Yep up to my neck KG or as much as finances will allow but at least Ive got some Igr which has done a bit since I bought at 11c.
The more this goes on the more I'm certain there's some larger forces at work here and its all being done to suit the main tantalum off-take customer.One thing I did note from the H&B report was that they expect Gip to definitely be an extremely low cost producer and therefore have a very healthy profit margin since they will probably sell the tantalum somewhere north of $30/lb and be producing for well less than $10/lb(H&B report said $5/lb).
The off-take customer(as long as my assumption on who it is is correct)is not making nearly as much from the tantalum cap business(although there seems to be a bit of an upswing in demand from the entertainment electronics sector)due to the downsizing of tantalum caps in mobiles.Hence we are seeing them draw down on that stockpile and squeezing the sgw situation for all its worth.Still all very messy but I think one can tell now that the off-take customer is not going to bend for the sake of the sgw creditors due to their downsizing of the supermetals side of the business.
However,and its a big however,where do you think this leaves Gip?Imo it still leaves them sitting extremely pretty as they can produce the stuff for much,much less than any other potential producer,bar the illegal stuff coming from the Congo which I think is mostly tied up by the other major tantalum powder/wire producer.
Gip just has to wait on the sideline for the off-take customer to say OK its time,and to be quite honest with them knowing what the stockpile draw down rate is likely to be over the ensuing year or so its more than likely Gip know exactly when they are going to have to move on Abu D.
Its interesting to see that a drill rig is being mobilised to Allaqi just when it might be expected to hear some news on the financing for Abu D.Perhaps they are looking to some momentum from the drilling for the issue/placement for the equity balance for Abu D.Some people on HC keep saying Gip management is inept and has no idea and should be replaced.Well I still beg to differ.The whole shebang is determined by the off-take customers requirements for the tantalum as Gip cant ensure debt payback unless they are ready for the tantalum and with things as tight as they are in the supermetals division they will not want the Gip product until its needed.
However KG this is not intended as a promo for Gip and to try and get holders to stay with Gip.I too am dissappointed in the lack of information flowing from Gip for holders but its very difficult when you are talking about such an apparently incestuous supply chain within the tantalum industry and I suppose that Gip may well expect holders to tow the line in this regard.
Anything thats said is all conjecture and until more is confirmed via company annmnts and other info any in the industry that might read this info can only take it this way,not that any would anyway.Its all fairly obvious what going on and the larger players know it.
Just my thoughts as to what might be going on.I know Sabre will call me or anyone else a fool for continuing to have faith in Gip but I'm almost just holding on to see if my thinking has been close to the mark at all.I could be totally wrong and it may well be that Gip just cant get the financial attention they need to succeed with Abu D.But there are other bits of info that suggest otherwise.
Imo 3/6 months will tell us if any of this is close to the mark and we should hear something on financing very early in the piece of this time scale.I would think wtll inside 3 months anyway.
d.
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