| | | I too am interested in the mechanics behind the regulator confusion relating to materiality of a graphite specific price quote with corresponding market depth for a specific high purity graphite sector.
The price quote was not called into question nor was the market depth information. The issue arose in the terminology that is used as a matter of course in the industry but not recognized by the regulators within 43-101 framing and secondly that the pricing in itself is an economic assessment which by definition must be presented in a PEA format where all economic variables are presented together in order to properly weight the pricing. In isolation, pricing may look to be extremely favourable when that might only hold true if costs were also favourable, lacking the costs variable, price quotes would be restricted to the PEA format. OK, we can all get that but as evidenced in the Albany PEA, it was certainly a reasonable decision about materiality of the price letter considering others quote prices without all costs being framed …….. i.e. Albany LIB pricing.
Zenyatta has a problem now …………. as clearly the regulator clarification applies to the Albany pricing table as well.
Zenyatta announced on Feb.12 that they had to shape and coat the graphite in order to be tested for LIB while the PEA does not provide any cost metrics for shaping and coating the graphite in order to secure the pricing they list for LIB.
One might suggest that uncoated Albany graphite can command the prices that are quoted, however, due to the earlier disclosure of the Albany graphite requiring shaping and coating in order to achieve the required performance characteristics for LIB, and it seems very clear that the prices that are quoted in the PEA are in combination for materials that meet those performance characteristic test, hence, shaped and coated averaged with uncoated material for the primary battery market (?) ………….. $12,000 is a very suspect number for Albany graphite.
Since the PEA only includes processing to the point of requiring shaping and coating, the actual price point might be very close to the $4,000 level rather than the $12,000 average being used and that would skew the numbers greatly, requiring a complete restatement of the PEA in my opinion.
Either that or the PEA would require restatement with all costs associated to shaping and coating being included in order that the pricing table be properly reflective with regards to LIB pricing.
Adding that CAPEX, OPEX to the economic assessment would surely skew the current numbers greatly. |
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