This is some good news and does show some activity behind the...

This is some good news and does show some activity behind the scenes since the change in management. Things of a commercial nature like this take time to gestate and can't be disclosed before they are complete.

It is positive in the sense that Urbix is open to investing in Mozambique and also that there is some alignment in product from BAT's mine with Urbix's downstream processing needs. I'd imagine quite a lot of testwork has been conducted to bring the parties together in a commercial sense with this MOU.

I'd flag that this is only a MOU and not a binding agreement though. It is an agreement to work on a concept and feasibility process - so still some time to go. The disclosure is a bit scant on detail unfortunately - I would have like to have seen a bit more of the commercial terms within the MOU and the conceptual process and timelines on the study phase and what they anticipate the outcome as being (that is, will it be a local processing facility, would it be separate tot he mine build, would it involve a different mine product stream than currently envisaged by BAT, what potential commercial tie-ups between the groups could arise that would be beneficial to BAT, etc, etc).

But overall, this is pretty good news. I see mention of other diverse products - not just battery uses. That's a good thing. It's a long way down the track, but the other thing I like is that it adds some diversity to BAT's potential customer base - not just Chinese groups - with Urbix being US-based, that could open up a much broader market for BAT's product (depending on the eventual JV terms).

On the mining and power contract section - this seems a bit out of place here in this news release, but anyway, good to know. They have obviously been going over the project configuration and looking to slice out CAPEX - the US$6M is significant against the existing CAPEX estimate of US$55M. Moving these CAPEX costs from the company's balance sheet over to the contractors' balance sheet is an obvious area to look at in this exercise, but nonetheless, it does show that the new management is questioning past assumptions and getting things into better shape for the funding environment and BAT's financial capacity.

It would be really good if BAT could capitalise on the Urbix relationship and either get access to project funding via them or even potentially bring their involvement forward a bit into the mine processing side of things such that infrastructure costs and maybe plant costs could be shared/spread over the venture. I'm just thinking out loud here and not sure if there are in fact any operational synergies.