A "big difference" between a binding and non-binding offer? How's it a binding offer if it's subject to due diligence?
I'd think that if FWL "inked" any agreement (even a Heads of Agreement), then it would be a material event and they'd be obliged to inform the market.
FWL need about $12m to fund feasibility studies. Ideally they'd be able to get this without any dilution by offering a right to JV (at say 50:50). There shouldn't be a need to issue shares.
If they need to offer shares to sweeten the deal, then 19.9% (diluted) will need to raise at least $12m. This would value the company at about $48.3m (or $0.49 per share) undiluted.
That's probably not a bad deal and a reasonable reflection of the current value of the company!
Importantly, reports that a 19.9% investment will get Tai Feng a 50% offtake are off the mark! Subject to feasibility studies, they'll have the right to JV, which means contributing at least 50% of construction costs to earn offtake rights.
LCG Price at posting:
14.9¢ Sentiment: Buy Disclosure: Held
