Hey HC, As usual, dyor, this is not investment advice. The...

Hey HC,

As usual, dyor, this is not investment advice. The following is likely based on incomplete and outdated information, as well as unreliable sources. New thread necessary for another A+ headline.

I’ve debated internally this week whether to share this but feel it’s worthwhile for discussion purposes. There’s some good and some potentially not-so-good.

The good

I understand the Qld Govt funding/transmission deal is now finalised, pending the signing of documentation by Genex and, more importantly, our soon to be announced JV partner. This isn't a surprise, but a nice box to have potentially ticked.

Q3 K2H fin close is a real possibility if I’m correct on the transmission.

Our JV is moving. There are linkages between the JV and our capital raising/SPP. Late August was always a tentative date – but I believe the slight 'delay' here is owed to the delayed SPP. I also believe there is a hesitance/inability to announce too much prior to the Sep 18 EGM. This is rather understandable, given the egg on faces of NAIF, Qld Govt, ARENA, & our JV partner if they make announcements and shareholders vote against the J-POWER investment.

We’re talking to Como off-take partners already for a percentage of output. Similar to JML I think we’ll cover loans.

The not-so-good

We’re targeting Q3, and we’re odd’s on to close the project in the weeks following the Shareholder vote on Sep 18. However, there are externalities (FIRB etc.) that could mean a financial-close bump to Q4. FC could take place before Oct 5 or after Oct 31 st, 2020, due to the caretaker period required by QLD State elections. The only condition precedent remaining at this point will be NAIF executing the paperwork with the Qld Government. EA & J-POWER are configured to Dec 31, so it’s an update to Powerlink, NAIF, and EPC's. I believe the core contractors would amend agreements to 2050 if we asked, so there’s little concern there. It’s a lucrative contract they’ve won. NAIF advertised K2H today in their 2020-2021 Corporate Plan released today – we are indeed transformational - and all parties are understanding of the exceptional circumstances this year has brought.

There are no surprises in the above. We’ve got everyone working on our clock, but it’s a big ask. On the plus side, if we do encounter a delay to Q4…we’ll be holding a firm hand with the transmission line and JV K2H partner documentation executed which makes the final stretch a relatively simple affair and far less stressful, I’d imagine. Additionally, the majority of construction is scheduled to commence next year, so the impact from a project delivery perspective is minor, if at all.

Again, we’re above even odds to close in September. The transmission line was considered the significant condition precedent and I understand the conditions to be agreed.

Morgans

For those interested in educated price crystal-balling. The latest Morgan’s report is out (to clients). Little new...their base case is lowered 1c to $0.36 but increased bull valuation to $0.72 (+15c) as they’ve anticipated revenue from Como(s) to reduce the need for later K2S/K2W dilution.

I hope the above assists in processing news/lack of news, especially for newer holders.

Regards,
Jeremy