It wasn't a financing it was an scrip acquisition. Very...

It wasn't a financing it was an scrip acquisition. Very different level of DD involved and much less onerous.

A convertible issuance can be done in a matter of weeks. A financing takes 6+ months. Prepayments typically shorter but not in this scenario where the prepay financier wants certainty the project will be fully funded to completion and repay the prepayment in 2-3 years. In there lies the problem, at current prices a prepayment isn't a silver bullet and leaves a funding gap which needs to be bridged by equity or subordinated debt.

Whether it's equity, high yield / mezz / subordinated debt, prepay, they all want the same thing, certainty the project will be fully funded before they part with their cash. That is where I think this has unravelled somewhat. You've got multiple sources of funding who all need to be on the same page.

As far as Chinese options go, it may work but don't expect them to be the white night, in my experience any funding from China will be onerous, especially where you are negotiating from a position of weakness. This may mean lower payability against LC prices vs what JP was mentioning [70%]. If it's significantly below 70% of lc price then they start really biting into their margins and at c.5.5ktpa lce it doesn't really have a lot of wriggle room.

The carrot they would need to dangle is first right to s2 which is much more meaningful but for that they need additional permits. Perhaps that is what they are waiting for.

Otherwise it may be a partial / meaningful sell down in the project with the obligation for someone else to stump up the remaining capex.

Lots to scratch ones head about. Fingers and toes crossed for a positive outcome otherwise it's tools down and survival mode for a couple of years.

Aimo