We will have to agree to disagree as I can find nothing that covers the sales (profits) being paid whilst Leo Lithium / Ganfeng are in the transition of the sale of the remaining 40% until completion. ~ Until the final payments in full have been paid, LLL remains a percentage owner of MLBV and as such (opinion) profit from sales should be dispersed according to % ownership.
The Trailing Product Sales Fee (TPSF) is for:
Sale of offtake rights As Leo is selling its interest in Goulamina, it will also terminating the Cooperation Agreement (first announced on 29 May 2023) with Ganfeng, including giving up the Company's contractual rights to offtake from the future expansions at Goulamina of Stage 2 and Stage 3. Ganfeng has agreed to pay the Company a trailing product sales fee (TPSF) in respect to termination of these offtake rights.
The TPSF will be paid to the Company upon commencement of first commercial production at Goulamina and is structured as follows: • 1.5% of the gross revenue received from the sale of lithium products from Goulamina Stage 1, by reference to the Ganfeng offtake agreement, subject to volume cap of 500,000 tonnes of spodumene concentrate per annum; and • valid over a 20 year period, commencing from first commercial shipment.
What we are giving up under the Cooperation Agreement
Goulamina Stage 2 With an enlarged Goulamina Stage 2 capacity and potential for a downstream conversion facility, Leo Lithium and Ganfeng have agreed to clarify and vary the Lithium Offtake Agreement with regard to Stage 2 production product. Based on Goulamina Stage 2 capacity of 500,000 tonnes per annum, the parties have agreed;
What does the respective TPSF look like versus what the offtake could have been:
TPSF cap of 500,000t per annum ~ using US$1,000t pricing = 500,000 x US$1,000 = US$500,000,000 x 1.5% = US$7.5m per annum x 20 years = US$150m total
Offtake Rights 150,000 per annum, ~ using US$1,000t pricing = 150,000 x US$1,000 = US$150m per annum (for life of mine commencing on completion of stage 2 expansion)
cheers ++ more than happy to be corrected, getting my second coffee now, lol
LLL Price at posting:
50.5¢ Sentiment: Hold Disclosure: Held
(20min delay)