Financing - Go it alone...Hopefully, MDR.v can sale Lindero on fair and reasonable terms.
But let's assume MDR cannot get a fair price. Assuming 80% bank financing with current market hedging terms for 108,000 ounces at $1,850 deliverable on Dec 2013 (54,000 oz) and Dec 2014 (54,000 oz). Interest rate at 12% to get a bank to accept Argentina country risk and 80:20.
Equity Financing of 17M shares at $3.14 per share, with 7% placement fee. No warrants.
This would raise $50M equity and $200M debt hedge financing = $250M
More than enough to build the $220M mine capex and have some $ left over, just in case.
Mine production for first 2 years is 160,000 ounces
160,000 * $800 total production/G&A cost per oz = $128M ($407 cash cost/oz per tech report plus more than enough to cover G&A costs + interest + royalty)
106,000 ounces sold @ $1,850 market price = $196M (net of hedge payback 160-54=106)
Profit for Year 1 = $68M ($196M-$128M=$68M, plus 54K ounces delivered to payback 1/2 loan)
Shares outstanding = 51M current + 17M new shares issued = 68m shares.
Earnings Per Share = $1.00 = $68M profit/68M shares
Note: In reality, MDR may be only to finance 70:30 and 1/2 warrants will likely have to to issued, but this quick and dirty analysis seems materially accurate. Loan is paid back in 2 years and less than one year production is hedged (108K ounces hedged vs. 160K production). IMO, would be best for MDR to hire 3rd Party Mine Contractor via a full turn key contract to get the mine built. Turn key contract would cost more, but MDR would have contractual/bonded guarantee for a fully working and operable mine at a stated capacity.