It depends on the "deal"
IF Mark Smith was trying to sell me part of the company or form a joint venture with me I might wait. IF he was asking to borrow a billion $ the first question I would ask is "How can I be sure you can pay me back? I believe an already complete FS with 3rd party blessing that says the debt can be repaid in 3 1/2 years of operation is a fine answer to that question. If Mark were to say "but we have engineering in progress that might mean less than 3 1/2 years," then the potential lendor is going to say "Whoah, hold everything?" Why would he do that?
I personally bought a car last year. I took out a three year loan. I told the lender " right after the first of the year I will sell a batch of stock and will pay the loan off." He said okay fine whatever. He did not say sell the stock then talk to me.
In some respects this is a chicken and egg thing and which comes first. If you cannot borrow money until you complete all of the engineering, how do you pay for the engineering? Nordmin is working on PART of the engineering. The surface processing facilities are OVER half of the project. So far Nordmin has nothing to do with that. I have seen zero announcements about anyone working on that. That is very likely because no one is, because, no one has been hired. And, no one will be hired til they get financing. If you don't have to complete all of the engineering to borrow money, then what is so special about the part Nordmin is doing? IMHO there is nothing special or critical about what they are doing with regards to financing.
However, dewatering and main shaft sinking are right at the top of the list of critical path items. They need to start first. In that respect Nordmin's work is critical. These critical path items cannot start until the detailed engineering for them is done. So, Mark borrowed a couple million and got Nordmin started on them so that they can start ASAP after financing. Might Nordmin's work shave some time off the schedule and/or $ off the Capex? Sure, we all hope so. And that same possibility holds true for ALL of the detailed engineering on ALL of the project.
My personal slant on this:
You either believe Mark knows what he is doing or you don't. I believe he does. I think that is why he picked the first couple items on the critical path and got engineering started on them. I also do not think he would pay Nordmin to do a bunch of work and then have those finished blueprints sit around gathering dust for 6-12 months before construction started. I suspect his intent is to have Nordmin finish up the engineering on these first critical items about the same time he gets financing. And, he can therefore start going out for bids ASAP after financing. You cannot go out for firm price bids until you have financing arranged (I guess you can, but bidders will ignore you or offer up high ball prices.) But you also cannot go out for firm price bids until you can tell bidders EXACTLY what you want them to bid on. You need financing AND you need detailed engineering and you need both at about the same time. Mark and Scott Honan know this. Mark is working on financing and Scott is working on Engineering and they ARE talking to each other. If I did not believe that I would not be invested in Niocorp.
AI
