Stirer I don't believe there will be any free cash margins for Gemcorp or Shareholders.
I did incorrectly quote the December 2023 IRR report I overstated the free cash flow (sweeps) at US$20mil it was forecast to be US$6-8mil
Instead of being granted options and shares to benefit in the upside (and hence shareholders will not be diluted), Gemcorp shall be entitled to ~30% of free cash flow (after debt servicing) during the term of the loan - our modelling indicates that this will be in the order of US$6 million to US$8 million (with the term including FY24, which is largely construction and commissioning).
@Farmdownsouth "Perhaps Gemcorp lacks confidence that there will be any free cash to swoop"That is what I was thinking,
As you would know WKT expected the plant to be up and running in January, The mine is still undergoing improvements and the EPC contractors haven't achieved the 48 hours of continuous production. Plus we now know WKT has needed to draw down on the US$5mil back up funding. All of these will have a impact on the free cash margins over the term of the agreement.
I am still amazed that these guys think the Jumbo graphite flakes are going to magically appear. If WKT is already achieving 87% recovery of the contained graphite and the finished TGC grade of the concentrate is only 92% (with some runs achieving 95%), achieving a higher TGC grade of the graphite concentrate requires additional grinding/polishing, which will further reduce the flake size. (SYR is a perfect example)
@sirrobbo added a Tweet yesterday which shows what I can only assume is 2 bags of Jumbo Graphite, If WKT has already achieved the DFS recovery of the contained graphite, but the purity and flake size is already below the DFS forecast levels, I cannot see WKT achieving their 49% of Jumbos when they require additional processing,@Croc-file mentioned SYR needed numerous stages of additional processing to achieve the 94-95% TGC purity, which resulted in the company producing predominantly Fines (low-value graphite).
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