New Moonie never quite felt 'real' to me - it came completely out of the blue only in late November, the fund itself is a bit of a cipher, and the delay stretched too credibility - "early December" turned to "mid February at the latest" turned to "in March" turned to "we cannot wait any longer". Although I must say, ever the optimist I held out hope that they would come through with the money. It would have been better for GSL to hold off from an announcement until funding was in place.
"All eggs in one basket" is not totally fair though. ARENA (AUD $6 m), CRC-P (AUD $2.5 m) and Apolo (AUD $1.1 m) grants have been awarded. Tranche 1 of the Tasnee convertible notes funding (AUD $600 k) will come through on 31 March 2018. There are a few Victorian Government grants that may have been in the works for some time (Future Industries Manufacturing Program up to AUD $500 k, New Energy Jobs Fund up to AUD $1 m). CSIRO's interest was raised and explored around the same time that New Moonie came up (late November 2017) - it was not the case that a further CSIRO investment was explored only after New Moonie fell through. It's not even clear if New Moonie will never come through with the funding. RC noted that the subscription agreement with them was 'binding'. The CBA facilities have been crucial and were certainly evidence of at least some financial risk management. Finally, that old white whale of Turkey (with a significant government grant attached) is apparently still in play, although we'll all believe that when we see it.
It's more an issue of cash flow, isn't it? Most of the grant funding hasn't come through in time to add to the bottom line of the HY2018 report. The grants are awarded incrementally, and only $AUD 1.27 m of the above newly awarded grants were received in H1FY2018. Tranches 1 and 2 of the Tasnee funding (each tranche = $600 k) should come through in H2FY2018 (i.e. on 31 March and 29 June). CSIRO and VicGov funding yet to be determined, but possibly good. Turkey still to be determined - let's assume nothing from that for now. It doesn't help that we've apparently ordered a bunch of capital equipment, but then again, I'm also glad that we're literally going for broke with getting the prototype facility up and running - that progress will make us look like a better, not worse, prospect for new investors.
Happy to consider countervailing views, particularly in terms of how all of the above fits with the costs side of things.
Stay sunny
TriOptimum
GSL Price at posting:
17.0¢ Sentiment: Hold Disclosure: Held
