Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Ecclescake - I wasn't particularly concerned about the terms of the debt to be honest (perhaps incorrectly), but as you've drawn attention to it I did just check the March quarterly report and it clearly states that interest on the Stage 1 facility is 9.75% p.a. and the full PDF is 9%.
I think that's reasonably clear, but maybe I'm missing something?
The last thing this Bod want on the debt finance finance is clarity, historicaly it's not what they do. If you disgrace please come back with the interest being paid on the current loans. It's oblique as it can possibly be. Best you can hope for is they leave enough value behind for the share price to rise.
Thanks Slurms
I think part of the issue is that it's not crystal clear - the first page of SO4's release mentions the 45c and the second page mentions the 10% discount if there's no equity fund raising, but doesn't mention the 45c.
If we just focus on the first page though (repeated below):
"The Convertible Notes have been structured as deferred equity with zero coupon and
mandatory conversion into equity at the lower of 45c/share or a 5% discount to any future
equity raising of at least A$10m."
To me that doesn't say that the 45c would only apply in the event of there being another equity raise, and it may therefore also apply in the case of there not being a raise.
So my interpretation of the release is that the 45c could apply in any event, although I certainly hope that your interpretation is more accurate!
The reality of course is that it should be crystal clear rather than being capable of different interpretation by different people...
They are spending a lot of cash paying for process plant, but it sounds like debt funding announcement is coming soon. The hope/expectation is that once they are producing SOP and cash is coming in then development of further lakes will not require further dilution.
https://www.youtube.com/watch?v=2k3_ZI5B708
Welcome to the boards Slimbo.
"it's basically just a placing"
Yes, Tony S has said as much on the interviews, the RNS states it was quicker to do than a placing, so no disagreements here with that or the number of pies Middlemass has his fingers in.
" but at a much larger discount than the April one, and to a related party"
Here's where my interpretation differs
The RNS states
'If there is no equity raising for greater than A$10m prior to the maturity date of 30 June 2021 (Maturity Date), then the Convertible Notes will mandatorily convert at 90% of the average of the five lowest daily VWAPs during the 20 days prior to the Maturity Date. '
That means it could be at a 10% discount of the share price in June next year which could / should be much higher.
That's if there isn't another raise ... and well ... I've lost count of the number of times a grinning Tony S has appeared on proactive saying how excited he was to be buying in.
If i've got this wrong please let me know.
Hi All.
First time posting but I've been following this board for a while and have held SO4 for a couple of years or so, increasing my holding significantly in the last few months.
Whilst the convertible note isn't making me question the fundamentals of the business, unfortunately I can't see any positive slant on it, because:
- it's basically just a placing, presumably structured as a convertible loan note for Equatorial's tax purposes, but at a much larger discount than the April one, and to a related party (Middlemas is the Chair of both Salt Lake and Equatorial). The key term is that the conversion price is the lower of the 5% discount and 45c. So all being well they'll convert at 45c, compared to a price of 53c at the time. Worst case is 30c, but hopefully that won't come in to play.
- that suggests they needed the cash really quickly, and whilst the debt process is clearly dragging out, if it was purely a timing issue then a normal convertible loan (rather than the heavily discounted placing this is) would have been fine, with the loan simply being repaid by the final debt package, with a commercial coupon
- the fact they haven't done that suggests (to me) that is's either just a cosy deal to the detriment of most shareholders, or that they're not going to raise as much debt as they initially thought, so there's a genuine funding gap rather than just a timing problem
Either way it's not positive, but it's a small amount in the scheme of things and doesn't change my overall view of the opportunity.
I personally don't like convertable loan as it normally drags the SP down and surprised that they needed more money now. I hope debt funding is still in place and they haven't raised it incase that fails... I hope
GL
SO4 must have broken a record for the amount of capital raisings in a 12 month period. In hindsight they should have raised a lot more, sooner.
https://audioboom.com/posts/7621578-onthemarket-salt-lake-potash-versarien-chris-bailey
Justin asking CEO about funding. It seems that they are burning cash and bank consortium note quite pulled together yet. But sounds like it is coming very soon. 2 of 4 banks on board and the other 2 taking it to their board in the next week or so. The question with debt funding is at what cost and with SLP raising funding from equity funding with ease should help keep the cost of debt funding down. In the long run the convertible placement may turn out to be quite positive.
It sounds like debt funding will be announced in the next few weeks.
New vox podcast (not listened yet) https://audioboom.com/posts/7621578-onthemarket-salt-lake-potash-versarien-chris-bailey
Thanks SM, I think that is my reading of it. Of course that is a dilution in a company that is 10% bigger.
I had a look at equatorial resources and it is a company that is at the present tome trying to build an iron mine in the DRC, Democratic Republic of Congo, but not getting anywhere fast and has A$40 million in cash. It has obviously looked to use this cash elsewhere. Interestingly its shares are sitting at a discount to its cash and now discounted holdings in SLP!
Too many caveats to give you a working whilst on a lunch break, but I think it would fall into a range of 6 - 14%, problem is the strike price (not sure I've used that term correctly) being so variable.
I'm reading it that if everything goes swimmingly then these are at a discount of 10% to the average share price over 5 days in the future (June 2021) and if another raise is needed then the value of them is tied to the price of that raise or the floor.
"A floor price of 30c per Share applies to all conversions."
If that's the case then it would be 50,000,000 divided 353,290,000 shares roughly in issue around 14.15%, but that's the worst case, does that seem right, I'm no accountant.
Anyone understand what these convertible shares mean in terms of dilution effect??