Banter and General Comments, page-20882

Hi Md, others,

Here is some info and thoughts FWIW:


Findinggems was correct in mentioning further progress subsequent to the point in that article.
Here is an extract from the June qtrly:
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It is true, AFACT, that a true binding offtake will not be committed until (at least) product qualification is completed.
My understanding that this happens in basically several phases;
1/ Send kg to potential end-user customer so they can check chemical composition meets their requirements/expectations
2/ Send 100's of kg so they can manufacture battery component and check/assess this component is to spec
3/ Send tonnes of product so they can make a small production run of components, then to be put into battery cells for confirmation of "final product" performance/behaviour/etc.

Of course, (1) may iterate over multiple cycles until the required chemical spec is achieved and confirmed.

Then on top of all the above, the customer must be satisfied that the commercial plant (current or proposed) and the team can actually deliver consistent and reliable product at Xktpa over the contract term.
This is no simple task.
It is NOT selling crushed rock!

Anyway, I am not sure exactly where GXY sits in this process, currently.
It sounds like they are in phase (1), where they have small samples out to multiple potential end-user customers, as I am not sure if they are yet in phase (2), where they would have sent 100's of kg to one or several of them....? They could be..?
If they were into phase (2), I would have expected an announcement already, indicating that "potential customer X (named or confidential) has confirmed product chemical specification and will proceed with subsequent qualification steps", or something to that effect.
Another co I own has updated the market along these phases of qualification and sending of samples; I expect GXY would do the same, but they may not..?

I would be more concerned perhaps if GXY had only started "processing" very recently and were now shipping small samples for chem testing, and telling the market they are hopeful of an offtake soon (like some other juniors seem to be). Considering the years that they have been piloting and refining, I think GXY has a much more solid foundation in this regard and is therefore much more de-risked than it may appear at a glance.
Hopefully, we will be informed when they ship those tonnes out for the latter phase of qualification.

There are no shortcuts here; you have to go through the phases and PROVE to the customer that they are taking acceptable risk when they place their "order".

Here is a BMI snapshot that highlights some common misconceptions and is a good reminder imo that the qualification process goes beyond just the chemistry of the powder in the mail:




Some juniors seem to have their heads in the sand in this regard, AFAICT, trying to go from lab benchtop (at an external lab btw) to "finance and offtakes" without due consideration of the harsh realities and duration of this process.

Maybe that helps a bit?

Cheers


DYOR