Ann: Mitsui & Co secures Hawsons off-take, page-2

In some ways this announcement is not quite as good as I was hoping but in other ways its much better.

I was hoping that at least 50% of production offtake locked in and at least 50% of BFS funding provided. The announcement is only for 20%. But that is where my disappointment stops and my excitement starts.

I was expecting that shares would be issued to get the funding and I was not expecting a construction funding commitment at this stage either.

Given that there are no shares being issued, this has a double benefit. Firstly, no dilution. But secondly, if my understanding is correct, then by CAP contributing these funds to the Hawsons JV, then CAP will actually increase its percentage of the JV and end up with more equity in the project for the existing shareholders.

Also, Mitsui was also not part of the initial group who signed letters of intent or have increased their stake.

That means that if anyone else wants a share of Hawsons production, they will need to get on board or miss out (noting that there were letters of intent for 120% of planned production).

Whilst I was wrong in my guess about the interest coming from Sanjeev Gupta and the GFG Alliance, I think he could still be interested meaning that any overseas organisations looking for a slice of Hawsons production have even more competition.

I see this announcement as very positive. I will be really excited if CAP can get more than 50% of BFS funding signed up on this basis and once past the 50% mark, I think the rest will be funded very quickly.