RE: Re RNS Patience Required23 May 2022 12:32
Wasa, i'm afraid I don't agree with the optimism in your projected timeframe, and increasingly don't see any construction starting here this year, with it currently impossible to say if construction would start in H1 2023, or H2 of 2023.
As you know qualification of graphite material takes time - I see no progress there in the RNS. Yes it's been shown by "testing completed with positive results received confirming a premium quality high purity graphite concentrate, also suitable for the battery anode market" but the RNS talks about marketing the material and project. In the graphite market the material itself normally undergoes qualifying tests with the individual end-users for offtakes/sales agreements for their respective end goals rather than taking a blanket statement such as the above at face value. I see none of that sort of qualification happening currently and previous non-binding agreement seem to no longer exist, suggesting they have lapsed?
Without agreed sales certainties there will be no financing - why would anyone finance anything without knowing the end product has willing buyers of material they have qualified? The graphite industry is opaque and this is a fundamental requirement and I have not seen anything to suggest ore is being extracted from Mahenge and sent to potential customers for their qualification. Indeed, when referencing BKT it's important to note how long they took to qualify their product with POSCO to reach a binding agreement: over 2 years - and that is for a lot of material and not even the entire production of their initial planned output which they are still yet to agree buyers for it appears.
While i'm still bullish on ACP with the hope MB is actually working towards an end goal, I think the timeframe/goalposts need adjusting, and investors here need patience. It was not that long ago that people were suggesting construction would have started by the end of Q1 this year, i.e. be underway now. I reiterate that construction will not happen without finance, and it seems there is still a long schedule of work to go before any finance will be received for that purpose.
ATB, GLA.
Sign In
Follow the stocks
