RP2.0 Project Financing could look like ... - RP2.0 Early Works Program financed from internal cash flows (Q1 & Q2 of 2022) = $20 Million
- 93,167,000 common share purchase warrants outstanding with an exercise price of C$0.23 each = $21.43 Million
- Project Finance Debt requirement (in addition to the working capital requirements met through Revolving Credit Facility) = $13.04 Million
- Glencore’s additional support for RP2.0 subordinated to traditional project finance debt ($33 Million - $13 Million) = $20 Million
- NPV of Post-Expansion Average annual silver payable production stream of 303 Koz from 2024 to 2032 @ $24.47/oz silver price assumption discounted @ 8% = $36.53 Million
TOTAL = $111 Million
Trevali should not sell the entire silver stream. 50% stream sale would be a safe bet. In that case the NPV of sold stream would come down to $18.26 Million and the requirement of Project Finance Debt would go up to $31.31 Million.
At today's zinc prices, Trevali could finance the entire project from internal cash flows. However, to go ahead with the project, Trevali has to de-risk the project by tying up the entire financing up-front. Only then other stakeholders (like financial institutions providing the revolving credit facitily for existing operations, Glencore - the provider of subordinating debt, and Streaming Company buying the silver stream) will back the project.
IMHO