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I'm guessing this will be the next RNS in August:
KODAL MINERALS PLC
GROUP ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 MARCH 2022
Paper, like you say clarity required and very simple has the scoping study been completed and if it has, is it longer than six months?
If this has passed which conditions still apply to Say Chin, if any?
One area which did confuse me was 'after production' most offtakes involve funding or assistance to go to production.
Clearly they do not try think that is an issue as they are in talks with companies - but I found that wording odd.
I think we are all in vociferous agreement. There is a lack of clarity and Kodal's relative reticence is partly/ largely to blame.
Lav- I dont think it matters much but I believe you're reading that last paragraph slightly incorrectly. When they say no formal agreement they mean the "term sheet" agreement has not been extended by a "Formal" agreement but the "term sheet" agreement still stands as a small-f formal agreement and still applies.
As is say, I don't think it matters in practice because we are open to offers from anyone. Just saying that slight nuance is what was behind my wittering earlier today.
And at the end of the day- we are still holding shares in a massively undervalued company sitting on a massive asset with interest and options agogo. That is very clear in my mind!
Still, it may take a couple months before we hear anything... sigh.
All this speculation and hearsay is caused by lack of comms from Bernie. Although I think Bernie has integrity, he never commits to supplying information, always is over optimistic with timeliness and doesn't seem to do very much. Why does it take over 6 months to update some numbers and underestimate the ROI? I have patiently held this share for over a year but am now looking patience. Please Bernie do something..
Sorry paper you answered while I typed. The end of the Suay Chin webpage on the Kodal site says no formal agreement is in place or that one may be agreed. The last paragraph.
We are back to the same old, a website which is dire and should not have old information which is no longer relevant as potential landing pages, they should be in archive folders.
Only current information should be in the relevant gold and lithium landing pages.
Suay Chin page needs updating.
I think the website is a main reason why this share is undervalued anyone new does not have a hope in hell of working out where we are.
Either way if that information you posted is from Suay Chin and is genuine then Bernie needs to send out a communication.
Shareholders in other lithium mines or traders will use stuff like that to undermine the share price.
Agree Clapa. However at the end of the Suay Chin web page on the Kodal site it specifically states there is no formal agreement in place.
In the NPV figure there is no mention of a three year deal. Or in any of the RNS communications or interviews surrounding the updated study.
Bernie is going to have to comment if there is a formal communication floating around from Suay Chin, assuming that the translation is not false.
Good morning Lav.
That page says there was the offtake term sheet agreement that was finalised and then the extended "formal" agreement which may not have been/never be finalised.
But it's the term sheet agreement that allows Suay Chin the right to (try to) match any 3rd party on 80% of product from Kodal- specifically if/when the formal agreement fails to be agreed.
Even so, I agree that Kodal is a free agent in that we can court any offers from any 3rd parties we want. My only point was that I suspect it will take a bit longer because there appears to be a need to check with Suay Chin and their new majority owners to allow them the chance to try to outbid whatever that deal is.
Or maybe Suay Chin will be quick to say, no, we can't match that. But that seems to go against the recent takeover by Kanglongda and their stated reasons for the purchase.
My comment about lawyers was just because it sounds like there are a multitude of types of offers that could come in, covering variations of paying for the cost of production and then the price of product and I'm not sure what that means for Suay Chin being offered the chance to bid for offtake. But that doesn't affect kodal being open and ultimately able to take those bigger better offers.
Hopefully they buy more shares to firm up their position and we all sell and leave with hefty profits. Job done.
From Kodal site, following the information in the link you posted: shareholders should note that there can be no guarantee at this stage on the timing of completion of the Formal Agreement or if any such agreement will ultimately be made.
Under Suay Chin on the Kodal website.
As far as I understand we are free agents which is why there is so much interest in Kodal from mining companies.
Susy Chin of course can put in their offer like any other company and being major shareholders of Kodal they have an existing relationship. But I think they will be out gunned by bigger fish.
Paper, I don't see it as complicated as lawyers, otherwise the mining companies and other offtake offers would not be on the table, none of this is hidden.
Suay Chin gave a reasonable deal in 2017 when it was important to have an offtake partner for a mine to survive - see Bald Hill.
Since then the market has completely changed and the offtake deal, if finalised - on which there is no evidence in RNS form or on the site - the site specifically states it is not formalised, but if it were formalised is so weak that virtually any of the big mining companies or lithium offtake companies can blow it out of the water.
Ganfeng explained how difficult the market is for them and the mega money required to secure lithium.
I cannot imagine Suay Chin having the resources or expertise to trump the other companies, but we will see.
Lithium mining could not be more different than in 2017.
Lav - I agree - I have no idea how their fairly simplistic offtake deal would compare/compete with an offer that combined funding for the production as well as a stake or deal on the product.
I assume that would be for the lawyers to decide...
Papers.. I would go with that if they did finalise the agreement.
But as an example only not based on any figures if a mining company offered 300m upfront, to mine the site themselves then 30% of any spodumene price above x amount to Kod paid monthly, then this deal would have to be matched.
It was too safe an offtake deal for Suay Chin and no risk for Kodal, understandable in 2017 but not much good to Suay Chin now.
Unless the miners go and it is a straight offtake cash battle. Then they get the chance to steal.
apologies for possibly repeating what others have said - my screen wasn't updating as I was collating and forming that last reply...
Lav - Think i've squared the circle. Maybe.
In RNS of Nov 2017 when Suay Chin finalised their subscription, its stated they and Kodal will try to negotiate an extended offtake agreement for 80-100% of the spod. https://ir.wrendesign.agency/kodal/regulatory-news/news/84
That announcement states that negotiations will start after some sort of scoping study. It's not clear who is conducting that scoping study BUT, that becomes clear on the Kod website page where it's The Company (i.e. Kod) - https://kodalminerals.com/the-company/suay-chin/
The other thing added on the website page above is the case where no extended agreement is made within 6 months of the scoping study's completion.
