some clarifications

Firstly for the S/P to increase 18% on a day when the market went down 0.5% is good.
But will it last , you say ?

Well, this is my understanding of the Announcement.

1. The capital injection is to LNC from the issue of new shares at a min of AUD 4.50. So that benefits LNC's cash position which is very important at this time (2012).

2.LNC had 505.8 M shares on issue as at 30/12/11. Since then they have bought back 250,000 and issued 1 M. Check the ANN's this year. So they have 506.6 M approx NOT 600M as one poster stated.

3. Other posters stated that it won't proceed and quoted examples outside China. But this is inside China, they have plenty of coal and are crying out for the end products that are needed urgently. I'm sure I read recently where China will sell 10M cars this year. So my view is that legal binding agreements will be finalised by June 2012. This will then be when the first tranche of $60M will come to LNC for 2.5% of new shares.

4. The commissioning of the initial 4 gassifers could easily be completed within 6 months provided suitable site selection has already been commenced. That would trigger the second tranche of 2.5% new shares. If the LNC S/P was $4.00 at this time, then the issue price would be 130% of $4.00- ie $5.20 or approx $73M. But in any case it woud be a min $60M. These milestones will undoubtedly propel the S/P much higher.

5. Down the track when the GTL plant is to be funded, there will be minimal direct capital cost to LNC, which has been a big hurdle to date. So as another poster stated, 33% of something is better than 50% or 100% of nothing.

6. Once this is proven commercially (not forgetting that LNC has an excellent environmental record),potential joint venture partners from around the world will be queing from LNC's door in Edward St to Chinchilla.