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I agree devil. You produce the dfs assuming you have to pay the costs. If events overtake you (by being slow in this case) then when the project takes advantage of roads (for instance) that others have built in the meantime you get a positive variance on your forecast infrastructure costs which results in a more profitable project measured against the budget
Amtech It's pretty obvious that them costs would of been included in the DFS, Blackrock should be completing whole finance package soon and cracking on with production. I think people are just suggesting that waiting for them to start would be beneficially to us. For things like road or able to save on equipment/machinery that is already in the area.
But this have been used to justify slow moving pace we are now 310 days since ML we need some updates and some new investors, it doesn't take much to move the share price at all.
Wasa, any idea when points 1) and 2) might be expected to complete?
Amyech,
Could you show me which part of the DFS is misleading?
Because I've only seen the highlights.
If you're referring to the total Capex, the entire purpose of it is to be able to take it to a bank/lender and have them satisfied the money will build it.
It's also to tell ACP how much each component will cost them.
If it satisfies that, I fail to see how it's misleading?
You need to bare in mind we only received the highlights of the DFS, as opposed to the full DFS document itself. I admit it was something I found a little annoying, as it's a document I generally do enjoy reading.
Pretty much every mine needs some sort of access road built. There's nothing different here.
Whether BKT are happy with it or not is irrelevant. It's a long known consensus that these road have to offer public use - Especially as they can connect incredibly rural communities with cities they wouldn't otherwise have access to.
Everyone (aside those with liquidity) is frustrated with these price levels, but patience is still key here.
More or less every Junior is following the same chart pattern as this is a market-wide issue. Our newsflow will come.
At this stage you need stomach, not brains.
What else can they do they need the road? I assumed the various miners in the area might do a deal to share cost but apparently a better strategy is to wait for your neighbour to build it for you.
I bet BKT will be very pleased that everyone will be using their road for free.
Once BKT secure their funding deal, they'll commence pre-construction works, and the first thing is clearing any top-soil, and building an access road.
The road will come sooner rather than later as it's particularly important to get heavy machinery to the site.
It's relatively obvious that others in the area (including ACP) will be using this road. I believe Ecograph are likely to, too.
A part of me feels the lack of news we've had has actually been a blessing in disguise.
Nothing to do with MB, but just pure luck.
Looking at the likes of HZM, it's the lowest it's been since COVID hit.
BKT can basically erase a years worth of SP growth. They're also very unlikely to rocket up over their financing deal because they've already had a large run-up, and pre-construction tends to be the lowest ebb of the Lassonde Curve.
Whereas this has been dog sh*t (in terms of SP) for well over a year, it still has huge potential to move.
Aside from the scared liquidity sellers, there aren't any sellers below 5p here. It just needs the buying volume (news related) to start moving up.
We know what we're waiting for:
1. Tanzanian Free Carry agreement. I'd be very surprised to see this above 16%.
2. Updated DFS. The above percentage would need to be plugged into it, which would explain the delay.
3. Off-takes. Graphite may not be a homogenous product, but those differences can be mitigated when your mine is next door to another.
4. FEED Phase 2. These things tend to be paid for on a contractual basis. The more you pay, the more resources Xinhai allocate, and the faster the work gets done. I don't imagine there being a rush here, which is why it has taken so long.
5. Financing. Will this be a problem? No. Why? Because lenders in the resources space look at the demand of the commodity. Graphite demand is sky-rocketing, and supply is simply not there. The IRR of the project is at such a grade that ACP can afford a higher interest rate whilst paying the loan back faster.
Now, nothing is perfect. We know the wait has been dehabilitating for some, and the comms have been atrocious.
But it's also why Peter Lynch says it's not about having brains, but about having a stomach.
If the project remains on track (albeit slow), and material news is not negative - Why would you sell other than the sight of a red portfolio?
It's more than possible this slips further, but Juniors have been the first to go in this market. Nobody saw that coming, but it's the well positioned projects that'll likely be the first to recover.
We're lucky to be in a position to know precisely what we're waiting for, and now it's just a question of waiting for it.
A lot of us got excited when the mining licence was approved, but it's our own faults for investing on the back of hype, and not DCA in.
Now we're at the lowest it's been in years, and suddenly it's a bad investment?
Not at all.
The Board are here for productio