Decision makers are held accountable for the decisions they make.
And not having all the information at their disposal makes it impossible to make an informed decision.
There is NO WAY that X would OK a project without all the questions being answered. This legal challenge, whilst likely to be thrown out again, hasn't actually been thrown out yet. If it was a mere formality (being thrown out, that is), then maybe the decision would be made already in favour of NKP some time ago.
I put it this way, would you buy a house without knowing it was going to be free from encumbrances upon settlement? I think not.
Financially, all sorts of scenarios would be run on the economics of the project. Garatau only, G + T, G + T minus the 2 farms under challenge, high capex, low capex. The list can be endless. But dont forget that based on current knowledge, X is to stump up 100% capex for 50% output. As the capex becomes less, this deal becomes sweeter and sweeter to X.
Just to add also, NKP are paying for an external firm to provide consulting advice. Such advice would be considered specific advice which NKP (and X) would likely make their decision on. Therefore any incorrect advice would likely result in a significant law suit.
No-one wants to make the wrong decision no matter how obvious it may be to the casual observer. X included. There is due process to go thru in large companies. Merely whacking in a capex proposal to management showing a couple of years payback doesn't cut it nowadays.
It is impossoble to know what is going on really, but balance of probablilities, to me, suggests that the optimisation outcomes are only going to come thru after the court case decision is handed down.
It is very easy for NKP to say (on the side) to SRK to "hand down the decision only when I say so".
A favourable court decision de-risks the projects further and paves the way for the release of the BFS.
Knowledge = de-risking = re-rating. Which in theory means NKP might ask for a better deal. But that is pure speculation.
NKP Price at posting:
57.0¢ Sentiment: Hold Disclosure: Held
