As instos flock to LRV and a re-rate is in progress, thought it...

As instos flock to LRV and a re-rate is in progress, thought it appropriate to have a thread to discuss funding options for Hillgrove.


Here’s what I posted on the other thread. Write your alternative or recommendation, reaction or over-reaction on this thread. No politics please

@kevin103
Here’s my dream scenarios. I believe it’s not just a dream.  I’d like to think Ron and his team might already be considering something like this. It evades the usual dilutive route of several CR’s. We need to think beyond 3 months but rather LRV’s 5 year trajectory.

The requirement imo:  $75m restart capex + $25m drilling budget + $100m working capital to ramp up = $200m all up


Structure:
1- $100m, obtain as prepayment for Offtake
2- $100m, obtain as debt with option as convertible note priced at $2/share** - this is similar to the LGES funding $380m that LTR negotiated, which was based on $1.80/share when the sp was 90c

it’s a matter of demonstrating value and proof of solid project execution and/or mre upgrade

In the above precedent, LG didn’t pluck the $1.80 out of thin air but did a valuation, and LGES valued LTR at $4.3b hence the terms of conversion at $1.80/share. Thats less than half of PLS mcap at that time and I reckon they think its good value, looking at 3-5 year horizon. They even extended their Offtake beyond the initial 5 years.


I’m just citing the above template of what could happen here.

**LRV should be valued on its own merits eg $400m rather than  the pathetic 44 cents closing price today or less than 1/5 of PPTA and SXG. $400m is not extravagant, the PFS with lower spot price scenario already has $383m NPV and 1 year payback. Incredible IRR


Yeap, it’s okay to dream, it’s doable. Sb is even more critical than lithium now given the reduced supply, increased demand for solar panels, and export ban by China effective 15-9-24.



All imo