RE: The strategy here2 Jun 2020 15:42
My two cents:
1. I don't think anyone is knocking on the door to buy KOD outright.
2. A risk is that in the eyes of institutional investors that world Li demand can be met by existing players in the market. This reduces likely funding options to SC who have according to BA expressed interest in funding KOD to production. Institutional investors will stay away until a better DFS, JORC, LOM is show which = more drilling which = more cash burn of cash KOD don't have so it looks SC funded or bust to me at thi stage.
3. IF SC has access to sufficient capital AND spod quality from Buogouni is matched to Ruifu (whom SC wish to supply and (which bulk sample work to date indicates is the case) conversion then its a question of whether Ruifu have an alternative suitable supply identified which would influence product price and hence OTA and hence NPV. This will unfold as OTA is signed and released as RNS.
for the reasons above I maintain that only SC funding will move us forward as it removes the need for further expensive work to expand JORC, LOM and produce DFS for traditional funding sources which are not yet convinced there is inadequate spod supply in place. So SC funded or not at all I think.
4. IF SC have capital AND IF SC are confident their immediate supply needs are met THEN they may take the view that any profit during the first few years of production may be used to drill further, expand JORC and produce updated IRR calcs and better NPV as they go along. With a large stake and a board presence they will have influence in this regard.
This makes most sense to me as they have the opportunity to make money from supply chain via OTA and build share valve through resource expansion which gives them the opportunity to sell a chunk at such time as the financials support more traditional funding entities. This would be a few years down the road at which point the value to product will be better understood as EV and storage uptake increases.
Just a few thoughts.
Other than that our situation remains unchanged.
Sign In
Follow the stocks
