Magis?
How can you say they will need to be acquired to get into production, the have close to $70 m in the bank and they need to raise about $535 m.(GFSC has committed another 15m in the next round of financing)
If they get 50% debt financing that will leave them with $235 to raise in equity raises, with either a 2nd strategic coming on board with $70m or so and the rest coming from institutions and retail.
Now if they manage to pull off a debt financing above 50% at say 60-70% they could only need to raise a further $130m in equity on top of the roughly $70 m they already have.
That is a really interesting proposition.
And with $270 m in revenue from the 1st phase 625,000 ton operation, there is lots of money coming in to support debt payments and building out the next phase to 1.35m tons per year.
when you have only 28 million shares outstanding and more than 10% of the required money that is needed to build the mine.
Wpx does not even have 1/2000th of the money required to get into production.
how can you compare a project like wpx's that will require IMHO $5 billion plus to get built with Karnalyte's that only needs 626 million to get into production of which they have 68 million?
massive dilution is the 6 billion shares Wpx needs to issue to add to their 200 million existing.
krn can get away with issuing another 10 million shares or so and have potentially enough money with debt to get into production.
i genuinely feel sad for Wpx investors, even the ones that trash talk Krn.
6-8 months from now we will see how things are.
I really hope a buyout occurs for you guys.
But with figures bandied about here of between $200m- $900 m, how do you think this would affect a potential buyers rate of return on their investment?
If Wpx has similar costs to the K&S Legacy project, it would work out at $4.5 Billion to buy and build it. Then factor in that interest costs have to be added for the build period and then the ramp up to full production, it could easily have a total cost of $5.5 -$6 Billion.
Do you think the Indians and the Chinese read articles on the Internet.
Have they read articles where wpx's management compares the costs of building legacy with the costs of building milestone.
According to Western Potash's management-
“On this last note, it’s worth noting that Milestone is very similar in terms of its size and its commercialization costs to the Legacy potash deposit, which is now under construction. This is significant because this potash asset was acquired from one of our peers in the exploration sector by the German fertilizer giant K+S Ag for around $430 million a couple of years ago.”
Why would they commit such colossal sums of money for rates less than they can get in a bank for money on deposit?
Would they be worried that wpx's management have zero experience working in the Potash industry.
None of them have ever built or ran a potash mine before.
Would it not concern them if they consider that an experienced potash mining team like K&S has have seen their costs skyrocket $800m . So why would they not consider and weigh the potential for huge increase in cost to occur with a management team that has never developed a potash mine before?