It’s a huge red flag. Chemphys have either been booted or bailed (likely they won’t hold their $4.5M stake).
Galan have now completely departed from their studied approach which took so many years and are trying to press ahead with a completely different approach to what they have promoted for so long.
I didn’t want to say anything before now but the only reason no deal details leaked is because they tried to get at least $25M and there was no demand so they’ve had to scale back to $10M. It took them this long to get a term sheet out because the Petra phone calls didn’t produce the required demand.
Now after all these years and all this dilution they’re not even going to own the processing plant and so the project will be completely at the mercy of a third party (brine ponds are useless without the processing ability).
It is a sad but not unexpected end to what could have been a great project. This for me has become *the* textbook example of how inexperience and arrogance can completely ruin a good resource. It’s no wonder people pay overs for highly esteemed management teams ie Capricorn, Genesis, etc.
Good luck if you hold on from here but I have *never* seen a project succeed when it departs from its baseline studies and tries to fudge its way into construction.
GLN Price at posting:
12.0¢ Sentiment: None Disclosure: Not Held
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