RE: Hi Cult!Hi Glafan, thanks for the kind words. I think I wasn't very clear at what I was trying to say. Actually, reading your PS and then going back to the press release, I see I did interpret it at least partly incorrect. So let me try again:
Earlier in the press release, they say that one unit is one share and one third of a warrant to purchase an additional share for 50 cents up to 4 years from date of issue. So in the case of these subscription receipts converting to one Unit, I think they mean the above. One share and 1/3 warrant per receipt. Like you pointed out, even if the share price is 0.95 when the milestone is reached, the financiers still have the option of getting shares at 35 cents and a warrant for 50 cents for every three receipts.
Pretty good deal for the financiers. The question is whether the purchase price of the warrants is included in the $80M. Is it simply $80M/0.35 = 228.5 M shares and 76.19 M warrants (meaning that in addition to cheap share price they're also getting the option to buy more shares at 50 cents at no additional cost) for a fully diluted 304.7M shares?
Or is the warrant price part of the $80M proceeds, in which case we're issuing the equivalent of 4 fully-diluted shares for $1.55 (3 x 0.35 + 50 cents) or 206.5 M shares and 68.8 M warrants for a fully diluted total of 275.3 M shares? I certainly wouldn't have turned down either deal as financier, but the former seems like a giveaway even though priced in with this level of dilution we still have 9% discounted NPV of $1.81 per share with Maracas, Currais Novos, and Northern Dancer (assuming $32/kg V, $275 WO3, and $17.50 Mo). Calculated the latter method, with a net total of ~738.5M shares, that NPV is $1.93 per share.
These are quite conservative estimates. If any of the potential for Vanadium in redox batteries escalates, or it starts to replace cobalt in Li Ion batteries, or just more strengthened steel (i.e. earthquake resistant) is in demand, Vanadium prices could easily be around $40 for the life of Maracas. Current tungsten prices are probably not here to stay but we could estimate it closer to $300 per mtu. These would push our 9% discounted NPV in both scenarios to a more realistic $2.13 and $2.24 per share, and that's still somewhat conservative and not factoring in the huge potential for additional V in Maracas or indicated reserves of WO3 in CN, nevermind any upside at ND.