Will WRES succeed or fail27 Aug 2020 09:39
There are two very clear groups of people posting on this board, those who believe that WRES will succeed and those that say it will fail.
Those that say it will fail, are mainly people who are not invested but for some reason feel the need to continue to post negativity, the main reason that they give is the level of debt and their view that black rock will effectively force WRES into administration, some also argue that WRES cannot produce the amount of tungsten that was expected in the FID, and also that the costs per MTU stayed in the FID are in achievable.
So let’s consider each of those points:-
1. Production capabilities - it is a fact that so far we have failed to produce anywhere near the amount of tungsten that was expected, but it is also a fact that RNS’s have explained the problems that have been encountered, that fixes have been and continue to be, put in place, and that production has improved, albeit to what level we do not as yet know, so, as things stand no one can definitively state that WRES will or will not be able to reach the expected production levels, the coming months will tell.
2. Certain people state as a supposed fact that WRES cannot achieve the $94 per mtu production costs that were stated within the FID, The truth is that the FID expected a higher production cost during ramp up and then the first year of production, so, as we are still ramping up, it is hardly surprising that we are unlikely to be achieving $94 per mtu, indeed whilst we are having to alter the kit and change methods it is patently obvious that our costs per mtu will have been and for a while yet will continue to be, much higher than $94 per mtu, however it is an absolute fact that no one posting on here knows what the actual costs are, as they have not been announced, so again the coming months will tell.
3. The main argument put forward by those who say that WRES will fail is that black rock will force administration, but to me, at this stage at least, that makes no sense at all, Black rock have representatives on the board of WRES, so, they know what the actual situation is, and as people quite rightly point out, they are a hard nosed business, who want to make money, pulling the plug on WRES will not make them money it would make them a loss, and taking that decision before the company has had the time to sort out the extraction problems and complete the ramp up, would be ridiculous, if black rock did not believe WRES could succeed then they would undoubtedly pull the plug, but clearly they are not at that point yet, they are allowing WRES the time to resolve the teething problems because they must believe that WRES can and will become profitable.
The bottom line is that none of us actually know what will happen, and we can all continue to post or negative or positive views say in and day out, but it won’t change anything, only time will tell.
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