Here is the thing about a DFS. It used to be called a BFS. The key here is the 'B', which of course means Bankable. You know, take to the bank and walk out with a funding agreement blah blah.
Anyway, a DFS needs to have operating and financial metrics that come in around the +/- 10% based on some rational and comprehensive factors, deductions, and estimates. In management theory that is called the 'rational comprehensive decision making process'. Most commonly used in the Military Planning and in Mining Evaluation.
That can be done with or without 'binding' offtakes in place to meet JORC 2012 and ASX listing rules if based on reasonable factors and deductions. However, that is not good enough for most investment banks. They want more than reasonable factors and deductions. In most cases where no OTC or spot market exists, the bankers want cold hard facts. That means binding offtakes with some dollar figures adding meat to the bone.
However, if a miner is going to get their funding from an offtake financing agreement then the DFS doesn't need the 'binding' part done before hand. They just need to get it out there for other reasons like supporting the SP, or underpinning a mining licence application, or providing an operating basis for gaining an environmental certificate.
The DFS is also a highly scrutinised document that is used as an indicator about the quality of management. Competent management are always mindful of the giant pitfall that goes something like this.............. things done in haste are often a waste. Or as Shakespeare stated in one of his works: "wisely and slow; they stumble that runs fast".
So, there is no hard and fast rules about having offtakes mandatory before issuing a DFS. It is all about Management discretion and decision making. Their competence and the confidence of the market depends upon the quality of the DFS more so than any lock step contracting or funding action.
