re: Ann: Green Rock Energy signs $7 million G... GRK is testing the market for capital at rather difficult times but it has no choice if it is to keep its $7M GDP grant. The matching requirement is $ for $. If the LEED grant application is successful and the present rights issue proceeds as planned, the GRK funding situation should be:
WA LEED grant . . .$5.0 M July placement . . . $1.05 M Sept Rights Issue . $1.65 M Less costs . . . . . .($0.25 M) Cash + receivable . $1.43 M
Total . . . . . . . . . . $ 8.88 M which should satisfy the condition easily.
However, if the LEED grant does not come about then there is the testing predicament of extracting at least $4M from a JV partner. Since the first stage of the project is expressly for the UWA there is really only one customer. Even then the funding will still be tight as two wells will need to be completed to 3000m. It's all sailing very close to the wind.
Clearly Green Rock is not short of good project ideas but as with all geothermal companies the problem is how to get over the initial financial hurdle of demonstrating viability and establishing a plant that generates income. In practice, out of financial necessity, companies are forced into JV partner agreements at an earlier time leading to dilution of value.
It is essential at the moment for every geothermal project to be successful as the entire geothermal renewables sector will be judged by any one failure.
Juke
GRK Price at posting:
1.8¢ Sentiment: None Disclosure: Not Held
