RE: Funding Imminent?21 Mar 2023 08:33
DP there isn't a set formula for this. only thing that is need is for potential financiers to have access to the data required to make their decision. The pilot plants and process verification was completed 18 months ago in Australia. All the data that was required for formal documentation of the DFS, BFS etc that you mention and that are very helpful documents if discussion weren't already being held with financiers, would also have been required to produce the FEED document last year. for me, the biggest mistake was PRE calling it a FEED, because it wasnt, it was closer to a BFS. the feed being an engineering document that is of very little relevance to an investor, apart from the summary page. and the budget pricing. Since then, budget pricing of +/-30% has been converted to project pricing including +/- 10% contingency which is normal when carrying out project final costing. For Saltend the cost was projected to be be $250 million. representing $195 million, +10% contingency, plus expected finance costs before commencement of cash flow. it was the latter component that made PRE consider pushing the time line back to when more favourable pricing was expected to be available. a finance cost of $35.5 million, assuming a drawdown of 1/3 in year one with the balance in year two, would require an interest rate of exactly 10%. at the time, Bond rates were heading towards 15%. not due to the high risk of this project specifically, but due to lack of liquidity in the bond market generally, which was a far better position than 3 weeks previously when then the bond markets were closed completely. And yes, i do realise that i is 21st March and 0nly 10 days left until the end of Q1
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