Yeah, thats the thing, definitely would feel disappointed if massive dilution would occur. Some guys have been in since IPO and definitely would have had better yield somewhere else. I still want to believe theres something bigger coming in exchange for 35% in 5billion $AU post tax project just for 100mil AU. And 15% for asking loan on our behalf and still have to raise equity. And I want to believe that "chest banging" tight share register. 200mil SOI and top40 investors holding 60%.
What if share price will be 0.5 by the time we'll ? raise equity. It would take us to 1.2 billion SOI. What would company be proud of then - 1.2 billion SOI and top40 hold 10%? Or top1000 hold 60% ?
But Im not throwing gun into bush yet. Lets sail step by step and find out.
Since
@Rewop mention accurately imo that "secure finance" or "equity" might be political expression or cant take directly by meaning.
1) Equity might come from government grants, support, aid or in any other term of help
- 30% is funded by backed aid
- 30% or percentage of that is granted through project support fund
2) Equity might come from Japanese side. I remember somebody shared Japanese international projects fundings in developing countries
@the squash I really appreciate Your interaction here and I highly respect You, but some points I disagree.
Firstly, rest of the offtake and additional projects can be used as leverage, but depends on the financing scheme. If its traditional scheme then this could only bring down interest rate. From whatever point we look, we need to have own capital. Altough I have had loan from bank to my past project fully without own equity but that was like a tear drop in sea compared to Goongarrie hub. If You will, I'd gladly read more detailed view of Yours
Secondly, that article was mainly about pension funds and other institutional investors who'll look to park their money somewhere. We probably wont have any problems getting money from them, but what do they want in exchange ? High chance they want additional shares of ARL. Or if its project based investment into ARL and JC vehicle, then maybe they can leverage 25% by getting loan from institutions or auto makers. Time will tell again.
And lastly You, dear fellow member, who brought out estimated financials and future outlook of ARL ( I forgot Your nickname
). Im not bringing out my estimation because You had a nice table and overview. I just share my POV.
I remember when we were just about to get announcement for partership and predicted SP skyrockets and comes back to 1.3$ and hovers above 1$. Reality was rather opposite. We had recent low of 0.375 $.
Im not saying anything towards Your estimation, instead I highly honor Your opinion and it might play out. Or not
I comment approach in general.
We have had high trust and confidence towards management. They cant actually put investors in risk in such way. Who guarantees that share price for example cant be 0.2$ by the time possible equity raise is on table ? Who guarantees we are not in recession by the time ? Who guarantees nickel price is not 10 000$ a ton ? Who guarantees that investors want to buy additional issued shares ? What if they dont ? Will project then postponed then for uncertain period of time or never be built ? Do JC still own 35% of Goongarrie hub just for 100mil $ ?
Even JC can not possibly take that risk. They know ARL is junior without any cash or cash flow. What if above scenarios play out and ARL cant raise their 30% of equity (or whatever that will be) ? And then JC cant have their critical metal supply from Goongarrie for uncertain period or cant have never.
So IMO theres still a massive risk for both parties. Unless back room decisions are made and theres security to minimize or eliminate these risk. What if theres only minimal works ARL has to take care and need only 50mil for example and thats meant by equity financing ?
If the story that lot of major players negotiated about potential partership with ARL and they praised Japanese, then I still want to believe that they offered a good deal, a deal that ARL benefits from. If above risk scenarios play out then I dont even want to hear how low where other offers. I want to believe that there is something bigger they offer to have share of critical mineral supply to their country in tough and competitive hurdle towards them. After China dominates all the critical mineral supplies and wont stop.
I truly appreciate your views and opinions guys, but we have so much uncertainty atm. We have to take step by step and share each other opinions after important milestones
(20min delay)