Well articulated post Aaron. I agree with most of it but you are overplaying the DD status in your paragraph 3.
The DD is an on-going process - with major hurdles still to get over before the deal is confirmed.
Most importantly, the suitability of the sulphates and the securing of development capital by 31 December 2018 (with the latter being dependent upon a satisfactory BFS).
SK is clearly hedging in case AUZ can't deliver in terms of BOTH quality and timeliness.
So 3 critical hurdles before the SK deal can be truly celebrated:
1. Appropriate quality product - both cobalt and nickel
2. BFS that demonstrates that Sconi can deliver the quantity of product required by SKI and that it can do it profitably (i.e. with an appropriate IRR)
3. Securing of development capital by 31 December
Clearly, still high risk until those hurdles are cleared. But I like their chances.
AUZ Price at posting:
10.5¢ Sentiment: Buy Disclosure: Held
(20min delay)