If you cut back the equity raise by $30-$40m by giving 2000...

If you cut back the equity raise by $30-$40m by giving 2000 tonnes of below market price product to Mitsubishi you've also got to find the opex for the first two years, which works out at $24m for 2000 tones of product and you're also not making any profits till year 5 (including build time). So you're getting $16m at the expense of the margin above $20, which at the baseline level of $27 is $14m. This is a much higher cost raise for the business and reduces the attractiveness of return over the 5 year horizon for the rest of the capital raise. Yes the capital raise will dilute your shareholder value, but i wouldn't expect iggy to be destroying shareholder value just to not get funds from the capital market (i.e if he locked in a price at $30 a tonne for the first 4 operational years then it may be a good option to securitise that cashflow (I can't see why Mitsubishi would essentially help the shareholders make a capital gain at a cost to a them by paying up front) with the company getting something like a $27 a tone upfront through a third party that may be ok. Fear and greed seem to be a common theme in HC; while it would be nice for a white knight to bring in $100m and accept 100m shares, you've gotta remember that in reality the only way we're getting that $100m is as shareholders either we need to inject that as a capital raise or they need a third party to come in and then they have a much higher bargaining chip. If current and potential shareholders bid the price to 30c-40c and then injected fresh capital into the company at a 1-1 offer we'd have the capital for the project and everyone would then be sitting on an equivalent share of 6c of FCF per share this would be the best outcome for all of us relatively small holders on HC. But as we don't have the power to push it up our risk of trading capital (we're the secondary market, ATC is only helped by the ability to raise more funds at higher prices for less dilution) is that a big fish is going to get us over the line to $100m US. My main point, if we're more IB minded, we'd know what the next plays are and base our current investment position on the likelihood of each, and a Mitsubishi offtake agreement is potentially going to have more devil in the detail than an equity raising would. My optimistic hope is that it gets bid to a high enough value that a internal 1-1 equity raise would get the cash, and as an individual holder then I'd certainly be on board for injecting capital for that. More likely would be an initial capital raise through current and sophisticated investors. Why? Because if they did only a funding run on current investors and fell materially short then outsiders know they have all the cards against current shareholders. If however they asked their big shareholders how much they'd put in (remember SMS have now preliminary indicated they'd put in $10m US at a price to be set later, melewar could do a preliminary indication of more or the same) and then go to market with a capital raise offer whereby it waterfalls from all current shareholders injecting cash at a fixed rate and potential shareholders filling the gap based on their best offers for hopefully a relatively small (I.e less than 40m USD) amount. This is still optimistic but the positioning doesn't suggest this as unlikely. If we rely on just outsiders then I think anything up to 1b share dilution will get it done (they'd be buying a guaranteed 26m cash flow at 1b, 11m at 200m shares). Of these the last option provides the smallest long term value to current holders (which I still estimate would put the shareholder price at 35c) so I'm not worried about now, but if we can create demand through capital raise by increased likelihood of more money from internally then we're more likely to make more capital gains as current shareholders. We're in the political/positioning/demand position of the project, and confidence in the share price is the best way to achieve value to current shareholders. buying into fear of dilution by having a subdued share price will almost certainly make that the most likely outcome (which is simply the least good of the value accretive alternatives). Big fish have bought in now (the other sophisticated investors who we don't know at the recent capital raise) and may sell into buying prices in an effort to position the latter option, but concerted effort will certainly break through that and see the best option for all current holders.