Debt will help to minimise dilution. If there is a gap in funding from debt, they will need to fill it from equity ( I would like to see < 60% gap or better ). Hopefully they will surprise and there will not be an equity component ( recent director purchases on market a potential indicator ).
One other scenario is they may be able to negotiate an Offtake prepayment. An Offtake Prepayment is essentially debt and usually done on interest terms.
The MoU with Meiwa corporation has not yet been converted to a binding offtake.
There is possibly 9,000 tonnes of Offtake capacity unallocated at present from Montepuez Stage 1 (50ktpa in Stage 1). Urbix have only firmly committed to 5 kt of 11kt in their offtake. Let’s assume 10 kt forms the basis of an Offtake with Meiwa and an Offtake pre-payment, then this could allow a prepayment of AUD $14.9M ( assuming a 10 kt offtake ).
Column 1
Column 2
Column 3
Column 4
Column 5
0
Tonnes
Price USD
Value USD
USD to AUD
Value AUD
1
10,000
$ 1,064
$ 10,640,000
1.4
$ 14,896,000
Now Meiwa has retained earnings at end of September quarter of approx. AUD $287M. So I think they would have the financial capacity for an Offtake Prepayment.
They could also renegotiate an existing Offtake, however (quick guess only) it might be that Meiwa has the strongest financial capacity of the for a prepayment (comparing with the other Offtakers).
