RE: RNS7 Oct 2023 13:47
Not sure why people are concerned about a “Performance Payment”. As I keep saying, there needs to be "Performance" first.
We could have just kept our ownership at 51%. But that is not a good idea if you want to de-risk the project and attract funding.
What was the RNS after the 24th August 2022 90% deal? Answer = Anglo Deal.
The RNS after that?
= Strategic acquisition agreement boosts Hanc0ck Development. This was the very important Mallina deal, which is key to getting access to the Northern Highway.
The majority of projects owned by explorers have some sort of vendor Option Agreement since it's usually best for juniors to spend their capital on the ground rather than buy out a tenement 100% upfront without drilling it and defining an economic resource.
Also it’s pretty obvious that they have built in a buffer for any Performance Payment (if it applies) into the Capex.
RNS 26/4/23 stated:
“The Company's procurement efforts are on target to deliver ±US$10 million in CAPEX savings from the initial estimate of US$30 million in the Scoping Study.”
Fenix’s Capex was A$15M and they had to build accommodation facilities and buy a shed at Geraldton Port (since it’s in a residential town and can’t have dust blowing around).
UFO only 17km from the town of Newman (so don’t need to build accommodation) and no shed needed at Port Hedland.
So UFO can easily do it within US$20M with extra US$10M buffer for any Performance Payment if applicable.
US$30M (£24M GBP) is still tiny for a mining project.
The Vendor Windfield has only taken shares as payment (only small cash amount $60k) so not sure why people think it will be cash payment (even if it applies).
Have to remember they are UFO's largest shareholders so will want capital appreciation in the SP.
If an IPO, it will obviously be shares.
Or if buyout, they just cut the cheque from Gina or MinRes. MinRes need access to our haul road, so IMO they will either have to pay towards capex of haul road, or pay toll charge or buy us out.
At this stage, too early when considering current UFO Market Cap of just £12M which is a joke considering UFO is a near-term producer with approvals all coming in plus owns 100% of Elizabeth Hill, Munni Munni North and the Munni Munni PGM & Gold project.
Sign In
Follow the stocks
