Line the discussion re the Alcoa JV and the considerations of it going or not going ahead and the implications.
Just my opinion, but I'd put it at about a 95% chance of it going ahead, possibly more based on all that I have mentioned previously.
Alcoa is sold on FYI, the JV and our product - the part where there is a chance of it falling over clearly are the commercial terms.
We've been talking to Alcoa pre the first pilot run and they were sold on us after the first run. Bottom line is these commercial term discussions must be somewhat agreed on 'in principle now' pending this last pilot run and confirmation of some KPI's from it, validation etc.
Alcoa is desperate to get into the HPA space. It's not like this is just another gold deposit or type of deposit where they are popping up everywhere and Alcoa can be picky and just ship at the last minute for a better deal elsewhere. It's HPA, really hard to produce at high quality. What are there other options realistically to get into the space that are as advanced as FYI? A4N are getting there but are in bed with Orica and will have a reliance on 3rd part for feedstock. ATC is a basketcase as we know and endless reasons with their strategy and not an option for Alcoa.
We are it.
I've heard they have even tried to go alone and get into the HPA space and without knowing any detail around that they haven't been successful.
Now, to be balanced - let's say Alcoa (or FYI) do a backflip and decide the JV is not the way ahead. (Again, I put that at a 5% or less chance).
FYI will be fine, we have a fantastic project and all of the work we are pushing forward on is FYI's. All of the samples to potential offtake partners, the European Partner, is ours. All of the Research and Development, the Kaolin Deposit, the pilot plant, years of discussions with financiers, offtake customers, the work with the Battery Research Group in WA, the Kwinana site, the approvals to mine and put a plant on our site, it's ours.
In other words, we will have a very viable, profitable project anyway.
Basically all of the above is progressing regardless of Alcoa and would continue to do so.
And at our current market cap I think most of us would agree that the JV with Alcoa isn't priced into the share price at all. Or that's certainly my view anyway.
If we jumped to a 250m market cap leading up to the JV and then it fell over, sure, you would expect quite a drop in the short term until plan B was evident.
What we'd miss out on if the JV fell over is the 1+1=3 (as Roly says). On our own, we'd have a good profitable plant producing a great HPA product.
The bit we'd miss out on could be the other opportunities they are bringing to the table that will make us the number one HPA strategy globally. This other 'stuff' isn't clear yet but what they could bring is much more annual production, other contacts, other HPA opportunities, more economical project numbers, massive balance sheet to go big quickly, etc etc.
So the bottom line is a JV opens up many doors for us in the HPA space, but we are going to be a success regardless - it's not a JV or bust, not even anywhere near it.
Just my thoughts.
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