LPD (ASX) Ann: EPCM Contract Update

Originally posted by fnqricko: ↑

Hi AM74, I can't comment on the accounting side of things, all i know is what has been related in announcements, and as far as I know the concentrator was to be refurbished to allow beneficiation of the ore so obviously that would require recommissioning to allow that to happen. The money for the mine operation including the concentrator was to come from the DFC, but now we are chasing our tail since we now require PI finance to get DFC finance . hence my comment in previous posts as to where is the money coming from to refurbish the concentrator. They do have 2 mills and floatation tanks so a fair way along in equipment required for beneficiation. I went back and forth with learning to B1 about the need for the concentrator to be refurbished, he was quite adamant that they they had sufficient capacity to beneficiate the ore, and suggested I contact Joe to verify, I haven't done this because he gave the impression he had already done so, although never really admitted to doing so. They will need to beneficiate the ore to sell from Namibia and the only place will be to China, price is good though and they have north of 72,000 tonnes on the ground. If they had the ability to sell beneficiated ore they might get enough dough to run the mine to full capacity in my opinion, so why the wait.

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Hi fnqricko,

Agree. My main goal is to get a sense for how LPD might treat the ore if they are serious about export it in the near term. I follow your point that LPD has given messages that “money for the upstream will come from DFC”.

The various posts here about refurbishing the acquired concentrator do make it sound like an isolated sub-project and perhaps not the whole Namibia mine commissioning project. If so;

Speculation #1
The recent cap raise contained a funds allocation schedule so perhaps that pot can be used as a plan B for paying for a refurb. If so that’s great, but shareholders have recently got past the pain of over-paying for acquired “assets under construction” which are now the specific assets required to fulfill the recent company update. It’s odd to me.

Speculation #2
I’ll throw in a second tin foil hat speculation for some fun. It is clutching at straws … but at the same time cannot be ruled out completely, as follows;

Many small companies entering a series B funding round (pre-cashflow) frequently go in under funded. When put under pressure the small company tries to send out public messages that time is not a problem and that multiple sources of cash are available to keep the small company afloat. Perhaps the recent idea of selling Karibib ore is not serious but just a very public push back to some private conversations.

Is the small company calling the bluff of an overly enthusiastic investor or creating competitive tension between potential lenders? Of course there is absolutely no evidence to suggest this speculation is reasonable to apply to LPD … but it is no more bizarre than some of the other hysterical speculations doing the rounds in recent months.

Still plenty of risk here but hopefully the above gave you a chuckle.

Good to chat
AM74