Sunrise...Financing the Mine

We need another CLQ thread like we need another ice cream flavor from Ben and Jerry's, but since my speculations on the subject of mine finaance will be confirmed or rebutted by company announcements soon (hopefully by end of June),
not too much harm is done by it.

I have already stuck my neck out by saying the project finance will be mostly debt, not equity; that there will not be a painful dilution that negatively impacts the stock price, although I allow for the likely possibility that project equity
will be placed with a strategic partner. This should not be terribly detrimental to the SP, because the additional stock will stay with the strategic partner and not be sold on the open market.

The math is, that they raised $150 mil cash from the CR, and they have a couple of hundred million in sunk equity in the project, call it $250 mil (counts as equity in a bank loan calculation), and the MLA's already made "indicative commitments" for $500 million.

That is $900 million. Let us allow for a really high capex of $1.5 billion. That leaves $600 million to be raised.

The possibilties I can think of are:

1. Equity to a strategic partner; I would guess $200-300 million. More is too much, less is not important enough.
2. Calling up the 4 MLA's to get more than the original $125 each.
3. Taking a payment for future offtake, like a streaming deal.
4. Straight bank debt. Secured by something....though the banks don't want to foreclose on a mine,
the last thing they want to do is run a mine. Also a credit revolver could come in handy.
5. Going to Uncle Bo and Uncle Jiang's piggy bank. They both have large piggy banks.
6. Funny Financing

What is Funny Financing ?

I don't know, but I would not be surprised to see some.

Remember what a "bond" is ?

Maybe some of you have even heard of "convertible bonds".

There are other old-fashioned,out-of-favor debt instruments that might see resurrection. Interest rates are still on the low side. Maybe an 8% corporate bond convertible to stock would have appeal.

Bob has had a lot of time to brainstorm with the bankers, and he doesn't like dilution any more than we do.

I say, no dilution (strategic partners excluded), mostly bank debt, and something interesting we are not used to seeing.