Yes Prime1 many here do not seem to realise that to get a MOU/Binding Offtake converted into graphite's point of "Take or Pay" BOA, the one required for Bank Finance, requires a Sellers Commitment too.
That commitment quid pro quo to the Buyer who is to pay X/Tonne for Y quantity of Z qualities is that by a particular date, a Quarter not a YEAR, the Seller Mine will have produced said Y kts with Exactly those Z qualities and specifications. ie
Buyer contracts $$$ and Mine contracts TIME. If there's Nothing to Take the buyer don't Pay and in fact sue for damages, break of contract.
Now to a already Operational mine that's just Business.
But to a mine wanting finance to Build the Plant to provide the Production with all the additional time line schedule to that Delivery Date for the Take and Pay ? Have to be a Nightmare, hey?
I suppose it'd depend on who one had the OffTake with? How the pricing negotiations were conducted as in did the OffTaker get a Bargain Pricing ? Can clauses with the Mine saying All care and efforts but no responsibility to actually deliver by June 30 2017? Can the mine get Insurance against delays, their Non Performance?
Don't ask me. Especially for a Mine proposing to produce at 200kts++,more than double any Existing Mine in China or Brazil.
Guess we just have to wait for the SYR DFS and the offtake 'firming' of the MOUs into Bank Finance all by ?
Is it June/July 2015 Prime1?
exciting for the Market.
I'll link this @pavbar Prime. He seems to know something about Offtakes for Guarantees of Bank Finance.
Hope he can add to the discussion.
