it is always darkest before the dawn, page-19

Bargain

I admire your confidence that PAX is going to build something and generate a profit. I'm not so sure it will happen or, if it does, it will be soon enough for me. I'm getting old.

I'm also not interested in who is first but which makes the best return for my investment, and I find it hard to see how PAX will make a significant return per share if it has to rely on external equity.

The paragraph you quote back to me is from a mistaken impression I had of the funding scenario. Oakeyflat indicated that my earlier outline was more correct, which I'll outline as follows -

Let's confine my example to Sokoria and assume the resource is as promoted by PAX (even though PAX has not published any detailed geological information let alone a CP report). According to the last quarterly the equity required is $45.3 mill of which PAX needs to find 45 % or $20.385 mill. We'll assume Bakrie will contribute the balance of $24.915 mill as required.

PAX hasn't got $20.385 mill and can't raise it at its current sp so it is looking for equity investors, probably VC funds in Asia. What kind of deal might be achieved to bring them in?

If a VC fund puts in the full $20.385 my guess is that they'll take about 90% equity in the Sokoria project and leave at most 10% for PAX and its shareholders.

PAX says that the distributable cash-flow from Sokoria will be $652.5 mill, but doesn't say over how many years. Let's assume it is 30 years so the average net profit is $21.75 mill per year. In my example PAX gets 10% or $2.175 mill dividend income. Once staff and admin costs are deducted how much will get to shareholders?

Please tell me if there are errors in my logic but as I understand it there are just too many ifs and buts in PAX, which is a shame.