progress statement, page-3

These are all unknown factors, and in the above post i was debating that there wouldn't be a 50% sale of the project. Therefore entitled to 100% of the revenue.

Also would you like to reference where SDL stated that the project partner would cover SDLs portion of equity funding for the project.

I have designed a little table to help explain my views; here are some rough figures:

ASSUMPTIONS MADE:
$4,000m CAPEX, 2,700m shares currently on offer, 35mtpa production at $100p/t, OPEX of $25p/t, Equity financing at 80cps, interest rate on corporate debt of 15%,tax rate of 30%. THESE ARE ONLY ASSUMPTIONS USE THAT MIGHT CHANGE and would make the follow tables inaccurate.

First table, simple debt/equity - equity raised via capital raising:



Second table, this time with the debt portion of the project being exchanged for 50% of SDLs project. Therefore SDL will be free carried, though will raise 30% of the project in equity via capital raising.



DEBT - means just that, its a debt therefore the idea of giving something up in exchange for debt makes little sense, as it wouldn't be debt. Here is another assumption that we can come to:

Table 3, the 70/30 split now takes into account that 70% will be debt the other 30% will be funded by the strategic partner in exchange for a % of the project.
Lets assume that % is worked out by $1b funded = 20% of project (therefore at 30% equity funding we give away 24% of project to strategic partner)



Table 4, lets try one more thing; Lets give the equity partner 500m shares and only 10% of the project per $1billion financed.




MORAL of the story here is; there are STILL so many underlying factors about these agreements that the board is working on that are unknown, the management team will go over similar type figures and ratios to get the best mix (though in more depth and more detailed HENCE the point of a DFS!!)
The limited information we have been given lets us at best GUESS what might happen, no one KNOWS anything about where and what this company is 'giving away' or 'capital raising'. There are so many things i HAVEN'T even considered in the above that could/might be relevant to the final outcomes.

You will note that the best returns come from 100% debt financing but there is too much risk involved with getting a project financed 100% by debt, some risks include exchange rate, commodities prices among other issues.

Hopefully these tables are of use to some here, to show how many different things can be considered that will change the outcome in the end, and I've used very rough figures and assumptions.

Exciting times ahead, and 3 months from now, we will have a lot more answers and know a lot more about how this project will come to life.