Monark I do take your point though.I have previously mentioned...

Monark I do take your point though.

I have previously mentioned that the greatest way that SKI can assist us (and itself) in this deal is to provide some sort of price underwrite. The off-take agreement is the single most important document in any Project Finance.

AUZ should be negotiating with SKI a commodity price floor, being set at a level which provides Financiers with a minimum level of debt service cover. Then, provided Sconi hits its minimum quantities and costs are managed (both of which are far more within its control), the risk profile which Financiers are banking converges towards SKI's (highly rated) rather than that of the underlying commodity price. 

On the flip side, AUZ could offer a price ceiling. While that would mean that we don't recognize super-profits, there is far greater shareholder value in getting this project off the ground than there is in evaluating for hypothetical scenarios of commodity price booms.

LME remains the underlying pricing mechanism though.

In vanilla Project Finance deals (which this should be), Financiers only really care about protecting their downside (hence my previous comment about a 15% IR being easily bankable and somewhat irrelevant). If SKI were to agree to a price floor which at least mitigates the commodity price risk, Financiers would be able to provide substantially higher gearing than without the floor.