Sorry @CYMON maybe the language I used didn't clarify the reason for stating that the first rights could cripple the company.
I have long been curious about the effects that the first rights clause would have.. Many were chastised when any concerns about it were raised.
Let me make this clear.. My post's are not an I told you so.. It would be hard enough looking at the current share price movement.
I genuinely feel sorry for anyone that was not aware of this condition in the Pilgangoora sale. It was surprising on twitter when what appears to be a close follower of Pilbara responded with this.. - This is not a flame, there is a very good point.. I have used the tweet rather than a screen shot, so that if the user doesn't like it showing here they can choose to delete the tweet entirely. But again, there is a good point to all this.
I honestly considered the first right of refusal to be the Ace of spades in any attempt to downramp Pilbara.. And it turns out no one really knew about it..
Reply: (Some may wish to see the clause screen shot for them self)
My point is, that there was not very much said about it by the company. You would need to look really hard to find it which makes me wonder if good business ethics have been use.
There was an investor presentation that only mentioned it on the tantalum which essentially insinuated that maybe there was no first clause on the spodumene and when the deal was completed for Pilgangoora's acquisition maybe Pilbara forgot to update the market...
But it wasn't to be.
Maybe the group of 'like minded individuals' may become group of we are suing your arse for not being clear... Maybe... who knows.. Only they can decide.. Maybe there would be a good claim to be made.. I am not providing legal advice.. Just presenting a different view.
Returning to my point that this could cripple the company.. Its correct.. However it does appear that the offer that PLS are running with is a multi year agreement with General Lithium on the other end, and allowing for the potential for vertical integration. - To answer your later question @CYMON building a processing plant does not side step the rights that GAM/MIN have to the spodumene in the ground at Pilgangoora.
The multi year agreement is a good way to get around having to go to GAM/MIN every time they want to sign an agreement, that would definitely remove the ability to come to an agreement such as the one that has been presented with General Lithium. - However just say GAM/MIN say, ok you win this time we will let you just pay us a 2.5% on the spodumene. This is very complex.. how does that get worked out? We know that lithium prices are moving upwards and to the point that contracts are lucky to be month by month. It could be argued that Pilbara are trying to rip off the first right holders..
I can present so many angles that GAM/MIN can come from and they can take this higher and higher which delays any progress Pilbara have of getting a mine built let alone selling anything. - ie.. Finance... The mine wont be built by General Lithium nor will it be made for free unless investors are that keen they offer their time and experience.
Just say Pilbara do release their DFS and then my some miracle are able to finance Pilgangoora and commence ramping up.. GAM/MIN can block the movement of any stock off the mine site..
Ganfeng will be very serious about blocking Pilbara at any turn.. - Pilbara and its management will be flooded with paperwork and notices injuctions you name it..
I think it is not right to play down the ramifications that are likely to occur from here. - It would be as blind as disregarding any other time that this right of refusal was presented by the down rampers in the past.
Hopefully this is seen as an informative post that presents a different view rather than any form of downramping. - Sure, I don't have shares in the company.. Does that make me a bad investor?
Time will be the judge.
I really hope this doesn't slow the progress of electric cars ramping up, as another mine is torpedo'd
(20min delay)