Ann: MOD Delivers 61% Increase in T3 Ore Reserve to 34.4Mt, page-12

Funding assumption was 60:40 Debt:Equity on US$230m which means they are factoring equity of c. $120-130m. Therefore I assume they are implying the raise would be at 40c. We all would hope that with DFS news coming that price will rise to allow raising higher than here.

I disagree with the second part though. Their A$390m valuation was based on $340m NPV + exploration potential - corporate. That means to get the NPV value you have to spend the cash to get the mine operating. So essentially end valuation is NPV + any upside we can add through the drill bit.

Upside shocks come if we can do the usual things:

1. Get a higher debt percentage than 60% (obviously funding costs etc need to be taken into consideration)
2. Raise equity stake at a higher price
3. Beat their exploration assumptions of $80m in value. Plant is meant to have FCF of $90m p.a. 13 year NPV10 of that is circa $29m. So they are factoring only around 3.2 years of LOM extension.
4. No underground factored in. If this can be firmed up to provide a solid NPV then it adds to value.
5. Commodity price upside

Interesting thing is that even 50% of NPV on their assumptions is A$170m. Which based on current SOI is around 56c. To me that shows how much of a low ball the SFR bid was. If they shot a 50c offer in right now they might get it over the line. Would still be very value accretive to their company as well.

I would definitely consider us "in play"