Thank you for your comments. But fellas, please keep your feet on the ground, read my post again, and his time more carefully.
Here is my assessment of the current situation. My opinion and conclusion only, based solely on what we know.
The saga of NRZ consists of two distinct elements, something which seems to be lost to many posters.
The first element is a struggling start up company, earning nothing, and relying solely on regular
CRs and small share placements for its survival, as one would expect.
The second element is the turn key project, the extent of which is not entirely clear to me. It is to be funded by Loans and Share Placements, payable on completion of the project.
How these element will be combined on completion is any bodies guess.
Danharks, with respect to Off-take Agreements having "an equity component, say a 5-10% stake" in the completed project is not unreasonable, but IMO, it will only be forthcoming at Hand-Over, along with other loans and share placements. Customers might very will want a stake in a fertiliser factory. This would probably be welcomed by the BOD.
Now, this is probably where we part company. As I said previously, I believe that any organization offering large funding prior to production would be regarded as a major creditor, and who would want a potentially nervous creditor hovering over NZR. I just don't think it will happen. I would not include prepaid offtake monies in my calculations. Its too risky at this stage. IMO, an offtake agreement is an important financial marketing tool for funding Stage 2 of the project, nothing more.
Given the world situation with respect to urea and other fertilisers, IMO, completion of Stage 2 is a foregone conclusion. It will happen so don't stress over it at this stage, concentrate on keeping NRZ alive because this is where your money is.
tone boy, you question the timeframe for completion "Really, 3 years till production?". I see your point here, but under normal circumstances, two years construction and one year design is not an unreasonable expectation. Have a look and other like-projects around the world. I do not intend to introduce another level of uncertainty to support my argument.
Given the time frame, and no expectation of a large share placement, funding will be slow and gradual, as required.
In the ensuing three years, NRZ will require (3X4), 12 quarters of funding. If quarterly expenditure is $5-10 Million, that's $60-120 million to be spread over this time. I would suggest that this is the best scenario. Its bound to be worse, but by how much who knows.
It will be constant share dilution, maybe with corresponding reduction is share price. If things don't go according to plan, I fear a take-over, and it might not be pretty for shareholders, but a far better solution than insolvency.
That's how I see it at the moment. OK, rip into and then tell me how you think it will all pan out. J L.
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