Maybe I'm reading this wrong but the announcement seems to be hinting that the K-SURE funding could be similar to the conditional commitment put forward by EFA - so I assume this could mean something in the ballpark of another $250m.
This would mean significantly less dilution for QPM shareholders so this is fantastic news (even if the amount is not stated).
So what exactly does this mean for shareholders? Let's take a look at an example. If we assume that the CAPEX in the DFS grows to $1.2 billion (currently $900m in the PFS). Also, assume that prior to this announcement we can get $250m from EFA and $500m from NAIF (perhaps this is too generous?). This would mean we can fund 62.5% of the $1.2b capex with debt which means the remainder must come from equity funding (causing dilution). However, if we add in another $250m from K-SURE this brings debt funding to 83.3% which represents a significant reduction in dilution.
The table below shows what impact this will have on the investment (share price) once we are in production. If we assume that we raise equity at 40c (I would hope we would do it much higher than this - but lets be conservative) and using a PE multiple of x15 (under both scenarios) the company would be valued at $1.89 at the time of production (Mid 2024) with 62.5% debt funding or $2.44 with 83.3% debt funding.
So basically, using these figures/assumptions an additional $250 in debt funding could provide an additional 55c in shareholder value. Don't get too hung up on whether capex will be more or less, or whether NAIF will be more or less. I'm just fixing some variables to show the potential impact.
Please let me know if you think I've gotten any of this wrong.
ALL IMO DYOR.
