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do hope PS takes a careful look at SOLG's announcement. It shows exactly how to finance a new mining project.

correction; obviously meant "investor", not "investee".

good news!
At the weekend I suggested that I'd rarely seen a situation where a smaller company was in such a strong negotiating position as are we. This transaction has proved the point with bells on.
NM has dictated the terms to perfection and has avoided all of the control issues that are usually demanded by an investee of this size. In a lifetime of being involved in corporate finance I can't recall ever seeing a similarly one-sided deal.
Ladies and Gentlemen, this is an absolute masterstroke!

Got it.

You are missing the reference to the $200m.

There's just the matter of raising $200m in equity first. So that qualifies as rather a large project milestone.

By the way, don't forget the charges against the assets have already been lodged.

TC, to my mind the situation is confusing.
The company was allowed to drawdown the $25m despite the fact the Conditions Precedent referred to have not yet been met. Therefore, I can only assume they only apply to the second two tranches, and this would explain why the $50m hasn't been drawn.

TC , $13m as reported at year end, plus the $25m drawn post-year end.

My apologies...I missed it!

dougal, I think Secker said there'd be an update in the quarterly review due by the end of the month. If there's no progress at that stage, I suspect you'll be right.

post-balance sheet the company has $38m in cash. This should provide plenty of comfort that it has time to arrange the outstanding $100m whist riding-out the commodity price volatility.
But, I note that there's still no mention of the outstanding litigation against the COE Estate. Why not? The positive impact upon the IRR is very significant, if the company wins the argument. So why has this all been brushed under the carpet and no mention made for well over a year? Not good enough.

Quady, you are right, but I think Schlemiel's argument has always been based around the concept of Enterprise Value (I admit I may have mis-understood him)
For example: we raise £1bn to fund the project. A bidder emerges and offers an EV of £2bn on a debt free/ cash free basis. In this circumstance only £1bn would be available to shareholders. In other words, this could be seen as dilutive.
Of course, in a traditional sense debt is not dilutive but it's effects are ameliorated over time as it is repaid. This is why debt (leverage) is so useful and is employed so regularly in private equity deals; very little equity from the fund, ergo much reduced risk and stupendous returns if all goes well. If it goes wrong, the debt providers pick up the steaming pile of mess that's been left behind.
He has also argued that debt is dilutive in the sense that the company loses control of the business until the debt is repaid. This is not the case...unless things go wrong, at which point the debt instrument's control provisions kick-in.
Apart form this issue, I agree with him that we will not go into production ourselves and also agree with zeus's argument about the possibility of a step-by-step "prove it, flog it, divi-out, start all-over" process. This would be the best way to maximise shareholder value over a period of time.

jerrys, the answer is "yes", but I can't recall them off the top of my head! In other words, mine is a pretty useless observation!
This is not a typical situation: A non-resource company will have been trading for years and it's stock market valuation will be well established. Therefore, the chances of a massive premium are less likely.
However, we are an exploration company whose assets appear to be increasing by the day. As such, it's very difficult to put an exact valuation on things and a significant premium is all the more possible - see Hannam's report of yesterday.
I think the one thing we can say with 100% certainty is that NM will not sell the shareholders short.

Joke doing the rounds: "Finance Director of Patisserie Valerie in custardy".
Putting that lame joke to one side, this is a compellingly interesting story, mainly because it involves Luke Johnson. I've met the guy a couple of times and didn't like him, but he is very, very bright. I also find myself agreeing with virtually everything he writes in the Sunday Times, which included his article of only a few weeks ago about fraud.
He constantly tells readers that an NED must keep his eyes on the ball at all times. I'm afraid to say, it's very obvious that he forgot his own golden rule.

DG1, there are a number of caveats to my statement, in as much as there are certain circumstances under which a bidder can re-offer, the most significant being if someone else makes an offer. However, if you've made an offer which has either been withdrawn by virtue of defeat or some other reason, you cannot bid again for 12 months.
My point was really referring to the threat this would pose to BHP if a trade investor came along and took a blocking stake by way of a placing, for example. Hypothetically, BHP bid; the bid is rejected, they withdraw. RTZ then take a 20% stake with a view to working with the company to develop the asset. BHP would then be powerless to do anything about it without a dispensation from the Panel to make another offer...which they may, or may not grant.
This is a significant risk for BHP and, in my view, will ensure that whatever they offer (assuming they do) is at an a level too good to reject. In other words, it's going to have to be at a knock-out valuation.

earthling, if the debt is un-drawn the issue doesn't arise. There will be various forms of commitment fees to pay, but that will have already happened at the point of signing-up to the facilities. The debt providers may also try to negotiate some form of equity kicker, which would be dilutive, although not significantly so. Having said that, I think we'll be in a strong enough position to negotiate those demands away.

Fair point Dubliner.
Observation: When I look at the risks here I see the main one as political. That's not to say it's a red flag, but it exists. And no matter how much reading I've done on the subject, there's no clear 100% answer. Nevertheless, my own view is positive on this subject.
The other "risk" I see, is that we come too big. I know, that sounds absolutely daft. But I wonder of we could ever reach a point whereby our asset base is so large that no one could offer a fair value? Obviously, we would then go it alone, but I'm getting on a bit and would prefer the money in the nearer future and couldn't give a toss about 20 years from now.

By the way, I was one of those schmucks who had held Mariana for ages and sold out before the bid. I don't intend to make the same mistake here.

Very good example, schlemiel and it reinforces my argument.