We needed to send 20kt @ 5.5% in the May shipment to complete the old contract.
So far 25kt of the contract has been filled (10kt on NY Trader, 13.7kt on Blessing which was within minus 10% of a 15kt contract)
"Galaxy Resources Limited (ASX: GXY) (“Galaxy” or the “Company”) is pleased to announce that it has successfully completed 2016 offtake supply obligations (contracted at 15,000dmt plus/minus ten percent) for its second customer. The MV Blessing SW sailed for China on 1 March 2017, with 13,700dmt of lithium concentrate."
Notice that it is still plus or minus 10% for the last customer for 20kt thus delivering 18kt is sufficient hence using OpTimus Prime as he can carry spot on 18kt for the next and final shipment for 2016 contracts
Delivering less on lower priced legacy contracts leaves more for the spot market and 2017 contract. For instance, the company can sell 1.3kt not delivered on the second shipment at a higher price now. Notice that shipment had a grade of 5.71% which equates to US$861.5 per tonne.
Compared to US$600/t, selling 1.3 + 2kt (TPrime) for US$261.5 more per tonne gives you US$0.86mio in extra EBITDA
Sounds like a great strategy to me
GXY Price at posting:
46.5¢ Sentiment: Buy Disclosure: Held