In that case, Kodal can go seeking 3rd party buyers but Suay Chin has right of first refusal to match their offer for up to 3 years after first production. BUT - that's limited. Kod can sell up to 20% to a 3rd party without asking Suay Chin. It's only if it goes over 20% that Suay Chin gets to match the offer... which means Suay Chin is effectively sitting on a right to offtake 80% of the spod but at a 'market rate' set by the highest 3rd party bidder.
I think this marries with what Kanglongda has said in its RNS - even if the scoping study (which is never mentioned anywhere ever again) was completed and 6 months passed without a 'formal' extended agreement, Suay Chin still has a right to buy 80% of Kodal's Bougouni spod - just at a 'market rate' that has been described but is still to be set - because it would be whatever the highest 3rd party offers.
I can see no mention of the scoping study, its results etc in our RNS papers. And I can't see any mention of the formal agreement being negotiated or failing to be negotiated in our RNS papers. But, between 2018 and 2021 most RNS had a boiler plate bit about Suay being 'major investor and off-take partner' but this stops after June 2021's RNS - which does actually match with that Twitter photo of the unhappy Chinese people you mentioned earlier (July 2021) - even though I think they're Sino Hydro, not Suay Chin.
So Bernie can seek other offers and then has to see if Kanglongda wants to match them. That might explain why it's a 'few months' expected?
Paper- it is interesting and I am not contesting it.
However the original agreement was for 20% only. There was a possibility that they would be discussing 100% at a later date (this was back in 2017) when was a further deal concluded?
Where does 80% enter the arena?
If the market price is predetermined that should have been in the study and been the price basis for the first three years, but this is not in the study.
Lav - I'm only going by the Google translated version of that Kanglongda RNS from 25th June. It sounds from that as though the offtake agreement has been signed, is binding and is for 80%. I'm expecting that document to be fairly accurate because it's the basis for a corporate transaction, but it could be that between the stylings of Chinese documents and the vagaries of Google translate that this is not an appropriate translation or context or something -
"A binding framework agreement (hereinafter referred to as the "Offtake Framework Agreement") has been reached with KODAL, Suay Chin underwrites lithium concentrate products with a KODAL content of not less than 80%, and the price is based on the same physical and chemical properties. The market price of the product is determined, the underwriting time is 3 years, and Suay Chin has the priority to renew the contract after the expiration."
Clapa - I can't tell from that webpage when the content was written. There was a discussion here a week or so ago where people complained that the Kod website is well out of date or unclear etc. I guess my problem is that I can't find any RNS docs from Kod that give an update on the Suay Chin agreement after 2017 - either confirming the formalisation of it, extension of it or nullification of it.
From the KOD website:
"Shareholders should note that there can be no guarantee at this stage on the timing of completion of the Formal Agreement or if any such agreement will ultimately be agreed."
Paper when you look at their increase in shareholding it does not mention anything about an offtake agreement or in the study update RNS.
Maybe they are trying to do a deal? They have good access and an existing relationship, but it has to be better for the shareholders.
Makes you wonder why they do not simply buy more shares, they are still dirt cheap.
Paper, do you think the 20% agreement remains in place or the 100%?
Ivenoidea - in that recent Kanglongda RNS the google translate had a line saying "The market price of the product is determined" but I don't think it's clear whether that's a price set in 2017 when the offtake was agreed, or in the recent FS update, or if it even means the price will be the market price at time of production.
Laverda - I hear what you're saying about the big mining companies not wanting in unless they have offtake options too. That's what I'm struggling with I think - it seems like this Kanglongda sale has gone through off the back of the original Suay Chin offtake agreement still being in place [it's very specifically mentioned in their document] but what sort of deal would 'large mining interests' see if that was the case. We need funding from somewhere but in exchange for what?
Perhaps a large mining interest could theoretically buy out the offtake agreement if it's truly still in place as Kanglongda believes?
Paperdrunkwriter, yes that is it, either just before or just after Bernie said in an interview we were free agents, able to do deals in the open market.
Large mining companies would not be interested in us if we were already tied into an offtake agreement and more than one are interested.
If anyone has time to check video interviews before and after that date it will be in there.
That's my conclusion. Bernie referee to the agreement recently and it's my belief that says chin will be taking our product.
The questions are at what price and how's the mine being funded.
Do you mean this pic: https://twitter.com/KodalMinerals/status/1413130015240163336?t=xI2bECye0UhgMeR75ZcZRQ&s=19
That was taken after the 6 months exclusive MoU (with SinoHydro) would have lapsed - as per comment here https://ir.wrendesign.agency/kodal/regulatory-news/news/255
I cannot see anything about the offtake agreement with Suay Chin lapsing.
As far as I can see, our potential funding deal with Sino probably lapsed and so we still need finance but our off take agreement with Suay Chin is still in force- and is now the legal basis for the corporate takeover of Suay Chin by Kanglongda.
But, it's quite hard to search all these documents and interviews so I may be completely missing something or lots of things
I could do with a turn of luck! I don't want to tempt fate though so will say no more Lav! Come on Bernie spill the beans now, confirm what's going on in Shanghai and get this Lithium show on the road (quite literally get that Lithium out the ground and into EV batteries cruising along). GLA!
Lithboy, lol, it is not a new concept, there was an oil exploration company many years ago which slowly pumped their own well and used the proceeds to fund and develop exploration sites. You are right about the shareholders, no dilution and the shares went up into the pounds it was hugely successful. Got so big in the end it merged with other companies and became part of either the, or one of the biggest Asian oil companies. Damned if I can remember its name.