I think the comment around sharing risk is around setting a...

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riseabove

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19/03/24

08:06

Post #: 72952170
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Originally posted by TenX: ↑

My initial email to him was based around the ARU news, receiving government support via finance....which in turn captured the opportunity for a further US$550m via senior debt facilities, highlighting their managment approach/belief that debt is cheaper/better than equity.

In that email I raised my concern for the previously announced POSCO update stating the potential of issuing equity to them at 10c.
DC has mentioned previously that any equity investment done would be strategic, but my view is that raising any equity instead of debt is not in holders best interest.

So the focus of our email exchange was on debt vs equity for finance requirements.
DC made the sharing risk comment in a sentence where he points out that there is 'risk with taking on debt in this volatile pricing environment' hence I read that as his answer to why we shouldn't be taking on too much debt and be issuing shares to raise capital.

Perhaps I have misread his intention??? I am open to that, and in fact hope that I have.

After all, he is a lawyer so he is always VERY careful how he answers questions I have found.

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I think the comment around sharing risk is around setting a floor/ceiling to the agreed offtake price IMO. Similar to what PLL have achieved with concentrate pricing in their offtake with Tesla. This removes the volatility risk DC is referring to in the email.

Last edited by riseabove: 19/03/24

RNU Price at posting: 8.2¢ Sentiment: Buy Disclosure: Held
10 Upvote

3 Great analysis

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