Your message highlights some of the issues. Yes I agree a Jr. Graphite Mining Company must have a offtake agreement in order to get the financing.
Here are my comments to you and all your Australian Mate's
My issue is MOU are not binding offtake agreements. I like to see binding offtake agreements and most importantly how will the pricing formula work between Graphite Mining Company and the offtake buyer? Should the offtake agreement be a take or pay contract? Currently there is too must risks on the graphite Mining company that has to offer a big discount to a offtake buyer and if the market price the buyer is willing to pay is below the Graphite Mining Companies cost them why happens?
Another issue is mining and flotation costs I do not believe the Jr Graphite Mining Companies know what their true or real cost of mining and flotation costs are correct. Graphite mining is an art.
Another issue is capacity? I do not believe a graphite mine having 40,000 to 80,000 tons of capacity will be able to sell out it capacity unless it has a firm offtake contract with a battery anode producers for alt least 80% of it annual capacity. My question to you and others is what do you believe is the current demand for Spherical Purified Natural Flake Battery Grade Graphite?
What do you and others believe will be the demand for Spherical Purified Natural Flake Battery Grade Graphite per year by 2018?
Another issue is management. Do you trust and believe that these Jr Graphite Mining Companies have the right managers and personnel to get to the end goal of building a profitable Graphite Mining Business? I believe they spend shareholders money like it is printed on trees. I have yet to see a Jr Graphite Mining Company spend their Shareholders money in the right places.
Jeded,
Ask yourself this question if non of the companies you mention have the financing today how do you expect them to have a graphite mine in operation by 2017? Do you realize that it will take at least 3 years to build a new graphite mine in Africa. Africa is not a easy place to do business in and getting a mine built takes a long time in Africa.
I have been around the mining industry for a very long time and have learned what is fact and what is a lot bullshit. Most of what you and I read is bullshit.
