- 25 million Carbine shares;
- A$2.3 million in cash or shares at the election of Carbine (number of shares based on the 15 day VWAP at the time of option election); and
- 1.0% royalty.
Analyst Comment: This transaction is a positive outcome for Carbine, as the revised terms are an improvement on the original structure (reduced future shares on issue). More importantly this should allow for project financing negotiations to intensify over the coming months, as it is unlikely favourable terms would have been offered without a consolidation of the projects ownership.
As previously highlighted despite a relatively modest production profile compared to other Australian gold assets, Mt Morgan will have exceptional strong cash flows, driven by margins of more than $1000 per ounce. This is expected to drive outstanding financial returns (EBITDA during the first 3 years of production of around $50m pa - TSI forecast), that are more in line with a gold producer with forecasted production more than two to three times that of Carbine.
The information in this release should not be the only trigger for your investment decision. We strongly recommend you seek professional financial advice whenever making financial investment decisions.
Valuation: We have increased our valuation for Carbine from $0.41/share to $0.44 / share (SP $0.11 / share). The key driver for the change in our valuation was a reduction in the number of future shares on issue (current 369m vs. previous 417m - TSI assumption).
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TSI Capital Pty Ltd
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