Originally posted by Dr_Manhattan
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There was discussion on pricing, oversupply and my take away from this was James tells it straight without all the fanfare and although he said pricing is confidential, my guess is we should be careful to assume its 900us.........i think its more in the 700us to 800 us.......and thats only a quess from me.'
$700 to $800 would destroy the SP. I'm saying it right now.
When you have GXY getting $960 for at best 5.7% grade and NEO and MIN getting $961, this would be a disaster! I can not understand your logic of how $700 to $800 could fly via a peer comparison. PLS likely also confidential but they should be getting similar prices to AJM.
Hi Dr,
Just sharing my info from Brisbane's briefing
Pricing
I asked the question and James' explained that the pricing for every offtakers vary. What Ken mentioned in conference would be the true story about pricing, of which USD$900 is optimistic. With GFL, the pricing is index based on historical pricing mechanism. How that works out I do not understand, but good to note that we are on probation product which are likely to be lower sitting around USD$700-800. Our pricing won't be too far from PLS. Also, offtakers are pricing it based on mica and grade, don't care much about iron.
Funding & Debt
The Stage 2 if finalised, are looking to commence ordering lead items in January. Funding for Stage 2 will not be as difficult anymore as there are interested parties that offer lower coupon rate wanting to get into new energy space. Having said that, James also mentioned our existing debtholders have been very flexible. They understand no production and will be no breach of covenant reporting and also verified with auditors. Once nameplate hit and producing circa 18,000 tonnes per month, renegotiation of the facility will be easier as funders still have doubts and nothing management can do at this stagetill proven nameplate.
Shipments & Interested Parties
Our first shipment went to Lionergy, second went to "other" party that's interested, third shipment GFL. Others have posted 28th Nov is the vessel and it's right. 3 weeks from then will be the next scheduled. They are still working with interested parties on potential offtakes.
Margin
The margin AJM are trying to achieve is AUD 600 per tonne. At the moment the plant is running around AUD 600 per tonne which is around what they expected and presented in the graph anyway.
Takeovers/Mergers & Share Price
It was never BoD's intention to sell. James is pretty disappoited about the share price as well but there are other external factors that are just out of management's control. Citi is still appointed advisors of AJM and paid 0 dollar until a transaction occurs so no money spent on engaging them.
Region, Neighbours' Discussions and Customers
AJM works closely with neighbors and very much wish Pilgangoora producers successful business as they're in the hotspot and sharing infrastructure with PLS and MIN. Shared downstream processing was discussed before, but Australia will never be able to achieve competitive advantage of China so it won't be anytime soon for AJM/PLS at least. Everybody knows everybody in China, the way management dealt with JRO was a good, and that presented well to GFL.
Miscellaneous
It's always a misconception that management doesn't do anything. Truth is they're always out in the market and work closely with potential offtakers. They are continuining to fill enquiries too.
All of the above are from my memory and could potentially contain errors in some part of information.
Please correct me if anyone finds errors presented here. I was paying full attention but I was up since 5am and 40km pushbike commute, so my focus surely wasn't at peak performance.
Thank you.
