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And it’s repeat and rinse as far I’m concerned
It’s a bit like acquiring cheap land and getting planning permission to build on it. You can develop the project right to the end , with all the risk and capital that involves . Better off passing it on and getting a cut of the final sale figure . Just seems a very sensible way to go. Maybe somewhere down the line , when PM markets is in full swing , you’ll get stupid offer. Who knows, but it’s happened in every bull market.
Agreed DGR1980. The decision taken to follow this route for funding indicates that it was considered a better option than a general dilution. I can see how that might be possible. It’s an interesting model.
To put it in simple terms its 100% of nothing (as we are not set up to progress on our own, listen to brodie, we will learn from them) or 20% of something large. Great deal and if you dont like the business middl, sell and buy sone where else
Star Bright - The other way to look at it is we've diluted a project that is being progressed, rather than diluting all our projects.
Also dilution for progress means that its effectively dilution of a larger pie.
As Zak Mir said, Alien's business model makes us more scalable and cash efficient (eg we haven't paid a dime to develop Donovan 2 and can now acquire new projects).
This makes UFO the best vehicle to ride the PM & Base metals bull market as we continue to acquire more and more projects :)
Of course dilution can take different forms. UFO shareholders will only have an interest in 20% of any value generated by Donovan 2 following completion of the Capstone earn-in. Prior to the earn-in agreement we have 100%. So we are effectively diluted 4:1 on that project.
The alternative would have been a dilutive placing to raise the $4m (or whatever) required for the Prefeasibility study, whilst retaining 100% of any value generated. No dilution in asset ownership, but more shares in issue.
Diluting the asset or diluting the ownership have the same effect for shareholders in the end. Both can be valid ways for thinly-capitalised companies to fund projects, and both can be value accretive. It would be interesting to understand why one route was preferred to the other, especially as the company appears to be signalling intent to explore similar deals for some of its other assets.
If he means the EH licences, and also said, " already commenced with third parties with a view to joint venture"
then an Exclusivity Agreement for EH can't be long either!
Oh OK, I think he mentioned that in his last interview, that he was just waiting for that to be finalised.
The additional EH licenses prior to this I assume Max :-)
Also he uses the plural:
"the newly acquired exploration licenceS.”
Which other exploration licences has Bill acquired????
"Minimising dilution" means UFO is the best buy & hold junior miner on AIM!
Regarding the Greenland:
“Discussions have already commenced with third parties with a view to joint venture and earn-in into the newly acquired exploration licences.”
= Bill is hitting the ground running!
Regarding Mexican Silver Projects:
IBK, “will soon commence marketing of the projects to a range of potential investors and project partners.”
= Should get an Exclusivity Agreement soon!
Best of all the Institutions/whales that I have been waiting for will be jumping onboard the UFO!:
“third party funding options to develop and mining the projects minimising dilution to shareholders.”
MINIMISING DILUTION!!! :)