TNG Pros Vs Cons - Feel free to add to consolidate, page-24

Mr P,

Agree with much of your analysis...but will still be surprised if the ultimate dilution goes beyond the 30-40% range.

Maybe the curveball here is the ongoing corporate structure?

Let's for a moment strategise & assume that the TNG corporate entity is devolved, viz.

1. We create a production arm (Mt Peake mining)
2. We create a technology arm (SMS / TNG-Tivan)

The production arm effectively reflects what we know & is detailed in the DFS...known resource + significant upgrade potential ie. 500-700m tons in lieu current 160m ton JORC. Peake capex cost is known at approx $300m. In many respects this is derisked except for permits, EIS, 100 year water management.
Funding may include share dilution; Govts; key contractor commitments ie debt & equipment funding; stake in the business etc.

The technology arm is a different beast. It's included in the DFS in part, the biggest impact being Capex of approx $600m...but nowhere is there any projection of potential revenue thru globally disruptive technology.
Funding for the Tech Arm in some respects may have tech focused/debt funding (German Exim: OZGovt: Instos...rather than straight share dilution. ROI for the new business in the first 4-6 years may feature prominently in this financing structure?
This will be an amazing first mover advantage for the Tech Arm...(big problem for the competitors as they can't copy the IP & will have to pay a premium to use it or their cost of production will be shot to pieces very quickly.
Having established & proven Tech Arm techology, will then go to stage 2 & introduce vertical integration/elaborate manufacturing. Now we have the real deal.
Its value will go way beyond the Production Arm...& I suspect it's Corporate structure might be reflective of the Aussie/German enterprise.

Just gotta workout how to best structure the whole shooting match (hello Gresham). No doubt it will be complex.

Suspect that these strategies would have been on the agenda for a couple of years in that skinny TNG Boardroom?

BTW, looks like we have played similar cards this week. I sold down 20% of my CXO stake to recover my initial investment then reinvested this in TNG. Now have a nice free carry in CXO.

hope you enjoy the R32.

Cheers,

Jvest