Hi Sparecash,
When I see a company director selling the idea in a tweet that WKT could be selling wet graphite, it alludes the processing facilities are well behind schedule where they need to consider selling wet graphite concentrate. Is there a cash flow problem which will prevent the company from operating the driers, how long is the delay expected on the drying circuit and why on earth would any director mention this as it leads to many unwanted questions.
You are even selling this as a success. What are you thinking the plant was meant to be selling dry Graphite at the start of January, Yet Mike is alluding to selling wet graphite. alarm bells should be ringing but you are that overinvested you see rainbows in every tweet.
BTW, you should go back and read the previous announcements, WKT contined to claim they were on track for the mine to be completed by the end of the year, yet this passed and we are still waiting for numerous items to get the mine completed.
@Charter1 I see the Gemcorp deal as a person going to a loan shark to borrow funds. They would have done their DD, but if things go pear shaped they can just sell the plant to someone else. If you go back and read the announcement, they are only lending around US$17mil. US$3mil has already been paid back to them in fees, then WKT borrowed money to cover the interest for the first year, IMO its likely Gemcorp still has these funds also.
BTW do you know if Gemcorps loan has been registered in Tanzania, We are yet to confirm if WKT has met this condition subsequent. the prospectus detailed that Gemcorp allowed a few draw downs of the loan, but it was up to them to allow any additional funds to be lent to WKT. It does raise the question if the mining minister was invited to the LJ mine to help speed up the registration of the loan so WKT can get the funds they need to get these critical items on site.
@Bella66 If everything goes well, Yes the Gemcorp loan should be able to be paid by the companies forecast cashflow, but if things don't work out, shareholders will need to fit the bill. You keep on forgetting WKT paid for the IIR report, its hardly independent, if the outcome isn't to WKT's liking they wouldn't have added it to their website.
Do you understand the following table.
This shows how much of an impact the graphite price has on the NPV or a change in the OPEX of the project. It doesn't take much for WKT's NPV to drop away to less than the current MC. Don't forget IIR advised the current graphite prices i already down to US$1100 per tonne and if flake loss happens the basket price will drop lower.
