HUGE NEWS for Standard Lithium!! CongratsEquinor investing up to US$160M for a 45% in Standard Lithium's two main projects...
This is extremely BIG news. US$160M for 45% values 2 of the 3 projects (the 2 most important ones, on a 100% basis) at $356M. SLI will own 55% of that implied valuation, which comes out to $196M. That might not sound great, but the KEY POINTS are that SLI is now FREE-CARRIED for the next 3-5 years as BOTH projects are substantially de-risked by EQNR!
The vast majority of deals like this result in the Major investor/strategic partner owning 65%-80% of the project(s), and the junior 20%-35%. Yet, SLI comes out of this owning 55%!! maintaining > 50% control of the two projects. Since SLI will have very little-to-no new equity issuance for years to come, the value of that 55% ownership in the two projects will grow quite substantially as EQNR de-risks the SLI story. The after-tax NPV of the two projects could be US$6B (just a guess). 55% of $6B = $3.3B for SLI's 55% share!! WOW. Congrats to the team...