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Ref RNS 31/8/21
All (well 45.5%) or nothing for Piedmont.
Certainly not price impacting when there is 12m+ to sort it out (if there is anything to sort that is) before they are due to spend that cash.
Holding for the build.
GLA
This was in the 24/1 RNS:
"In addition to the US$5m Subscription, and subject to the Company reaching a binding agreement with MIIF for its proposed investment in the Ghana Portfolio, MIIF to invest a further US$27.9m in the Company's Ghanaian subsidiaries to acquire a 6% contributing interest in the Company's Ghana Portfolio, inclusive of the Project, expected to complete in the coming months"
With present structure Piedmont are the first big capex spenders. FID early '25 according to them.
N2S realistically I have to agree on present fair value, but only in small part from what you flag up.
Though Atlantic have consistently suggested a bit earlier Piedmont are now firmly stating 2025 for the FID and construction commencing. Proactive AU, Phillips:
"The project, expected to commence construction in 2025, promises high returns with its low capital and operational expenditure profile.
“We expect 2024 project spending to be minimal with a focus on advancing the project through the environmental permitting and approvals processes to prepare for an ultimate investment decision in 2025,” Phillips said.
Piedmont is exploring non-dilutive financing options to support its share of the project’s capital, ensuring minimal impact on shareholder value."
https://www.proactiveinvestors.com.au/companies/news/1040359/piedmont-lithium-targeting-cost-efficient-lithium-mining-on-two-continents-with-nal-and-ewoyaa-investments-1040359.html
But also they have now openly stated that they are to seek non dilutive debt/grant finance for Ewoyaa.
This clearly marks that the build start is a year out. With the agreed Atlantic-Piedmont deal build capex comes from the partner first.... (you know all this but quite a few new to here don't appear to ;-) ).. There is plenty of time for all the other issues to get resolved. Those I expect do depress the price somewhat but I think it's the present macro situation causing the most pain.
Perhaps difficult for those hoping for fast bucks from ALL. Only left with Assore going hostile to hang on to. No hint from Peidmont on that.
We'll see.
ATB.
Debt financing plan for Ewoyaa
"Piedmont expects to submit a formal application for the Ewoyaa project debt financing later this quarter to the U.S. International Development Finance Corporation"
Https://www.businesswire.com/news/home/20240206121354/en/Piedmont-Lithium-Provides-Corporate-Update
Mike your 12.50. Yes, this is what I recall.
So say 300kt forward delivery to raise say $80m today. Reckon Atlantic would want it priced via a market price mechanism (with maybe a floor) and the partner would want a discount since they have made a forward payment?
What size total discount over the deal duration? The few deals I've seen at this advanced project stage have been around 1 1/2 to 2x the up front payment, so say $140m. On 300kt delivered some $470/t.
This would be little problem with spod at their DFS modeled price but but at today's prices of around 900 and say 2/3rds of the other production going at market price they would be struggling to achieve positive cash flow in those first years.
This miserable pricing must break soon!
On YT now
https://youtu.be/nlysbSpJeSo?si=RU14tPuNjaYrFWTc
Nice shirts!
Https://www.myjoyonline.com/bright-simons-abusing-truth-in-ghanas-lithium-deal-2/
( ´,_ゝ`) ... Depressed, unsatisfied (based on indifferent)... Wiki
Yep. Just about covers it!
Regardless of all the hopes on what is 'fair' the harsh reality is on average hostile bids tend to get set at around 40% above the existing market valuation. The predator will go higher if there appears another suitor or it's a frothy market. Present miserable lithium conditions suggest neither are that likely in the near term.
I think both Ghana and Piedmont would prefer Assore to remain as a supporter in the
background until at or at least near production....... Against the trend here I certainly do.
'Fair' will return with a decent rerate for lithium. Six months? As for 80 to 150? A fair wind..... and the vote.....and FID.... and Atlantic getting the balance banked..... and, oh, the build started. That should do it. Until then and as with near all project that nasty Lasond curve just gets in the way.
Patience required ar grab the (hoped for) 40%?
Just my (oldgit) view. ;-/
ATB.
Https://cnevpost.com/2024/01/30/china-ev-insurance-registrations-week-ending-jan-28/
Not shuttering but cutting back by the largest.. and cheapest
https://www.afr.com/companies/mining/australia-s-best-lithium-mine-to-taper-production-in-boost-for-rivals-20240129-p5f0q4
Finding the balance
Https
https://www.investormeetcompany.com/atlan�c-lithium-limited/register-investor
Register
htps://www.investormeetcompany.com/atlan�c-lithium-limited/register-investor
Is that a strong hint that Build Your Dreams is very much in play as the partner?
Stage 1 complete
Assore was delisted from the JSE in 2020 and went private. There would be near zero opportunity for any Ghanaians to gain any part of Ewoyaa post an Assore t/o.
There would also be a large question as to whether Piedmont would continue with its election to proceed with Ewoyaa (though I think they should) . With that not only would Assore have to find some $150m (@ 33p) but also all the est $185m capex before they could gain any return.
They presently will get near 30% of the returns Atlantic offers with production at Ewoyaa with only an assumed minor further investment to contribute towards Atlantic's relatively small contribution to final capex. A $15 to $20m comparatively low risk path with decent return.
I will be surprised if Assore choose to move on Atlantic before a Piedmont FiD or indeed move at all.
Seewotappenz