Also it should be mentioned the deposit from Jinhui of “US$4.5million was made against future delivery of lithium concentrate, which depletes by adjustment of the price of the purchase price using a depletion factor of US$40 per tonne.” ”The purchase price for lithium concentrate is determined as of the first day of each month calculated as a percentage of the 30-day moving average price of 99.5% lithium carbonate as published by Asian Metals (the “Benchmark”).”
So back of the envelope math:
Payment for the 1st shipment of 30kt’s is broken up into 2 parts. 1st payment derived from deposit of US$40/t = US$1.2m and second part of payment coming into the DL treasury in May. The second payment was for C$3.8m. Historical data on the Canadian exchange rate on the 10th of May 2018:- US$1 = C$1.2773. $3.8m/1.2773 = US$2.975m. US$2.975m/30kt’s = US$99.167
Total payments = US$99.167 + US$40 = US$139.167 About US$140/t for 30kt’s = US$4.2m per shipment.
Linking back to the arbitration and total amount of US$4.5m Jinhui is seeking should also consider the US$40/t x 30kt’s should be taken of the deposit amount. US$4.5m - US$1.2m = US$3.3m IMO Jinhui hasn’t a leg to stand on and if going through the arbitration process set down for early November I would consider LPD’s/DL position to have a strong case against Jinhui in the counter claim.
(20min delay)
