Besides the impressive IRRs and NPVs, the most interesting takeaway for me is that impending equity dilution in a worst case is 50% or less (i.e. Capex for Stage 1 = US$ 53m = A$69m vs. current Market cap of A$97m...as share count doubling via a 1:1 dilution reduces existing % shareholdings to half). That's low compared to almost any project out there and therefore readily achievable. And that dilution may well be less if we secure some debt/quasi debt funding directly or via takeoff partners.
So, US$53m max equity dilution is all it takes to start a self propelling flywheel that can generate CFs with NPV worth 5-10x that amount. This allows NZC/Tembo to negotiate from a position of strength. Unless the takeout price from Huayou is compelling, self funding is perhaps the better path and not particularly onerous.
NZC Price at posting:
36.0¢ Sentiment: Buy Disclosure: Held
