RE: Am I missing something1 Nov 2022 12:41
Hi Bankrupty, Neil states that PLL are keen to expand and would contribute 50% to exploration of any new assets, but he's referring to the CCLP assets in Ghana.
Think about how this will be structured once mine construction is complete and PLL earn-in to their 50%. At present the Ghana tenements (the CCLP assets) are held by individual companies, which are subsidiaries of 3 companies registered in Singapore (presumably for tax efficiency) and these in turn are 100% owned by ALL ("topco"). I suspect this will be simplified by creating a JV company somewhere below ALL and PLL will then take 50% ownership of this and profit will be shared equally with further exploration costs borne by the JV.
Just to clarify a few other issues as I see them. ALL will presumably account for it's 50% share of the JV profit and net assets and any direct expenses such as Directors' fees will then be deducted to arrive at it's reported profit.
There have also been questions regarding the value to ALL of Ewoyaa per the PFS. The PFS values are at project level only and future revenues and costs will be shared by the JV.
Also, any investment by the MIIF will be in ALL and not in the JV (from the VSA Capital interview).
Lastly, and I could be wrong about this, but assuming we are talking about a JV structure, once PLL earn in to their 50% share, it seems pointless to talk about benefits to PLL or ALL for the 50% off-take to be allocated to PLL or the remaining 50% as the revenues and costs of the JV will be shared. The key thing is that until construction is complete and PLL earn in to 50% of the JV, ALL have control of the process and the project so it is within their remit to agree any off-take agreements for the remaining 50% and derive any funding benefit to help cover their share of any additional capital costs for construction of the mine.
Cheers, Ash
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