While I hope the MOU ‘sticks’, and converts, you should assign...

While I hope the MOU ‘sticks’, and converts, you should assign appropriate risk to your bedfellow.

You’ll remember a few years ago when Iron ore was sold on long term annual contracts, but the price dropped and China Inc. wasn’t happy paying what they believed were overs when compared to the spot price.

This MOU, and indeed offtake have little value to a bank, unless you’re talking to a Chinese bank, then it might.

It’s my belief TON’s value is Shandong and their 20% interest. If you want to know if there’s any value in this MOU, I’d suggest you look into him and his connection to the CCP. That is the nature of the industry in China. Business in China is still based on relationships, and that’s part of the reason so many new players struggle when trying to enter China. You need the right people with the right relationships.

Personally I think it’s a better than average chance, but the CCP and China are a funny place right now.