RE: KOD`s cash not on the line over possible arbitration payments?5 Mar 2026 09:40
@elcobbledore
The discrepancy stems from the nature of concentrate sales agreements, where payments are structured in stages based on provisional versus final determinations.
The initial payment of $21.3 million, received in December 2025, represented approximately 95% of the provisional invoice value for the first shipment of spodumene concentrate (initially estimated at 28,950 tonnes, later confirmed at 28,735 dry metric tonnes).
This provisional value was calculated using estimated assays, tonnage, moisture content, and market pricing at the time of loading and departure from the port of San Pedro in November 2025—totaling around $22.4 million.However, after the vessel arrived in Hainan, China, in early January 2026, final independent assays and weighings confirmed a higher actual value for the shipment.
This adjustment accounted for:
Verified lithium oxide grade (averaging higher than initially assumed, equivalent to $1,148 per tonne for SC6 standard).
Precise dry metric tonnage.
Final shipping, insurance, and handling costs.
Potentially updated spot or index-linked pricing for spodumene concentrate during the relevant period.
As a result, the total realized value increased to $27.25 million (at $989.50 per tonne CIF), and the final payment in January 2026 covered the remaining balance plus this upward adjustment, bringing the full revenue to that amount.
Regarding the difference in receivables:
In financial reporting, trade receivables are initially recorded based on the provisional invoice (net of the initial payment, so expecting the remaining ~5% or $1.1 million). Upon final settlement, the receivables are adjusted upward to reflect the higher confirmed value, recognizing additional revenue. This is standard accounting practice under IFRS 15 for variable consideration in commodity sales, where estimates are updated as uncertainties (like assays) are resolved. If you're referring to a specific financial statement or period, the adjustment would appear as an increase in revenue and receivables in the subsequent reporting period (e.g., in the full-year results to March 31, 2026, or quarterly updates).If the company responds to your message with more details, that could provide further clarification on any company-specific factors.
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