Sunrise...Financing the Mine, page-2

More Groundless and Unjustified Speculation on Finance

Just thinking out loud, some trial numbers that could work

$300 mil...sunk equity, Bob's accountants will justify the number
$50 mil...remaining cash after forecasted outlays
$500 mil...already "indicatively committed" by the MLAs
$250 mil...take-off/stream deals, or JV cash in
$100 mil..Bob and JZB pony up $50 mil additional each to make the banks comfy.

That is $1.2 billion. I would think that Bob can lean on the MLA's for some more, plus they ought to be able to get a revolving credit facility for a cushion. I really expect the capex to be around $1.2 but it could be nasty and come in higher. How the heck would I know ?

The sunk equity and cash on hand give a big equity cushion to the debt instruments. Bankers like that.

Bottom line, I see no problems.
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The Funny Finance could be in the MLA instruments. Bob has had since November to run ideas by the MLA'S, who in turn have talked to their clients to test their reaction to different financial instruments.

---"How did they react to stock with a lock-up and a warrant ?"

"They'll go for it, but the stock has to be at X and the warrant at Y."

---"How about a bond at 8% convertible to stock ?"

"They were licking their chops, nobody can get decent yields these days. Depends on the convert price and the collateral.
The nickel sulfate might have to have a lien on it."

---"What about you guys ?"

"If we can be sure of Z %, we'll buy X million for the house."
**


Whatever the debt instruments are, they will be snapped up.

Uncle Bob has been working on it.