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8.2¢ alliance mineral assets limited

Hi Buzz, yes expanded production, as per your previous post ""If...

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Names little

9,332 Posts.

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05/01/19

09:24

Post #: 37031047
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Originally posted by Buzz Roman ↑

Originally posted by Names little
Hi Rick, it would be nice if they were forced to match it at at a higher price but given the current weakness in Lithium prices it may in fact be at a lower price.

Basically with their right of first refusal Burwill can just wait to see what other parties are willing to agree to and then just say we will match it or decline to. Note, it's likely not only price but all conditions of the proposed agreement arrangements that they would need to match, eg any prepayments etc.

So if there is a third party involved all these terms of the proposed arrangement would need to be agreed first with the third party, then presented to Burwill for their consideration and decision on whether they will match it. If they decide against matching it then back to third party for signing. Any changes prior to signing would likely mean the changes would then need to go back to Burwill for re-consideration of their right to match it once again.

The MIN right of first refusal over PLS product is a classic case in how messy things can get, court cases over what terms were allowed to be included etc, in the end an agreement was reach cancelling the right of first refusal with a equity payment to MIN for agreeing to do so.

https://hotcopper.com.au/documentdownload?id=uOMxKKzFkiWRTLKhOROKAxjvFDZpi1nay0P+v/pw8cAjSrnIG44RXhVlIg/1lg==

So unless A40 can find someone willing to pay higher prices then there is no reason to believe Burwill will need to match a higher price, in a declining Lithium price market it's even possible they just sit and wait to see what prices are offered and then match at the highest lower price if they want the volume.

But all possibly adds to the complexity of the negotiations and time needed for consideration, legal eagles reviews etc.

Strange timing for the negotiations over Christmas/New Year period, makes one wonder if it was at a time of the companies choosing or was their hand forced by other parties/factors.

Oops, nearly forgot to add, all in my very humble opinion of course.

Happy New Year.
Are we referring to the clause for expanded production?

Because the last mention of the specific term "right of first refusal" was in SGX:40F announcement on 05/10/17 for the following term:
"2.7 AMAL shall sell all of its share of production of lithium concentrate to Burwill on an annual basis, up to 40,000 tonnes. Thereafter, Burwill has a right of first refusal to purchase the excess lithium concentrate produced (if any). Burwill has exercised its right to purchase all excess lithium concentrate produced (if any) for the first 2 years."

However, the above term was removed as part of a follow up announcement on SGX:40F on 31/10/17:
"2.3 Paragraph 2.7 of the 2 October 2017 announcement has been deleted. Instead, AMAL shall sell all of its share of production of lithium concentrate of a grade of at least 5.5% to Burwill until 31 December 2022 in accordance with the provisions of the Amended Offtake Agreement. Thereafter, the parties shall negotiate the terms of sale of lithium concentrate to Burwill."

There is also no mention of ROFR in the scheme booklet.

Expand

Hi Buzz, yes expanded production, as per your previous post

""If the processing plant at the Bald Hill Project is expanded, Lithco must give BLCL a written offer to provide anintegrated offtake and funding solution for the proposed expansion. If BLCL rejects the offer Lithco is able toenter into an agreement to give effect to the arrangement contemplated in the offer and sell any additionalvolumes of the product to third parties without breaching its obligations to BLCL."

https://hotcopper.com.au/threads/an...4596325/page-14?post_id=37029348#.XC_ZndHZWhA

Sounds like right of first refusal to me even if those words aren't used. Would also fit in with the negotiations to existing Off take arrangements, as you say, that clause is in the current Off take agreement.

By the way, did we get any details on that amended Off take agreement you mention in your post "in accordance with the provisions of the Amended Offtake Agreement." Curious what else may have been amended?

Do you have any thoughts on why negotiations are happening over the Christmas/New Year period, thought they might have wanted a bit of a break after all the merger stuff.

And let's hope we get our next shipment away to Burwill soon under the existing Off take arrangement.

Thanks

A40 Price at posting: 25.5¢ Sentiment: None Disclosure: Held
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