Finance is the only thing that matters, page-11

We will have to wait and see how the next few months eventuate.

If we park the known risk (EXIM falling through) and just speculate on SP, you can only speculate on the initial equity buy in.

The equity partner will need to buy in based on an assumed Zinc price in the future and calculate what is the best buy in point. Obvious the best buy in would be the current market SP, however, for IBG they would want a multiple as EXIM is the leverage they are bringing.

Therefore, I think the initial buy in for the equity partner would be to use the BFS valuation for potential MC. They would then take their own assumption of risk in the project to calculate a discount.

IBG will need to calculate the % they want to give up and counter with what they think the current value project is.

Basically, I would estimate that discussion would be between the BFS NPV at x% value and IBG current valuation.

Obviously, this is 100% speculation, but I suspect the big influence will be EXIM and if IBG will present 100% or another % debt financing for the project. The costs of the project would be a major concern for an equity partner, especially in a high inflation environment. So if I was them, I would push for 100% of the debt financing. If anything goes wrong with the construction etc and costs spiral, they will be able to buy out the project and restructure at a discount.

However, the higher the debt % the lower the offer will be. So for IBG this is difficult calculation. I am not sure they can go to the markets to raise more capital with issuance of more shares to make up the difference. Further share dilution would not be great. Though they will need to raise more capital up until production.

For me, this leads to 2 conclusions, firstly, you can sell out 100% and allow a take over. This might be overly optimistic or pessimistic for others. It is will be dependent on the type of equity partner (ie mining firm or other) though. If you are an established mining operations, it might be easier to execute a virgin mine from a junior?

The second option, is to restructure IBG. The could either refloat or re-structure into a new company. If you were Bacchus, this would be a real incentive, as you are already a share holder plus you would earn banking fees from any restructuring. So they win from both ends. This would help to raise additional capital on the UK market (see examples below).

For us retail investors, this is not the most "optimum" outcome. However, it seems to be the most realistic outcome given the situation. Blue Jay Mining is an interesting comparison, higher MC but less progressed than us.

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