hammering, page-14

AQA needs $3 billion at least to fund its project.

It will have roughly $1 billion in cash after the sale to the Japanese.

However, it will still need working capital and I imagine fund its other exploration activities.

Given the inflation occuring in the West it wouldn't surprise me if the project escalates to $8 billion or so (price tag of Jack Hills/Oakjee). Thats $4 billion...

Yes, AQA is trying to source finance from China but the credit markets are tightening. In my opinion watch GBG/Ansteel, there JV is trying to source another 150-250m from Chinese banks for a FOREX blowout. This has been on going for a good 6 months and we are yet to get any indication besides 'progressing well'. IF GBG/Ansteel can't secure additional credit given there project is currently on a 54/46 debt/equity ratio, then DONT EXPECT AQA to get away with 70/30 debt/equity. Thus will need to stump a lot more cash up front - ie asset sales/capital raisings.

8 Billion (ie 4 billion AQA) @ 50/50 D/E = 2 billion cash required.

6 Billion (ie 3 billion AQA) @ 50/50 D/E = 1.5 billion cash required.

8 Billion (ie 4 billion AQA) @ 70/30 D/E = 1.2 billion cash required.

6 Billion (ie 3 billion AQA) @ 70/30 D/E = 900 million cash required.

I highly doubt this project would be financed on 6 billion and 70/30. Just my thoughts given all companies, majors and small caps have faced 50-150%+ cost blowouts.

Lastly, iron ore is falling.