I reread the 26 April announcement regarding the Cooperation Agreement. The FID T&C: "The parties acknowledge their mutual intention to proposeand make a Final Investment Decision (FID) after completionof, among other things, a positive DFS and FEED result andthe execution of financing strategy (incorporating both debtand equity)."
At least we know that the FiD will be made after completion of financing. Question for LT shs is the equity structure applying to ARL's part in raising funds. I truly doubt that the issuance of hundreds of millions of ARL shares to raise funds for capex will be supported by the 70%+ significant shs. Such a form of cr will inevitably dilute their shareholdings by at least 50% and only to the benefit of the BEOT who have not even written any favourable reviews to support ARL all this while. It would actually be an insult to the loyalty of the 70%+ LT shs.
The Funding and Consideration T&C: "The Consortium agrees to fund the DFS Budget and assist inobtaining debt finance for the construction of the KNPGoongarrie Hub project (Project)..."
In past work experiences reading various corporate legalese, I learned that the use of language is very subtle but important. There is a difference between: "...assist in obtaining debt financing..." which suggests some wriggle room for the SPV's inability to obtain said financing, and "...shall obtain debt financing..." which is more exact and rigid in terms of performance expectation.
Regarding the approx. 20% sp increase in the past week, the transaction volume and the ask/bid volume are too low for any meaningful rerating. It seems to me that it was more a personal investment portfolio valuation rebalancing carried out by selling and then buying back. Might even be the right hand selling to the left hand. Realise some capital loss in ARL to offset realised capital gains in property, crypto or other shares. The tax savings on the CGT can be substantial. I used this strategy too when the opportunity arose. One doesn't actually lose any ARL shares because what were sold were then bought back shortly after, meaning it's still the same number of share held. The portfolio valuation got reduced, but the result is deferment of the CGT (the substantial tax savings) into an indeterminate future. In other words, the reduction in portfolio valuation at the applicable tax bracket is the CGT savings. All part of tax planning, which is best not left to the last minute, such as doing a rushed tax job in the month of June.
100 bagger or not? Depends on the starting point, doesn't it? At the theoretical max price of say $11.00, it implies a starting investment sp of 11c. I believe that for the BOD, RED, and other very, very LT shs, their starting investment sp were much lower than 11c. To these patient and loyal shs, it's more like a 200 bagger or so, being 20,000% capital gain. Even those who recently bought in at 40c-50c will easily achieve a 20 bagger. As I'm also relatively recent (only 5 years or so) to the ARL investment, I'm quite happy with my less than 100 bags gain. It's not just the sp increase, it's also the total no. shares held. Those with conviction and spare cash can always consider whether it is to their LT ARL investment advantage to catch up on their no. of bags by topping up when the sp is low, or by doing a portfolio valuation rebalancing.
ARL Price at posting:
45.0¢ Sentiment: None Disclosure: Held
