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Potential SP movers:
-Assore 33p+ bid
-MiiF $28MILLION paid in
-ML to be ratified
-$70-100mil offtaker announcement
-Ghana listing complete
Don't wanna say it's a leak but basically there's plenty of news due this quarter that can cause sudden buying like we've had this week.
What will move the SP, and mb prompt a bid, even, is the offtake agreement that we are expecting to provide the balance of capex funding needed.
Neil has been v bullish over this , painting a picture of ALL having several options.
When THAT news lands, we're off.
I agree. The offtake will be really interesting. In the last presentation, it was clear that only 30% of the output was up for grabs, leaving the final 20% unaccounted for. I assume the remaining 20% is MIIFs 19% share leaving 1% spare each month. Is that correct? If so, ALL are fully funded for the development but won't make any money for a little while after production commences. Which possibly explains some of the SP weakness.
JL
Just out of interest if Atlantics financial commitments are met via offtake /Piedmont etc why will they not start making after production starts ..not sure on your take there Jlite
Any potential offtaker will get a discount for providing up front cash. Commod deals I've seen over the years ranged from around 1/4 off to 2/3rds dependent on many factors. Hopefully Atlantic achieve a small discount as it's not long to delivering.
Inevitable the early years bottom line will be hit compared to them getting unencumbered pricing. An example:
SC6 spot 1600, aic 800, deal size 100k/y over 5y, cash up front 60m.
Customer discount say 40% - ie for paying say 60m up front they get 100m off the spot over 5y. 20m/y ie pay 1400/t simplistically that will cut 1/4 off cash flow. That impact highly dependent on spot price. Many variations possible.
A deal should be on av good for valuation but a poor deal for Atlantic could be negative. They won't!!
Thanks Gaias. That sums it up pretty well. Way better than my post!
My worry was how much of the value they have to give away to get the $75m-$100m up front cash they need to develop the mine and continue exploring. If they have to give away too much, then the majority of the first 3-5 years of profits are effectively used up to develop the mine. So decent profit wouldn't kick until year 4-6 depending on the deal.
Not long to wait now though, and with so many potential positive catalysts over the coming quarters, I am not letting any go.
JL
I know we don't know the formula that will be used but the price Piedmont will be paying should be near to market price if I understood the terms of their deal correctly
Piedmont paying market price. At no point have they said 2nd offtaker gets any favourable terms such as cheaper product. It's unlikely when there are 6 competing and bidding for access to the supply in the final round of talks. Plenty of deals like this and most likely outcome is the offtaker pays the spot price like the majority do and like Piedmont is.
Bring on the news.
Jlite it's not an upfront payment - it's a facility that ALL can draw down upon as and when needed like the existing PLL arrangement
The alternative to an offtaker getting more favourable pricing for providing funds in advance of delivery with a multi year deal is that their cash buys assets at the deal point in time, eg as Piedmont did. Atlantic have not ever mooted this possibility (which would obviously be dilutive to holders) afaict.
Whatever, getting this finance is paramount to project success. A massive risk eliminated.
I think offtaker interest is in securing supply for 2026, when according to forecasts spod to be in higher demand. ALL were also clear with their terms from the outset. They're looking for a strategic partner, not going to the market cap in hand so to speak. They could walk away in fact, knowing that sales will start from DMS Q1 2025 plus the further investment from MIIF due
*Q2 2025 but you get my drift
Any further idea on when this will list on the GSE after NH’s tweet the other day? GLA. CJ.
Https://www.youtube.com/watch?v=eXfoWbe6ZxA
Amanda advises at 13.28 on the Rock Stock interview.
I don’t like listening to someone who keeps saying um when speaking,not a confident speaking person.hope I am wrong
Well to be fair, she is the Finance Director and Company Secretary. In my view, she does a pretty good job in that respect and I would say that the Company communication via podcasts, various media platforms and "X" is far better than any other company I invest in. So whilst I agree that umms and aaars are a little off-putting, the end result is what matters most.