Possible US/Europe Financing of CLQ Heating Up

https://www.washingtonexaminer.com/policy/energy/daily-on-energy-top-state-official-says-clean-energy-fate-hinges-on-securing-supply-of-metals-and-minerals

The news piece linked above reports on a recent workshop hosted by Francis Fannon, the U.S. assistant secretary of state for energy resources, which discussed some of the challenges faced by the rapidly growing clean energy industry in securing reliable, sustainable and ethical supplies of critical metals and minerals.

Clean TeQ’s wholly-owned Sunrise Nickel-Cobalt-Scandium Project in New South Wales, Australia is one of the largest and most cobalt-rich nickel laterite deposits in the world and is development-ready.

If you look through the history of announcements since the second half of CY2019, everything has pivoted towards US/European financing. I expect both the US and AUS Government to be involved to some extent in the financing of the deal.

Intriguingly, US legislation has passed which allows for US Government financing of critical raw materials for US companies (i.e. Tesla).

Prediction:

• $250m USD equity stake from Tesla
• $200m USD equity stake from one of Ford/VW/BMW/Daimler AG/FCA/PSA
• $100m USD equity stake from BeijingEaspring
• $50m USD equity stake from SpaceX (for Sc)
• $900m USD debt from Societe Generale/NAB/Natixis/ICBC

A combined $300m USD equity offer from Tesla/SpaceX could give them (in theory) access to a life of mine offtake for Sc and a life of mine ~50% offtake for Ni/Co. With the remaining 50% Ni/Co offtake being split between Easpring and another player (17% and 33% respectively using the above figures as an example).

In the above example, CLQ would need to sell 43% of the ownership of the Sunrise project ($600m USD / $1400m USD NPV).

However, if Tesla want close to the full 100% offtake for Co/Ni, which they need to meet their gigafactory demands, they will have to pay up... $300m USD is not going to cut it from Tesla if they want the entire life of mine supply of the Sunrise project. I suspect Robert won't accept any less than $700m USD for a full 100% Ni/Co offtake.

This is set up just like bidding for Voissey's Bay. The two co-chairman together have a 30% blocking stake in the company to prevent hostile takeovers. Beijing Easpring also has a right to convert their 20% Ni/Co offtake from 5 years to a life of mine offtake if they invest equity.

We are set-up for a bidding war, which started June 2019 behind closed doors and is now reaching the final stages.

All will be revealed over the next few months.

I for one am looking forward to the show.

T.E.P.