Hotdog
I am not really sure what more shareholders could expect from the announcement.
There are some comments in both announcements which give me some comfort.
They say they are still in discussions with financiers and offtake parties - if they are not they would be in a world of regulatory pain so we have to assume there are meaningful ongoing negotiations underway.
- "During the quarter, the Company progressed discussions with project financiers, many of whom have been engaged with Australian Mines regarding financing the Sconi Project since the Bankable Feasibility Study5 was published in the first half of financial year 2019. These discussions include ensuring the price mechanism included in any binding offtake agreement is acceptable to all parties and maximises value for Australian Mines’ shareholders."
- Australian Mines is continuing to advance offtake negotiations with a number of potential partners with these discussions covering the full range of battery precursor chemicals that have successfully been produced at Sconi"
"Based on conversations to date with various potential offtake partners, and given the individual demand outlined by each party, it appears more probable that Australian Mines will sign an offtake with a single party for 100% of the annual output from the Sconi Project rather than a series of offtake agreements with multiple parties."
To m
e the statement
"given the individual demand outlined by each party, it appears more probable that Australian Mines will sign an offtake with a single party for 100% of the annual output from the Sconi Project" is a fairly solid suggestion that they are possibly getting close to something to make a statement like that.
"There are a limited number of industry participants with the technical sophistication to supply P-CAM for the 811 battery chemistry and the recent success by Australian Mines moves the Company one step closer to joining these industry leaders."
"Importantly, the nickel, cobalt and manganese used in the production of all three P-CAM products were sourced exclusively from the Company’s Sconi Project, confirming that the Sconi ore body is capable of supporting production of NCM P-CAM from a single source"This is certainly not a negative in any negotiations they are undertaking and would have to add to the attractiveness of the package they are seeking to market.
I acknowledge that frustrated shareholders and others will see these statements as more of the same - and accuse those like me who see some positives in the statements as having "rose coloured glasses" - but I fall back on the simple fact AUZ cannot give a blow by blow account of negotiations, they can't disclose who they are talking to / progress.
For me there is enough in the announcement to confirm that they are still in negotiations with financiers and offtake parties, we know the project economics are attractive albeit with a large capital requirement, as is the domicile, the resources Sconi has right now are being sought around the world, the samples produced apparently are attractive in their composition and single source P-CAM supply is certainly not a negative.
Shareholders can only evaluate AUZ on the information available through the lens of the risk profiles they adopt for their investments and if remaining as shareholders then rely on the Board to continue negotiations and await an eventual outcome whatever that may be.