Sorry for the terse statement fellows,but I was just too damned tired. I am trying to gauge investor sentiment to have a punt at establishing an entry level. I cop a fair bit of shite from time to time, and sometimes it tests my enthusiasm to put ideas for debate. I do not hate this stock, I believe in its success, but am apprehensive about fair value.
So, here goes. I have based my analysis on the last 5B, the two interviews, and the analysist’s report which was commissioned by and promoted by LCK.
“Given new hires and a step up in workassociated with Stage 1 and Stage 2 progression we have assumed corporatecosts will move up to ~A$10m in the medium term.”
$2.5 million perQuarter (Currently $2.077 Million)
“We forecast ~A$25m will be requiredto fund a number of gasification wells, associated production plant and thepurchase of a small power plant (up to 5 Megawatt (MW)) to demonstrate projectproof of concept.”
Stage 1 along with Off-takes to becompleted by end of year. (Interview)
The $25.0 million will be requiredwell in advance of Christmas. Tapping Off-take advances will not be available before Agreements signed. Timing unsure.
“We estimate that for a scope of worklike this, the engineering company will typically be paid ~1.5% - 2.0% of theforecast project cost. Based on a forecast LCEP construction capitalexpenditure number of A$2.25b, this equates to
A$34m – A$45m. This would likely besplit:
15% on signing (A$5m – A$7m),FY22” (say $6.00 million atsigning HOA)
Total expenditure by, say, November2021 estimated at:
$2.5X2 million +$25.0 million +$6.0 million = $36 million
On a linear scale this would be $18.0million per Quarter, but in reality Quarter 3 expenditure would be greater thanQuarter 4 because of initial HoA fees.At30 June 2021 we will have approx. ($7.599 - $2.077) = $5.5 million excluding any extra costs.
Appendix 5B – 30 March 2021 we haveapprox. $7.599million (including first tranche of approx. $6.0 million)We now potentially have $5.5 m +($12.0 million i.e. tranches 2 and 3) = $17.50 million to be partially achievedbefore end of June.
This $17.50 million will struggle toget us to end of Quarter 3. Extra funding (CR??) will be required or insolvency.A bit **bled but I have dashed it up ina hurry, and mainly from memory. Please scrutinise it carefully for defects. J L.
