Proposal, financing plant construction without dilutionHere is my vision: funding without dilution for shareholders.
1) $60 million loan from SQM to LAC.
2)$50 million advaced payment from a customers
3)$30 million a bank facility, line of credit on request.
Details:
1)60 million from SQM in return of 5% of production the first two year
Thus 55% of production would go to SQM and 45% to LAC.
the numbers would be:
Imagine a production the first year at 20,000 tons
at $7,000 each = $140 M
10500 tons to SQM = $73, 500,000
9500 tons to LAC.= $66,500,000
This would cost $3.5 Million to Lac the first two years = $7 Million
This is around 11.5% interest rates
2)The opacity of the lithium market mean that providers and batteries compamy has to negociate the supply!
An agreement like Nemaska did Oct. 31, 2016
https://www.nemaskalithium.com/en/investors/press-releases/2016/8cb5b3a4-ebef-4139-971b-79eb40d65caa/
Nemaska has entered into an agreement with FMC Corporation ("FMC") pursuant to which Nemaska Lithium will provide FMC with 8,000t per year.
A customer could pay $50 million to Lac in exchange of an agreement to ensure supply to a competitive price.
3)Line of credit from the Bank just in case $30 Million
To conclude:
So LAC could finance first part of the construction plant without squandering the money of the shareholders
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