Alchemist, I agree. That's why I invested. VRX has the potential to be a high margin play that pays a long tail premium dividend in a industry with rising demand and supply constraints in Asia.
Canabombers, I've seen lots of people on these threads complaining about delays in offtakes. I understand the frustration. Would I like the offtake to have been finalised in December, hell yeah. I agree Bruce should have not put a timeline on it, that was a rookie error. Does it matter if a deal is done by June or August, not if's it's a premium deal. I do believe that VRX is elephant hunting with quality partners. I would much rather get one quality off take partner at a time and get good margin. Dealing with a tier 1 Japanese or Korean multinational is a great outcome if it's achieved and affords a premium multiple for the SP. Getting a dodgy offtake with a tier 3 Chinese company based on some hokey fluctuating index would be a "sell into the news" criteria for me. The process that the company is going through looks like they are following a methodical process that will secure a good long term partner.
These things take time. The complexities of securing any tier 1 customer isn't a matter of just saying here is a spec sheet, sign on the dotted line, press hard and the third copy is yours. It involves ESG compliance, technical, financial DD, auditing permits, agreeing pricing structures, agreeing a plethora of legal terms and scenarios, agreeing offtake periods, penalties for off spec cargoes, and international law (to name a few). All the while they are dealing with covid outbreaks in Asia, and each party has to deal with the cultural and language barriers while operating remotely.
If Bruce secures a quality deal at a premium to the BFS, the delay will be a distant memory, he will be the hero and we will all be fat, dumb and happy with our 15 - 30 c shares.. Time will tell, but I'd say VRX is a high probability bet.
VRX Price at posting:
26.0¢ Sentiment: Buy Disclosure: Held
