David Flanagan giving BAT a kick on Twitter, page-178

There are a wide range of scenarios:

1. 100% equity - Heavily discounted CR
2. 100% equity - CR (May 18 CR was at 6c with share price at 6.3c a 5% discount, I don't think they would discount any more than 5% given the drop in the share price we have had)
3. 100% debt - would expect finance at around a 10-12% rate (failed RCF deal was at 10%, we are also in Mozambique so country risk a factor in a financing rate)
4. 50% debt + 50% equity as a discounted CR (50:50 split is just nominal for an example)
   • For perspective, the funding announced May 18 comprised USD $25M debt + AUD $20M placement + AUD $5M SPP ( so less than 50% was equity )
5. Traditional debt + offtake prepayment (would effectively be equivalent to 100% debt )
6. Offtake prepayment + CR
7. Convertible notes ( I think unlikely for BAT to go down the Convertible note path - can be heavily dilutive and market would react badly - I know I would )
8. Sell part of the project (I think this is unlikely), in effect a JV.
9. Other combinations of the above.
10. Fail to secure any debt or equity.

From a likelihood perspective, my view is that 50% debt + 50% equity is the worst case scenario and 100% debt is the best case scenario. I personally think additional dilution will sit somewhere between these two scenarios.

I also think the company will have learnt their lesson on conditions precedent, hence the effort in appointing Origin Capital as advisers to lead the financing. It's also my reasoning for assuming that the company will avoid convertible notes (they know shareholders aren't happy - numerous rants on this forum).

Company has alluded to a solution involving Origin Capital + Morgans + Hartleys in the last corporate presentation ( although this may be a reference to CRs already run by Morgans and Hartleys ).

Two directors have just purchased on market recently. May be a potential indicator that there won't be a capital raise.

For the benefit of others - here is a link to the announcement relevant to the appointment of Origin Capital (and the solution is focused towards debt):

• https://www.asx.com.au/asxpdf/20180927/pdf/43ypf8vj11vxhx.pdf

There has been a full review of the project and this info feeds into financing due diligence.

CAPEX remaining is USD $39.5M ( USD $30M was in the original RCF package, so USD $9.5M more ):

• https://www.asx.com.au/asxpdf/20181204/pdf/440xs34zx753tm.pdf

They may need additional working capital beyond USD $39.5M CAPEX.