Tolga Kumova Joins KFE, page-57

To be economic a process needs to operate continuously and at scale. The reports I have read suggest to date only batch testing of small quantities have been attempted - and I believe not actually concluded. Jumping from batch to continuous is not a simple exercise and will involve a series of pilot plants, each 5 to 10xs larger than its predecessor. Lenders will only get on board once they are comfortable a process will work, ie it will pass a completion test of "x" tpd for "y" days (eg, 1,100 tpd x 180 days, or whatever). If a commercial-scale plant of 1,000 tpd is required, then the first pilot might be 10 tpd. If that is successful, the next step up might be 100 tpd (assuming the engineers are prepared to take a 10xs step) with a commercial plant another 10xs step - assuming lenders are happy.

If an "off the shelf" process could be used, none of the above would be necessary because there would be countless analogs available to give lenders comfort. That this process is not off the shelf has been confirmed by the reference to Kogi's "IP", and various efforts to understand energy usage and operating costs. An off the shelf process would come with accepted energy and cost assumptions, ie it would require very little unique work.

Lenders do not like innovative processes. Stock standard is their bread and butter. In my opinion, Kogi will have to prove to lenders the process it plans to use will work simply because it is not stock standard.

As I said, that is my opinion. I would be interested in what UKWoody has to say given he was involved in the early investigations which determined an off the shelf process was not available.

If I am wrong, perhaps Kogi could issue a statement saying that lenders have advised them that batch tests will provide the comfort they need and that one (or more) continuous process pilot plants will not be required?