Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. 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.
to 31 January 2019. And JW has been good enough to reiterate details of events which have taken place since that time. Almost everything is very positive and one sees the project developing smoothly and effectively. But there are one or two items which may account fot the fact that it has not exactly enlivened investor or produced many new subscribers.
The marine licence is still outstanding and though I am sure it will be granted investors are always cautious when there are important elements outstanding.
The second is lack of knowledge of the best deal that can be obtained from the chosen equity partner. The effect of the deal may be very dilutive for shareholders. That is why JW was reluctant to accept the deal which was offered at the end of 2018.Investors who see the Sp going ballistic upon announcement of the deal are likelyl to be a little disappointed. One of the reasons I would be happy to see a bid which might stimulate a better result!
One last point. Si Derman, I don't see any kind of "standoff" relating to the offtake providers. The RNS appears to indicate that the number of potential offtake providers has been reduced to three and that this decision has been, at least partly, driven by "counterpart requirements" of the three who have been set aside.
Okay, bad analogy. What I was getting at was the fact that of all the different parties that are part of the finalised package some may prefer to work alongside others, maybe for historic reasons, whilst another entity may have other favoured partners. It's striking that right mix that seems to be taking the time.
Cheers.
Setanta, many thanks for your balanced views as always. A couple of questions if I may. You note the deal could be dilutive for shareholders, but it’s clear from the RNS any agreement would be at project level - why would this be bad for shareholders? Secondly, (and I agree on this) you note the SP won’t rocket initially and it will be a gradual increase. Given the current SP is significantly below the costs incurred to date (factored into the deal) where do you see the SP initially landing if FID is delivered and the full licence granted? I think there will be a contingency if the licence isn’t granted, but it would heavily impact any deal and a sale may be more desirable at that point.
Si, I'd imagine INFA are well aware of who they want as well as who will work with who. Having multiple parties at the table helps ensure fair value is achieved for the asset but at this stage in the game I'd expect INFA to know exactly who they want and it's just a case of getting the complexities of the deals completed.
Sentata, with regards to dilution its worth noting funding will be at the project level and not the company level. Sure, INFA will lose a large percentage of the project but this is fully expected - they will maintain a minority stake which will still be worth many multiples of current MCAP as well as secure construction/management contracts etc which will bring additional revenues.