TSXV:FCO.H - Post by User
Comment by
AyuFanon Aug 16, 2018 9:55am
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Post# 28471182
RE:FINANCING
RE:FINANCING Unfortunately, you are correct, offtakes are generally done at a reduced price, however, that's because it's a "requirement" to obtain financing.
A bank will not loan you any money unless you can guarantee you have money to pay them back once production begins.
A company will not loan you money without an offtake agreement to guarantee they have product to buy. They will definitely negotiate an offtake at a reduced price for the incentive to loan the company money.
Think about it .. who would loan ECS any money at this time?
Another way to do it is dilution via equity infusion .. .then yes, the company gets money to build the project without selling their product at a reduced price. .. the level of dilution is negotiated .