Ann: Beyondie SOP Project - Operations Update, page-130

Not sure how much Kimu or anyone else has made from KLL but I hope everyone has done well. Maybe I can have a go at explaining why the SP may not lift when production begins. I did forecast that share price was going to go below 20 cents before it went above 30 and that happened and over at HIO told them that the SP was going to go below 8 cents when it was much higher and that happened as well which of course some people don't like to hear in advance but hey it doesn't really matter - the crystal ball has been on a roll lately. The foll0wing and probably more needs to happen:


Internal factors

• Show that cash flow has started. We don't know the contract payment terms other than them being FOB so it could be a while before money starts flowing. FOB is good for KLL due to increasing shipping costs
• Prove that production of SOP is being done to the quality levels required
• Prove reliability of the production facility. The last thing anyone wants is an announcement that production has been halted whilst they fix some problem even if it is minor
• Prove that production volume forecasts can be met or exceeded. This is a big one because if they can squeeze more out of the production facility than forecasted it normally has a positive impact on the share price. Which shareholder wouldn't like to see an announcement that KLL has exceeded production output forecasts
• Confirm that transport to the port has been secured and that the cost of the transport has not increased

External Factors

• SOP market prices don't fall. All of the internal factors can happen but if the SOP price falls then the profitability of KLL will suffer. It can go the other way as well of course and man do I hope that happens.
• Exchange rate movements in the wrong direction can have a large impact on profitability as well. Actually I'm not sure if KLL negotiated to be paid in AUD to reduce exposure to currency fluctuations which if they did then well done to them but I doubt it.

Remember that the SP has more or less already factored in that production will start in September or was that September/October or October, who knows but it's supposed to be one of those dates and if that doesn't happen then the SP is at risk. Cheers.