Ann: Beyondie SOP Project - Activities Update, page-65

Contracts are very complicated. We are not privy to the contract clauses between KLL and Ebtech.

You've quoted the following company announcement perhaps to put forward your point/belief that Ebtech are entirely responsible (both contractually and monetarily) for successful production:

"Ebtec’s contract includes performance guarantees to ensure the quality of SOP production is in line with the requirements of the K+S Offtake Agreement and includes liquidated damages for performance and schedule.The contract also includes a bonus arrangement."

My work involves dealing with works contracts on a daily basis. Based on my experience I would have to disagree with the point you are trying to make that Ebtech are bound contractually to "get this happening yesterday". It isnt as simple as you may think it is - let me explain.

Now without actually seeing the contract clauses the fact of the matter is that interpretation of the above sentance could be argued by Ebtech that they have in fact acheived their contractual obligations. That is, it may very well be the case that Ebtec have constructed the plant to allow output of XXXTonnnes of SOP / year. The ability of the plant to actually produce XXXtonnes SOP/year depends on many factors outside of Ebtec's control, including the SOP feedstock. My experience shows that Ebtec would not willfully "get this happening yesterday" at their own cost, especially if they are of the opinion they have met their contractural obligations, of which, I am of the opinion they probably have. Ebtec would never take on the contractural risk of ensuring XXX Tonnes of SOP/year is produced - there is no benefit for them to do so (that is, the more the plant produces - then no extra profit would go their way). I have never heard of a Design and Construct contract which would be done this way, nor would I know of any Construction mob to sign up to something so ridiculous. The bottom line is, the risk of producing SOP stays with the proponent - KLL. They are the ones to benefit from a successful operation. Sure KLL could argue this (which I am sure they have tried), but it would end up in court (happens often actually) which would take some time, and it wouldn't guarantee KLL would be successful (in fact for the points mentioned above, KLL would likely not be successful).

It is of my opinion that if Ebtec are undertaking "rectifications", then they are definitely getting paid for it as a variation to the contract. Furthermore, I beleive it is highly likely the recent cap raise money (or at least a portion of it) would be getting used for this very purpose.

Bottom line is, I think you may be incorrect to assume that Ebtec are fixing things out their at their own cost.

All IMO, DYOR guys.