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8.2¢ alliance mineral assets limited

Ann: Voluntary Suspension, page-224

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captjohn

2,410 Posts.

110

09/01/19

13:46

Post #: 37068593
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Originally posted by luanboo: ↑

The current suspension will not take into account any past history (SGX or ASX).
In my own personal opinion (with no concrete information), the suspension could bend either way.

One possible situation (negative) could be that the Burwill/JiangTe carbonate/hydroxide is a disaster (no announcement since ignition late Aug 2018) and Burwill are unable to onsell our spodumene concentrate to other converters because of the price that they bought from us. Hence, Burwill is not taking further shipments (after the last one in Nov 2018) in which the financial penalty will start to kick in (15 days after agreed schedule sometime in mid December) and moving towards breaching the offtake agreement (60 days after agreed schedule, estimated to be mid Feb). Alliance is then forced to start serious negotiation with other offtakers who are in the pipeline. This is not a good situation, as our negotiation power is greatly reduced as our key (and sole) offtaker is going to fallout of the agreement.

On the other extreme, it could be a very positive scenario whereby Alliance is planning huge increase in output from 155kpta to 300-600kpta (Fines Circuit and even DMS2). Burwill knows fully well they will not be able to absorb everything from Baldhill and definitely unable to support the expansion with more prepayments. Hence, Burwill is probably coming back to Alliance to dial back their earlier aggressive commitment for ALL output (made when spodumene prices was rising fast then) and give up their exclusive rights to avoid financial penalties and outright breaching the offtake agreement for late acceptance to delivery. Meanwhile, Alliance management has sprung into actions immediately after the merger to negotiate & signup 1 or more new offtake agreements. Given our quality products, there should not be too much of an issue to attract good offtakers at good prices, as long as we are not in a desperate situation.

Of course, there might be many possible scenarios in between.
We might have to patiently wait for the official announcement to know which scenario had happened. And while I hope the management manage to sort this out by this week, I am prepared that the suspension might be extended again. Till then, have a good day folks!

Expand

If Burwill default on paying for shipments.... A40 can escrow their shares Burwill have with A40 ....
Can A40 negotiate a deal for extra spod....look at PLS new offtakers they could buy it now while waiting for PLS to build a second stage etc......Also when Lithium gets onto the LME (london metal exchange in march/april me thinks.)...we could sell on spot market .
I'm visiting Bald Hill & Esperance in 10 days so will check how much is stockpiled.

A40 Price at posting: 25.5¢ Sentiment: Buy Disclosure: Held
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