"How Will they Fund Dorado Development"I am interested in the better informed opinion on HC, but I will document my initial thoughts.
FID due mid-2022. Funding needs to be in place (or at least "in principle") to take FID.
How Much?Cost is USD$2B; CVN share USD$400M or AUD$555.
They have some cash AUD$90M, but they need to fund drilling (Parvo; Apus; Other?), running the business until Dorado cashflow in 2025(?).
That may leave USD$40M cash for Dorado.
They need to fund at least USD$360M.
My back of the envelope guesstimate of finance would be in the order of USD$250M (2C at USD$8)
That translates to an additional USD$110M or AUD$150M
Options- raise new capital (placement, rights, SPP). Placement plus SPP would be my guess.
- and/or partial sell down of Dorado
- other?
When will they do a Capital Raise if that is part of the mix?They have 3 options
- Prior to Apus and Parvo result. Most sizzle to attract new money. Most likely, or least the most prudent.
- After Apus (the most sizzle; largest 2C (net 40 and risked 17.6); lowest COS at 23%; and before Parvo smaller 2c net 19, risked 10.3, COS 34%. Some sizzle, but share price will be higher or lower to reflect Apus result. Roll the once dice. Unlikely IMO, but possible.
- After both results are known. Unlikely due to risk of two dusters being just over 50%.
At What Price in the pre-Apus Parvo case (the most likely IMO - but I have been wrong many times before).It would have to be at at least a 10% discount to the prevailing price.
That would translate to around $0.24 based on current price. If the share price kicks higher in the coming days, it could be a bit higher, but for this exercise, I will use $0.24.
To raise the above "guesstimated" AUD$150m would result in an additional 625m shares (approximately 40% of current shares on issue, and approximately 28.5% of shares on issue after placement).
My Guess!Placement and SPP of 625m shares at $0.24 to raise AUD$150M/USD$110M, and USD$250 finance.
I am very interested in the views of others.
My sentiment is "Wait" (for funding clarity) rather than "None".
Even filled out a Buy Order on Friday at $0.25
, but didn't submit - too far out of the money
(20min delay)