Bit of misinformation in some of the previous posts
Firstly Doc Mike was not employed because he was a debt specialist. He has a Doctorate in Mining Geology, has been successful as a CEO of a mining company, has African experience etc. He was employed to run Morila, not to provide debt. I'm not sure if such comments are a direct slur, or just lack of knowledge.
Next, the only mention of the debt the JV will take on, is Simon's comment in the Webinar where he said they were hoping to finalise the 1st step of US$40m as per the JV agreement. The JV agreement also says Ganfeng to organise a 3rd party $64m facility if the terms are agreeable. Simon hasn't said they won't go past the $40m to $64m or for that matter the $120m Ganfeng (outside the JV agreement) said they'd organise if required. They are just keeping all options open. IMO taking on US$120m debt for a $255m capex project is stretching things a bit far.
Also the drilling, earthworks, tenders for long lead items are a JV expense, shared 50/50. Previous Drilling expenses etc will be reimbursed by the JV. The JV agreement provides for Leo to receive reimbursement for management expenses. For sure they won't be reimbursed expenses for the demerger or general Leo admin. However the salaries of specialists etc Leo have employed to implement the project will be reimbursed.
So many people posting here with the wisdom of hindsight. When we employed Macquarie to look at monetising Goulamina not one poster said we should hold off and wait for better Lithium prices. At the time SP6 was about $400/t many Li mines were on care & maintenance or had cut back production.
As it turns out the development of Goulamina was fast tracked by doing the Ganfeng JV, all of a sudden we are ahead of our peers, AVZ, LTR in terms of development. This is occurring just as Lithium prices are at all time highs. Look at LTR, they raised $450m to finance their project at $1.65, their present SP is $1.28. They offered their SPP at the same price after the placement. Those few shareholders that took up the offer got screwed. On the other hand our management offered us the SPP at 57c before further raising in a placement at 67c putting us shareholders 1st. My point is, dilution is inevitable, either by selling a share (as we did), or a massive cap raise (as LTR did & we did for Morila)
With the Leo IPO, our management did the right thing by shareholders. We were offered 100% of the funds required before anyone else. If that was short we were prioritised to the first $10m in the Shortfall offer.
The take up was actually in line with the last SPP where only 40% took up less than the full amount despite our SP being about 17% above the 57c issue price.
Sorry I have no time for those complaining about Euroz, Canaccord getting to place the remaining $45m shortfall, which they'll easily do. We had our chance.
FFX Price at posting:
96.0¢ Sentiment: Buy Disclosure: Held
