Don't forget that they can only draw down whatever portion of...

Don't forget that they can only draw down whatever portion of the $40 mil that can be appropriately securatised by the project they purchase.

So they go of and find a coal field (value $40mil) that somehow everyone else has missed even though its going for half of what its worth. So they get it for 20

Sterling is likely only to accept the $20mil purchase price and then apply a commercial LVR (Lending Value Ratio). I doubt they would get more than a 60% LVR and that would be subject to them finding the other funds to complete the transaction and the cash to cover at least an initial BFS and appropriate working capital.

So They can borrow 12 of the 20 and will still have to find say another 6 or so to support the business through initial development. So out of 26 they can still only borrow 12

Ther are other scenarios both worse and better that I can think of when I try to attribute a value to the Sterling facility, so the best thing is to ignore it for the time being because it is all about the asset.

If they find a good enough asset they wont need the facility. The Market will throw money at them

An opinion only, and remember opinions are like a#@ h$#*s, ebery body has one.

Viney