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Makes sense to me metal. Time will tell
Hi DRB. Just catching up. I agree with your post and your four options. However, I suspect in reality we’ll get a combination of 1, 3 and 4 (if we don’t get 2). I can’t see any reason why a large enough buyer wouldn’t be prepared to make some payment in advance in exchange for preferential rates later. Probably not $30m though. I think a secured loan for the whole amount is realistic, if necessary, but would probably easier to raise if not the only source of funding. A placing for $30m would be hard but I think a smaller placing is likely (and to be welcomed as it’s likely cheaper for all of us than the other options and given the context shouldn’t hold the SP down). So I would expect some combination of the three, which sounds good to me.
I would much prefer us to do Hanc0ck alone rather than JV it. The key point for me is that if we do Hanc0ck alone we’ll then have the experience, contacts and cash to do Brockman alone. And if we can do Brockman alone, we could genuinely be a billion dollar company. Genuinely no reason why not. Got to be worth going for!
Thanks for the breakdown PaulQ but not quite sure if that is how it would work. We plan to produce at 50% in 1st year so about 50,000 tonnes per month. Bill mentioned 100,000t or even 500,000t shiploads so even the 100,000t load would take 2 months to fill. This would get us $10m after 2 months. Meanwhile we have no link road built yet and we have purchase invoices to pay for the lease of the mobile units and subcontractors.
This only works if we get cash upfront because the road will need to be built first. $15m at least is needed before the 1st iron ore arrives at the docks. So the options imo are:
1. Offtake agreement for say 300-400kt with cash upfront.
2. JV with a major who will bear the capex cost
3. Placing but due to size Vs mcap could mean a large premium discount + warrants
4. Secured Loan
I'm preferring option 1 but not sure how likely it would be. Failing that it would be a JV.
By the way. I'm not concerned at all. Just excited about which way this will play out. Whichever way it is, we will all be better off.
PaulQ.
Excellent post.
And no large upfront cost that wouldn't be covered within the first six months as Bill rightly said
The first motherload = first sale of iron ore
They don't need a road persay they already have a track a few KM away from the main roads to the port. No issues with transportation at Han(ock.
Read a recent exurp
"The mining method would probably entail using surface mining machines such as those already used by FMG very effectively already and would require minimal screening and crushing. Should this be required, it would be done by a mobile unit right at the mine face and then, for delivery of the ore, road transport would be a suitable and highly economic method. Contract mining and ore transport would be the preferred option to further reduce CAPEX requirements for the project.
The project is only 20 km from the iron ore town of Newman so other than a small central office on site no camp would be required to be built. Contract mining and transport would be recommended as well again to negate any CAPEX to purchase equipment and support infrastructure to go with it (maintenance facilities etc.). The main CAPEX would be for putting in a suitable road between the mine face and the Great Northern Highway to the west of the tenement but once installed would need minimum maintenance. This would be in the region of half the projected CAPEX and based on current mine planning and current iron ore prices would be paid back in less than 6 months into the mining cycle."
No concerns here, blue skies ahead
PaulQ, sorry seen it now. What do you exactly mean by motherload? Are you referring to a takeoff agreement or to sell Han****?
Bill said that we need to build a road that takes us to the existing highway that takes us to the port. Bill says about $15m. Not exactly sure what the other $15m is for as I would expect the mobile units to be leased, therefore payments spread out monthly. Maybe there will be a large upfront deposit to pay.
Oh no Napatham1 is back! Sold out bought back . Watch that one!
Great to see back above 1p finally. Haven't got that much, but enough to keep me interested and been holding for quite a while now in the hope this can do a ggp or eua. This is the most likely company on aim to 10 or 20 bag with the right flow of news in the coming year.
GLA
Alien is forming a great management team IMO (bit like Jurgen Klopp taking joining an up and coming football league team) which has been there and Done it before. By the time we firm up the resource hopefully any start up cost will be a drop in the ocean compared to the profit we will Make. In that scenario hopefully financing the deal would be the least of troubles.
I have replied to your earlier comment. Maybe you have no seen it?
The roads and infrastructure is already there and in place and a simple in and out job with trucks
The financing is not required as we can sell the first shipment upfront at a discount.
End of story, Alien win