Financing ArrangementThe financing arrangement for Sangdong is explained in page 21 of the presentation on the Almonty site.
73m loan from KfW (guaranteed by OeKB) goes into the AKTC Project Account. To complete the financing, Almonty has to provide an Equity Injection (cash) to the AKTC Project Account. Almonty needs to raise the cash to provide the injection. At some point in the past Almonty said that the cash required was 20% of the loan which would be about 15m and which would be typical of good quality project. There is no such number that I can see in this current presentation. Over the past 2 years Almonty has raised cash by selling debentures or shares to Mr. Black, to Mr. Gutschlag, and to investment bank JP Morgan, to the off-taker GTP and probably to others. This looks like the same kind of deal. I don’t know how much equity needs to be injected into the Project Account. so I don’t know if this 2m debenture completes the injection.
I do not think they had it planned quite this way. but things always happen and maybe some of the other contributions to the equity injection came short at the last moment. IThe debenture is small (2m), it is sold to Mr. Gutschlag (deep insider) and carries no special conversion options for the buyer. My thinking is that this was a last minute deal to complete the equity injection and Mr. Gutschlag was happy to help as he has done already in the past (at higher prices btw). In my opinion he (and Mr. Black) have carried the company through some very rough patches without short-changing the other shareholders and deserve credit for it. The dilution will be about 2% at the minimum conversion price (62.8c). But since the debenture can be converted only after financing is completed, the conversion price will likely be higher, so less dilution.
Again: I only know what I read from the releases and this is my opinion only. worth about 2c.
I am about to get out of town again and will not be back until well into next year. So: Merry Christmas and a happy New Year to all on the board.