QPM is undertaking a cap raise.

It is probably a smart move by management - to cash up and batten down the hatches and then return to the financing challenge once rates start to come down again and the macro environment is more favorable.

But, the lower the share price goes the more difficult CAPEX financing becomes. QPM is in a very difficult position. And to no fault of the team, I should add. Terrific management team. But nickel hydromet is extraordinarily CAPEX intensive and the macro environment makes their ambition to finance this project near impossible, for the time being.

The CAPEX bill stands at A$2.1b as at Dec 2022 with total indicative debt financing commitments secured equal to A$900m. I don't think it is possible to fund this CAPEX using debt alone - they will need a 60/40 or 70/30 (at best) debt-to-equity ratio.

Additionally, another risk is that many of the battery makers are moving away from nickel in a big way, it may not even be in the next generation of batteries.

All in all, I'd put the probability of securing financing in the next 12 months at a sub 5% chance. It looks like a great project on paper until you work out that debt at 7-12% (best case) is going to sink any company with $1bn+ CAPEX greenfield projects.

Low capex companies are the place to be at the moment. Even better, cash-flow-positive companies with pricing power are where I want to park my money.