RE: Funding20 Mar 2019 17:51
BCN RNS 14 Mar 2019: "Statement Price Movement" - "And is in discussions with a number of potential CORNERSTONE investors as part of the funding process. These discussions are ongoing and the co will provide an update to the mkt as appropriate."
BCN RNS, 20 Mar 2019: "Zinnwald Update: In addition to Zinnwald, we are focused on COMPLETING funding for our Sonora project in Mexico with a view to commissioning an initial 17,500tpa lithium carbonate operation and COMMENCING production in H2, 2021, as we look to unlock the US$1.25 billion NPV assigned to Sonora."
Comment:
If one looks at an example say the York potash project, the capex runs into billions and that cannot be met SOLELY by a placing. There is a usual mix depending on how the co wants to structure the funding in a proportion ?/3 etc.
So, with a market cap of £30 million [+-] at some 22p+, it would not be possible to raise $400m for example via the normal funding method as in companies raising say £200k on a £2 million mkt cap. From the latest, I gather a global institutional is in the mix? Again, no details yet. Just an example of big funding.
In terms of broker notes, they can calculate the funding ADJUSTED share price if they know what sort of funding and the proportion.
In this case, BCN*s last and latest RNS mentioned funding from "Cornerstone" investors as above.
Further to this, we had the Reuters story about Southern Copper considering investment in a Mexican lithium project of which there is also a Chinese interest. So, without any inference this is about BCN, it does show that this route could be like the one Solgold took [history now] wherein the majors took stock in exchange for substantial investment at a premium to the share price. One would gather that an Valuation Report is done as norm?
So, one awaits a further RNS. Just illuminating that funding has not been mentioned by BCN via an RNS to be "placing" or "rights issue" as perceived.
Please check with the Nomad for further clarification as they are licensed under the FCA to do the calculations etc.
DYOR.
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