the scheme of things.

My take on the probabilities are set out below.

1. ZG funding - seeking EUD$2.4mill ($~AUD 3.9mill). Expected timeframe June - July. Likelihood 75+%
Not a large ask in terms of dollar value but significant to Volt. ZG declared a strategic asset by Europe so I see this one coming through.

2. VEM concept paper submission USD$1m ( AUD $1.53m). Expected timeframe - June - July Likelihood 75+%.
Again not a large ask and seems probable that uncle Sam will be happy to hand out some reimbursement for submissions which have been shortlisted to go into the application pool.

3. VEM submission for US Anode Plant USD$100m (AUD $153m). Expected timeframe Aug - Sep. Likelihood 50%. The amount received will have a dependency on whether Volt manage to a) sign an offtake with OEM / Battery maker and b) get Bunyu funding committed up before this decision. With Bunyu funding probabilities increase materially. Without, I'd suggest there's a chance of winning a slice of the pie, but could be reduced to 25%-50% of the ask. e.g. $USD 25m - 50m.

4. VEM submission for multi-mill program on graphite processing. Amount not known and appears to be WIP so no view on this one as yet.

So 4 possible outcomes:
- Zero case: No funding received from any application
- Low : funding received for Grants 1 and 2 - circa AUD$5.5m
- Medium: funding received for Grants 1 and 2 - circa ADU$5.5m, partial funding from Grant 3 circa $USD40m / AUD$60m. total ~AUD$65.5m
- High: funding received across all Grant applications in full. AUD$150m

Thoughts?

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While the analysis is quality, it is still big 'guesses' (dont take wrong way), none of us have sufficient details to predict risk or probability leading to outcomes, which equals unknown unknown outcomes .....fingers crossed outcome is good, but reality and in current climate maybe disappointing for many...... time will tell is my 'guess'

VRC Price at posting: 0.6¢ Sentiment: None Disclosure: Held
1 Upvote

0 Great analysis

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