@Fairsy sorry. I would in a more "normal" forum and perhaps there is someone else who might like to post the whole page.
The hysteria here that results from any piece of information (in its raw form) let alone any opinion that contradicts the bulls is ridiculous.
I will answer try your question of "Is it bad" though.
@Stocki has an opinion on
some of the content of pg 11. Stocki, IMO you may have left off the most important aspect, and with that, the "substance" of what is there. Agree with your math for the calculation on DSO price ... but wasn't it auctioned ... as in no OTA applying?
This is getting to the heart of what my complaint is, and that is "disclosure". Stocki writes that GS says
"they would expect a repricing clause in a contract with Yahua".
But they also write "
If legacy pricing remains in effect it would potentially apply to ~40% of sales for the first two years of Finniss production and significantly limit near-term earnings and NAV upside from the current pricing environment."
So there is considerable speculation that exists from NON-DISCLOURE. My point (all along) has been that CXO has only partially disclosed material terms of the OTA. It would have been just as simple for CXO to discllosure something along the following:
"The offtake provides for pricing linked to the market for 6.0% FOB spodumene concentrate and contains an agreed price floor
($xxx/tonne) and ceiling
($x,xxx/tonne) for the first two years,
subject to repricing upon yadayadayada"
Stocki has kindly posted the GS numbers from the report for contracts agreed in the same time frame. And to jog a few memories,
"Is it bad"? Well it certainly supports what I've been saying on CXO disclosure. Full disclosure prevents what the ASX calls a "false market" from forming. I think we have a market that is not fully informed and borderline "false". Just using myself and
@tobiasroy as "proxies" for retail investors - we are far apart in our speculation. I am much lower since I went off pricing at the time of agmt and put an upllift on that.
As far as "is it bad" for the stock price?
IMO, as an investor, the long term fundamentals are not impacted since that ceiling only applies for 2 years and any "damage" is contained to the short term. I think GS puts this as a "double whammy" due to their expectation of supply surplus coming (which I don't subscribe too ... its possible short term due to demand deferral should a severe recession occur, but that simply pushes the curve to the right ... this is secular change not cyclical). That "double whammy" sees CXO "miss out" on current high prices as they have low price from 2025.
One last thing - overlooked in all the ceiling price rhetoric - was the other question I raised as to ambiguity sourrounding "latter" and "later". GS wrote "The offtake agreement ends on the
later of Core having supplied 300kt of concentrate to Yahua, or 30 November 2023," so in their minds this OTA will be in effect until 300Kt of concentrate is supplied (how long that takes since it wont happen in the next year). That was also a point of clarification sought from CXO mgmt.
All bolding is mine. Hopefully the grammar and spelling passes the required tests imposed by some (for whom it does not apply to).
Other than that, I'd like NOT to have to revisit this subject again on this forum ... but that requires the co-operation of others and to refrain from making insults such as troll, cockroach, etc. that invite a response.
Off to the United Cup ... there's your "in" to strike when a poster isn't going to be paying attention.
