2021 - General Discussion, page-2495

I agree 100%, and as someone said, it's not us that needs a backup plan it's Alcoa.

For a fortune 500 company, the Worlds biggest alumina producer not to get into HPA would be like Apple only making computers. Alcoa looked at all the HPA wannabe's and settled on us with a MOU and more recently an exclusivity agreement. In this modern age they need to be seen to be environment friendly, a bit hard when you smelt bauxite to produce your product. HPA is the perfect "green" product to enhance their image, they can put pictures of Tesla's on their presentations.

I think the hard thing, is to come up with is a JV beneficial to both parties at agreeable terms.

Another company I own have just been thru a similar thing. They hired Macquarie to negotiate the best deal they could get. They have a shovel ready lithium mine in Mali with a NPV similar to ours & capex also very similar. The deal they settled on was Ganfeng paid US$130m into a 50/50 JV vehicle & will organise a joint loan for the rest of the capex.

To most holders reading this, it will sound too cheap and I initially thought so too. But what is most important is the long term, not the short term cash payment. In this case their partner is the largest lithium producer in the World, they have 100% offtake & most importantly the project is fully funded.

I think Roly will take notice of this deal. We already have the biggest alumina producer in the World as a potential partner. I tend to think what is most important is how this JV sets us up for the future. Are we better off getting a bigger upfront cash payment, or better terms for the long run? Remember our NPV on this one project is over US$1b, having favourable terms over this and potentially other projects will be far more financially rewarding than a slightly bigger upfront cash payment at this stage of the project.

Another thing to consider, does Roly have professional negotiators? You can bet your bottom dollar Alcoa will have.