-SK-81 The DFS will be more likely be written to advance finance funding while the detail should remain conservative. The DFS will demonstrate its capacity to operate in both robust and price tension markets. Price tension occurs in an over supplied market where commonly referred to as a "Price Takers Market"
A Price Takers Market is an individual or company that must except prevailing prices in a market ,lacking the market share to influence market prices on it's own. All economic participants are considered to be price-takers in a market of perfect competition,or one in which all companies sell an identical product ,there are no barriers to entry or exit. every company has a relatively small market share,and all buyers have full information of the market. This holds true for producers and consumers of goods and services and for buyers and sellers in debt and equity market's.
A price makers market is where supply is limited with no reasonable substitute.A free enterprise system where prices are greatly determined by supply and demand. Buyers and sellers exert influence over prices resulting in a state of equilibrium. How ever in a monopolistic environment ,one company has absolute control the supply released into the market allowing that business to dictate prices. (Research note Investopedia)
Management have a strategy to grow into known markets but what truly gives us appeal...What differentiates us from peers to build a compelling business case among other reasonable projects.It's not resource size,it's not high volume high NPV projects with high start up capex, It's not grade alone and it's not being highly suited to just one or 2 or 3 markets. Battery,refractory or cubicle...
To differentiate you must demonstrate a difference that the market requires and if you need to differentiate it needs to have a purpose. Recap it's not grade alone....Grade alone such as high grade can be found at SYR. We have high grade as well but what differentiates us... What differentiates Lindi graphite is the distribution of basket that is suitable for alternative premium markets. Premium markets from expandable and niche markets that others can not produce. Distribution is the make up of your basket ranked in flake size and delivered as graphite content. Dried and packed in bags ready for market.
Lindi is going to deliver 4 flake sizes as follows with 75% of basket suitable for expandable and niche markets. Current supply and markets are constrained by lack of supply. While to differentiate Lindi graphite is rated best in class limited in nature and not under pinned by lower priced vanilla markets refractory markets and cubicle...Assuming binding agreements are required for 30,000 tons for time limit a discount will be applied to prevailing markets. First to market will gain advantage with a price makers mentality for any other expansion potential beyond 30,000 tons per annum.
You can rest assured that management are fully versed on this concept and why we need to better understand why growing into known markets offers extra value. Build the plant and they will come...How long to build a position at 180-200 TPA is not beyond the resource and not even close if required IMO. To extract value the concept of growing into known markets may disappoint those looking for high NPV projects but applying the business man suit the strategy is almost perfect...It just can not happen soon enough
This plant and resource will deliver at highest margin's per ton mined at the lowest capital intensity per ton mined.The new DFS has not even arrived yet but the kicker IMO will be mobilastion along first RAP payment,binding agreements for 30,000 ton's.
Conservative but spectacular mitigated with a unique product differentiating into premium expandable and niche markets into developing markets limited by supply .
Croc out riding a Bull's "22 second's last time..."
Conservative but spectacular mitigated with a unique product differentiating into premium expandable and niche markets into developing markets limited by supply .
(20min delay)
